{"id":21398,"date":"2024-02-14T19:56:25","date_gmt":"2024-02-14T19:56:25","guid":{"rendered":"https:\/\/www.thinkadvisor.com\/2024\/02\/14\/lpls-steinmeier-why-we-bought-atria-and-whats-next\/"},"modified":"2024-02-14T19:56:25","modified_gmt":"2024-02-14T19:56:25","slug":"lpls-steinmeier-why-we-bought-atria-and-whats-next","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2024\/02\/14\/lpls-steinmeier-why-we-bought-atria-and-whats-next\/","title":{"rendered":"LPL&#8217;s Steinmeier: Why We Bought Atria and What&#8217;s Next"},"content":{"rendered":"<div class=\"media_block\"><a href=\"https:\/\/feeds.feedblitz.com\/-\/870002009\/0\/thinkadvisor\/\"><img decoding=\"async\" src=\"https:\/\/images.thinkadvisor.com\/contrib\/content\/uploads\/sites\/415\/2024\/01\/Rich-Steinmeier_LPL_640x640-1.jpg\" class=\"media_thumbnail\"><\/a><\/div>\n<div><img decoding=\"async\" src=\"https:\/\/images.thinkadvisor.com\/contrib\/content\/uploads\/sites\/415\/2024\/01\/Rich-Steinmeier_LPL_640x640-1.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<div class=\"the-advisor bullet-summary\">\n<h3>What You Need to Know<\/h3>\n<ul>\n<li>LPL had been courting Atria for some time and finally found its opening last year when talks about a sale began, the executive says. <\/li>\n<li>The Atria deal gives LPL the chance to expand in the enterprise market, as well as other channels, he says.<\/li>\n<li>LPL has improved its integration technology recently and plans to further develop it to support transitioning advisors. <\/li>\n<\/ul>\n<\/div>\n<p id=\"first-para\"><span>LPL Financial\u2019s announcement Tuesday that it <\/span><a href=\"https:\/\/www.thinkadvisor.com\/2024\/02\/13\/lpl-to-buy-atria-wealth-solutions\/\" target=\"_blank\" rel=\"noopener\"><span>is buying Atria Wealth Solutions<\/span><\/a><span>, which has about $100 billion of assets under management and around 2,400 advisors,&nbsp;marks&nbsp;its second-largest acquisition to date.&nbsp;The deal includes an&nbsp;initial payment of about $805 million and the potential for a second payment of up to $230 million, based on a retention rate of 80% to 100%.<\/span><\/p>\n<p><span>Buying Atria and preparing to integrate it <\/span><a href=\"https:\/\/investor.lpl.com\/static-files\/cc1a7795-ad12-4252-80f6-8bf8f0c07b34\"><span>in 2025<\/span><\/a><span>, along with <\/span><a href=\"https:\/\/www.thinkadvisor.com\/2023\/08\/24\/lpl-to-add-fidelity-to-lose-50b-in-prudential-wealth-assets\/\" target=\"_blank\" rel=\"noopener\"><span>bringing on 2,600 advisors<\/span><\/a><span> from Prudential Financial this year, will be a big lift. O<\/span>verall, though, the deal seems to make sense for Atria and its advisors, and the acquisition should help LPL solidify its competitive position at a time of intense consolidation and as BDs\u2019 profit margins are squeezed, according to executives and industry observers.<\/p>\n<p><span>San Diego-based LPL\u2019s head of business development, Rich Steinmeier, told ThinkAdvisor in an interview Tuesday that the independent broker-dealer\u2019s wish list of acquisition targets is focused on firms that value \u201cindependence and book ownership by the advisors,\u201d with similar business lines to LPL\u2019s.&nbsp;<\/span><span>\u201cAtria has been at the top of that list for a very long time,\u201d he said.&nbsp;<\/span><\/p>\n<p><span>LPL had been eager to stay in front of firms like Atria, according to Steinmeier, and \u201ckeep ourselves relevant\u2026 as they think about the evolution of their business,\u201d he said.&nbsp;\u201d<\/span><span>For firms that are like Atria, so well aligned, we will try to do that more frequently and just make sure that we can get into those conversations when appropriate.\u201d&nbsp;<\/span><\/p>\n<p><span>Last year, Steinmeier said,&nbsp;LPL finally caught a break. \u201cWe were able to get into conversations with&nbsp;[Atria&#8217;s leaders] that became fruitful,\u201d he said.<\/span><\/p>\n<h2>Momentum With Atria<\/h2>\n<p><span>Adding Atria could accelerate LPL\u2019s plans to make further inroads with a big growth market: outsourcing wealth management services for enterprise clients such as banks, credit unions and insurance companies. <\/span><\/p>\n<p><span>CEO Dan Arnold said on an <\/span><a href=\"https:\/\/investor.lpl.com\/static-files\/5233660a-68d3-49d3-b54a-b46ddaeb1a7d\" target=\"_blank\" rel=\"noopener\"><span>earnings call earlier in February<\/span><\/a><span> that he saw a <\/span><a href=\"https:\/\/www.thinkadvisor.com\/2024\/02\/02\/lpl-posts-strong-organic-growth-zeros-in-on-enterprise-market\/\" target=\"_blank\" rel=\"noopener\"><span>combined $2.5 trillion opportunity<\/span><\/a><span> in that marketplace, as those institutions seek to match the pace of tech and service evolution needed to win clients in today\u2019s crowded field.