National Planning super OSJ turns down swarming poachers, joins LPL
Ever since LPL Financial acquired the assets of National Planning Holdings, the firm’s rivals have been swooping in with attractive offers, poaching at least 270 advisors from NPH firms.
But now, LPL has begun to reveal its haul. A National Planning practice with $1.1 billion in brokerage and advisory assets chose LPL Financial over competing offers.
Doug Ritter’s Discovery Financial Centers made the switch to LPL last week, according to the No. 1 independent broker-dealer. The firm, based in Red Wing, Minnesota, includes 19 advisors in eight offices around Minneapolis and southeastern Minnesota. At least two other National Planning offices of supervisory jurisdiction have also said they would join LPL.
By the end of the month, LPL will unveil a few more billion-dollar firms and a full list of the first group of advisors joining from National Planning Holdings, a spokeswoman says. The firm purchased the assets of NPH’s four BDs in August, and LPL transferred assets from two of them onto its platform last week.
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CEO Dan Arnold has estimated that LPL will retain roughly 70% of production from National Planning and Investment Centers of America in the first wave of the transition. LPL’s rivals have peeled off at least 278 advisors with $11.7 billion in client assets from the four NPH BDs since the deal.
Discovery Financial received “all sorts of attention” from other IBDs before opting for LPL’s technology, self-clearing capability and flexible advisory platform, says Ritter, 62.
“Financial stability was really important to us and commitment to the long term,” he says. “LPL’s only business is serving financial advisors. That’s a unique difference in the independent broker-dealer space.”
Ritter and Bill Hardyman launched Discovery Financial in 1992, and Ritter, Tim Kelly and Hardyman’s son Matt now serve as the firm’s partners. Ritter’s son David also works for Discovery, which has two other father-son tandems in its super OSJ group.
Discovery spent 19 years with ING Financial Partners prior to joining National Planning five years ago, according to FINRA BrokerCheck. The practice aligned formally with LPL last week.
LPL executives knew going into the NPH acquisition that they would face recruiting competition from rivals and that some of the four BDs’ 3,200 advisors “wouldn’t match up with us strategically,” Arnold said last month at the firm’s investor day event.
“That said, we thought we had a very compelling offer of economics and a way to transition the platform and capabilities such that we thought it would be an attractive alternative for many of the advisors,” he said.
Jeff Motske’s Trilogy Financial, a super OSJ with more than 150 advisors and $2 billion in client assets, took LPL over a dozen suitors, Motske said in October. At the investor day, John Brooks explained the transition process at his firm, Resource One Advisors, an OSJ with about $600 million in client assets.
Brooks received more phone calls over the previous two months than he had in his entire 40-year career, but LPL’s business and scale proved more appealing than those of its rivals, he said.
“I believe LPL is positioned to not just be in the industry, but to create the future of the industry. I think we’re going to do things that Amazon has done, that Apple has done,” said Brooks. “I want to be with the 800-pound gorilla, and, today, I’m proud to be part of that family.”