Eh, close enough, right?

LPL Financial purchased Commonwealth Financial Network last year, with a retention rate goal of 90%, a target that has been expressed both in terms of headcount and assets during earnings calls. As far as sheer advisor numbers go, roughly a quarter of the Commonwealth advisors have chosen to go in a different direction, with retention currently standing at 78%, according to a report from AdvizorPro and Muriel Consulting. The number could be even lower when all is said and done, as some of those advisors currently in the LPL system don’t actually plan on sticking around.

“You’re still going to see a large number of moves from now until Q3,” said Frank LaRosa, Elite Consulting Partners CEO.

Should I Stay or Should I Go?

LPL is the largest independent broker-dealer, supporting a network of over 32,000 advisors with more than $2 trillion in assets. They’ve even got Anna Kendrick doing more ads for them. But even for a firm with as much pull as LPL, retaining 90% of advisors from its $2.7 billion, all-cash purchase of Commonwealth seemed like a lofty goal. “[Commonwealth advisors] signed the deal, took the money, but nothing has been done yet,” LaRosa told Advisor Upside. “They haven’t transferred client assets from Fidelity to LPL.” He said any who leave the firm will likely have to return any retention bonuses they’ve received plus interest, but that, “most advisors don’t care, though, because it’s minimal compared to being at the right or wrong firm.”

Onboarding of the Commonwealth advisors is expected to be completed by the fourth quarter, so there’s still time for advisors to go elsewhere. “It’s become pretty clear by now that the 90% was pretty aggressive,” said Jason Diamond, president of Diamond Consultants. However, he added that 78% sounds low, and he believes that the percentage will increase this year. LPL declined to comment.

The AdvizorPro-Muriel report tracked departures between April 1 and Dec. 31 of last year. Out of 2,900 Commonwealth advisors, about 650 left:

• Roughly two-thirds of those joined other broker-dealers, with Raymond James emerging as a standout destination. One out of every three advisors who changed firms chose Raymond James, attracted by early engagement, competitive transition packages and a familiar culture.
• The rest, roughly one third, took a different path, moving into the independent RIA space.

“Those are people who have outgrown the model,” Diamond said. “They’re thinking, ‘My broker-dealer was just bought. Do I really want to hop in bed with another?’ The RIA space is the natural evolution. It’s more freedom, more control, more autonomy.”

Where’d You Go? I Miss You So. Ultimately, it might not even matter if LPL’s retention rate falls below its initial goal. “It’s still going to be a very successful transaction,” LaRosa said. “Even if it falls another 10%, that’s still 2,000 stellar financial advisors. What’s wrong with that? Congratulations.”

The RIA industry is starting to look like a Presidents’ Day car lot: deals, deals, deals.

Last year marked a record period for M&A activity, with 322 transactions announced, an 18% increase year over year, according to DeVoe. While the surge reflects sustained interest in the space, it also underscores persistent challenges RIAs face, particularly around succession planning and organic growth. “When sellers were asked about the primary drivers behind their decision to sell, the top two responses were growth and liquidity,” company founder David DeVoe said.

What’s the Plan?

A looming wave of retirements is a major contributor, especially among owners who lack a clear transition strategy. “Succession remains one of the industry’s most significant unresolved risks,” DeVoe told Advisor Upside. Nearly two-thirds of firms report their next-generation talent is not yet ready to take over leadership, and roughly half of recent transactions involve founders moving toward retirement.

Growth pressures are driving a similar share of deals. Many RIAs hit a wall between $500 million and $3 billion in assets under management, said Joe Duran, managing partner of Rise Growth Partners. At that stage, firms face a choice: invest internally and absorb short-term margin pressure, or partner with an organization that already has the infrastructure in place. “Founders need to be brutally honest about what they’re trying to achieve,” Duran said in an email, adding that deals driven by fatigue, rather than strategy, often lead to regret.

The report also found:

• Wealth Enhancement, Merit Financial Advisors and Beacon Pointe were the top acquirers last year, conducting 17, 13 and 12 transactions, respectively.
• The number of sellers increased, but the buyer pool narrowed, dropping 19% from the previous year. Also, only 8% of acquirers last year were first-time buyers, down from 14% the previous year.
• Consolidators, serial acquirers with M&A as their core strategy, accounted for 51% of all RIA acquisitions, up from 45% in 2024.

Private Affair. Many of these buyers are backed by private equity, though plenty of RIAs have avoided the aggressive gut-and-flip strategies PE firms often deploy in industries like retail, media and healthcare. “In addition to the client value of the business model, RIAs provide consistent and growing revenue streams, resilient cash flow and long-duration client relationships,” DeVoe said.

Looking ahead, deals aren’t expected to slow, further underscoring the difficulties RIAs have with succession planning and growth. “Assuming general conditions remain consistent, we see M&A activity continuing to accelerate into 2026 and for several years to come,” he said.

Are advisors really ready for AI?

No longer an emerging trend in wealth management, artificial intelligence has quickly become embedded in the industry’s infrastructure. More than nine in 10 advisors now use some form of AI-enabled assistant, with 85% saying generative AI is already helping their practice, according to the latest Advisor 360 Survey. That acceleration is reshaping more than just workflows. It is redefining the fiduciary duty itself.

There’s a growing expectation for advisors to understand thoroughly the AI tools influencing their advice, an evolution driven as much by client expectations as by technology. Investors are increasingly demanding hyper-personalization — financial guidance attuned not only to life stage and risk tolerance, but also to tax nuances, liquidity needs, cash-flow patterns and personal preferences. A CFP Board study found that as early as 2023, more than half of investors were already comfortable using AI-driven financial insights, provided that a human advisor verifies them, and that number has presumably increased. This is the new reality, and AI is the foundation for delivering a higher level of personalization at scale.

Despite AI’s seemingly endless capabilities, however, advisors must understand its limitations. In the same vein, advisors must understand and responsibly guide the engine behind the personalization.

Read more.