LPL Financial (LPLA) is acquiring Commonwealth Financial Network, a privately owned wealth management firm with nearly 3,000 financial advisors, for $2.70 billion U.S. in cash.
Based in San Diego, California, LPL Financial is the largest independent broker-dealer in America with $1.5 trillion U.S. of assets under management.
The purchase of Commonwealth Financial Network, which is expected to close by year’s end, is one of LPL’s largest ever deals and will push LPL’s advisor head count past 30,000.
Commonwealth Financial has $285 billion U.S. of brokerage and advisory assets under management.
LPL Chief Executive Officer (CEO) Rich Steinmeier said his firm was attracted to Commonwealth Financial Network because of its corporate culture and advisor talent.
LPL said it would acquire 100% of the equity of the holding company of Commonwealth, which will retain its brand name after the acquisition is finalized.
For Steinmeier, who assumed the CEO role six months ago, the deal is a chance to make his mark on LPL and set a course for the company moving forward.
Commonwealth Financial Network is seen as a high-quality firm in the independent brokerage space, and as the largest privately held independent firm remaining.
Boston-based Commonwealth was founded in 1979. Founder Joseph Deitch will assume an advisory role to LPL’s board of directors after the acquisition is completed.
Commonwealth’s current CEO Wayne Bloom will join LPL’s management committee and report to Steinmeier.
LPL Financial is also currently one of America’s biggest wealth management companies and has grown steadily over the years through acquisitions.
The stock of LPL Financial has risen 27% over the past 12 months to trade at $336.89 U.S. per share.
