Why LPL Bought Mariner Advisors Biz It Already Works With

Let’s make it official.

LPL Financial agreed this week to acquire the Mariner Advisor Network, a unit of Mariner that supports 367 financial advisors managing roughly $31 billion in assets. The deal also includes Private Advisor Group, a hybrid RIA in which LPL holds a minority stake, as a buyer. But why would LPL buy a business where the advisors are already affiliated with it? While LPL had long supported the network through its platform, bringing it closer allows the firm to capture more of those assets, while giving Mariner an exit from a business line that’s no longer core to its RIA strategy. Two industry consultants viewed the deal as a win for the firms involved, while also reflecting a broader shift toward giving advisors more flexibility in structuring their businesses.

“When you’re running a big RIA [like Mariner], and you take on this hybrid stuff, it just doesn’t fit and it drags on valuation,” said Bill Willis, founder of Willis Consulting. “The pure RIA gets the highest multiple, so maybe this is a little bit of cleanup duty to get back to its pure self.” He added that for LPL, the deal is both strategic and profitable, as the firm now controls more of the custody and clearing economics.

Kind of a Big Deal

While not as glitzy as LPL’s acquisition of Commonwealth last year, this latest transaction is still a deal between two of wealth management’s biggest players. “It speaks to LPL’s appetite for growth and scaling up its business,” said Marcus Samaan, chief growth officer at recruiting firm Terrana Group. “We’ve seen private equity drive up the stakes and the cost of acquiring books of business, so this race to accumulate assets and keep them closely held is becoming increasingly competitive.”

Details of the deal include:

• Some 223 advisors will continue operating on their existing LPL platform with uninterrupted service for their clients and businesses, while gaining access to an expanding suite of wealth management and business-support solutions.
• Meanwhile, 144 hybrid advisors will transition to Private Advisor Group’s hybrid RIA model, where they will maintain their multicustody relationships and continue operating on the same LPL platform.

“This is an ideal outcome for these advisors, enabling them to broaden their relationship with LPL while maintaining stability and continuity for the clients they serve,” Marty Bicknell, Mariner CEO, said in a statement.

Go Your Own Way. The broader wealth management landscape is shifting quickly. Competition for advisors is intensifying, the RIA model continues to gain ground and large firms like LPL are leaning on scale and technology to consolidate their position. That dynamic is giving advisors more flexibility than ever, Samaan told Advisor Upside. “I can’t imagine a better time to be an advisor,” he said. “The ability to design your own practice and create the business model that best suits you and your clients is now more available than ever.”