LPL Buys National Planning Holdings in $325 Million-Plus Deal

LPL Financial, the largest independent broker-dealer with 14,300 affiliated brokers, on Tuesday announced its acquisition of the assets of smaller independent broker-dealer network National Planning Holdings in a $325 million cash deal. 

The total price could reach $448 million if NPH hits certain broker and client-retention targets during a transition period expected to terminate at the end of the first quarter of 2018, according to LPL. If fewer than 72% of NPH’s revenue is retained, no additional payment will be made to NPH’s owners.  

El Segundo, Calif.-based NPH is an affiliate of  Jackson National Insurance Co., and both firms are  indirect, wholly owned subsidiaries of Prudential plc. The broker-dealer reported annual revenue of $909 million in 2016 from its four broker-dealers and its approximately 3,200 brokers, many of whom are based in bank branches. The broker-dealers—INVEST Financial Corporation, Investment Centers of America, National Planning Corporation and SII Investments—oversee about $120 billion of client assets under management, according to LPL’s announcement. 

Brokers will be onboarded in two waves between now and the first quarter of 2018, LPL said. Although NPH has cleared through Pershing and Fidelity, its brokers will transition client accounts to be cleared through LPL.

“Given the similarities in LPL’s independent model to the NPH model, we believe LPL is the ideal acquirer to ensure continuity of the quality service and support for our clients and their financial advisors,” NPH’s president and chief executive Scott Romine said in a prepared statement.