LPL Financial, a wholly owned subsidiary of LPL Financial Holdings, has acquired the independent broker-dealer network of National Planning Holdings for $325 million.
The company will also make a contingent payment between $0 and $123 million in the first half of 2018, which will be based on the level of NPH's business that onboards onto LPL's platform.
“The demand for financial advice continues to grow, and the independent model is the fastest growing part of the industry,” said Dan Arnold, LPL Financial president and CEO. “We are committed to being a leader in our core markets, so we are excited to announce our purchase of NPH which brings us together with one of the largest U.S. independent broker/dealer networks. This transaction adds to our scale, which we can leverage to provide LPL and NPH advisors with the capabilities they need, and the service they expect, at a compelling price.”
The transaction was signed and closed on August 15, 2017 following receipt of regulatory approval. Under the transaction structure, LPL will onboard NPH advisors and client assets onto its platform rather than integrating NPH's operations, although NPH will maintain its operations during the onboarding period. LPL plans to onboard NPH advisors in two waves that it anticipates completing by the end of the first quarter of 2018.
After the onboarding waves are complete, the company will make a contingent payment between $0 and $123 million. The contingent payment will be based on the portion of NPH's business that is onboarded to LPL's platform. No contingent payment would be due if less than 72 percent of NPH production is onboarded, and the amount of the contingent payment increases on an interpolated basis for onboarded production in the range of 72 percent to 93.5 percent.