Washington Wealth Management has bolted LPL Financial after about a year and a half to join large independent broker-dealer NFP in what it says is a bid to attract more wirehouse breakaways.
Terms of the deal were not disclosed, but Washington Wealth CEO Robert Bartenstein said NFP's deep pockets would help the smaller firm buy more advisors out of their expensive wirehouse contracts, at prices starting at about $200,000. To get those folks unlocked requires capital, Bartenstein says. We need a reliable and aggressive capital partner.
Another key factor, says Bartenstein, was NFPs Envestnet-based integrated platform, which is designed to help wirehouse advisors work as independents in a fully supported, single-logon environment.
Megafirm LPL is a perennial No. 1 in Financial Planning's annual FP50 ranking of independent B-Ds; NFP ranked No. 11 in the most recent ranking last year.
AIMED AT BREAKAWAYS
Washington Wealths founders launched the firm in 2010 to lure away $1 million-producing advisors who, it said, were being neglected by the wirehouses that employed them. The firm built its value proposition on the idea that it understood the unique challenges wirehouse advisors face when making the sometimes-rocky transition to entrepreneurship.
Before the San Diego firm -- which now supports 10 independent financial advisor teams around the country -- was a year old, Bartenstein had projected it was on track to grow to $3 billion in assets under management by the end of last year. By last summer, however, the firms AUM had leveled off at nearly $800 million.
We appreciate now much better than we started what it takes to reach the level of an NFP, Bartenstein says. The fact that NFP was looking for an organization like this was a pleasant surprise to us. ... As we got to know each other's organizations better, we realized there was a tremendous amount of synergy that we could unlock.
MORE DEALS AHEAD?
Once the two firms began talking in August, Bartenstein says, Washington Wealth stopped recruiting new advisors as it designed an enhanced offering with the larger firm. Now, he says, The pipeline is a bit backlogged. We will be announcing four new teams [joining the company] in the next few weeks and then there are a handful more behind that that are fairly near term.
Our mission is really simple, Bartenstein adds: "We want to get people freed. We want people to build a business while creating a legacy for themselves and their families while growing their business and serving their clients.
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