&nbsp;<\/span><\/p>\n<p><span>Arnold called the enterprise business \u201can interesting, durable growth opportunity\u201d for LPL.&nbsp;<\/span><\/p>\n<p><span>To that space Atria brings innovations and user-friendly tools, already tested on its existing client base of around 150 banks and credit unions, that other LPL advisors could benefit from in scaling their practices, the firm\u2019s executives say.&nbsp;<\/span><\/p>\n<p><span>\u201cThere\u2019s so much of what goes on inside of their homegrown CRM that we want to be able to ingest,\u201d Steinmeier said, adding that Atria\u2019s CRM \u201chelps their advisors manage their clients in ways that are really client-centric, and specific to wealth management.\u201d <\/span><\/p>\n<p><span>Atria also had an impressive notification system to help advisors understand things occurring within client accounts, and a \u201cperformance dashboard that is really outstanding,\u201d he added.&nbsp;<\/span><\/p>\n<p><span>Plus, \u201cthey\u2019ve done some novel things in the way that they partner deeply with their financial institutions and credit unions\u201d to share data between those institutions and advisors, said Steinmeier.&nbsp;<\/span><span>\u201cWe love the way they ingest data and represent it from TAMPs.\u201d<\/span><\/p>\n<p><span> Finally, Atria had \u201ctremendous talent in the home office team,\u201d which LPL stands to benefit from, he noted.&nbsp;<\/span><\/p>\n<p><span>Industry consultant Alois Pirker, the CEO and founder of Pirker Partners, said in a <\/span><a href=\"https:\/\/www.linkedin.com\/posts\/aloispirker_lpl-financial-to-acquire-atria-wealth-solutions-activity-7163180019723317248-fTYM\/?utm_source=share&amp;utm_medium=member_desktop\" target=\"_blank\" rel=\"noopener\"><span>LinkedIn post on the news Tuesday<\/span><\/a><span> that he expected Atria\u2019s Unio advisor platform to be of particular interest to LPL in the deal. Atria could help LPL \u201cgain additional scale across a number of their business lines,\u201d he wrote.&nbsp;&nbsp;<\/span><\/p>\n<p><span>Atria declined to comment for this story. However, its CEO and founding partner Doug Ketterer said in a <\/span><a href=\"https:\/\/investor.lpl.com\/static-files\/3c8fe32e-02d1-438a-80e3-6e2d8aaa11cb#:~:text=There%20is%20no%20question%20that,dealers%20to%20the%20LPL%20platform.\" target=\"_blank\" rel=\"noopener\"><span>press release<\/span><\/a><span>&nbsp;Tuesday that he believed \u201cLPL represents the best opportunity for a financial professional, bank or credit union to grow their practice or investment program.\u201d&nbsp;<\/span><\/p>\n<p><span>The firm\u2019s wealth management subsidiaries include broker-dealers CUSO Financial Services and Sorrento Pacific Financial, which service banks and credit unions, and independent advisor-supporting firms Cadaret Grant, NEXT Financial Group, Western International Securities, SCF Securities and Grove Point Financial. <\/span><\/p>\n<p><span>Atria\u2019s sale is expected to grow LPL\u2019s enterprise channel 11% and its advisor channel 6%, according to an <\/span><a href=\"https:\/\/investor.lpl.com\/static-files\/cc1a7795-ad12-4252-80f6-8bf8f0c07b34\" target=\"_blank\" rel=\"noopener\"><span>investor slideshow<\/span><\/a><span>.&nbsp;<\/span><\/p>\n<h2>Consolidation Games<\/h2>\n<p><span>Recruiter Louis Diamond, the president of Diamond Consultants, said in an interview that Atria\u2019s sale shows how difficult it\u2019s become to operate a broker-dealer business in an environment where RIAs and many other competitors have gained ground.&nbsp;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What You Need to Know LPL had been courting Atria for some time and finally found its opening last year when talks about a sale began, the executive says. The Atria deal gives LPL&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":21399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[1],"jetpack_featured_media_url":"https:\/\/blog.lifeinsurance-orleans.ca\/wp-content\/uploads\/2024\/02\/lpls-steinmeier-why-we-bought-atria-and-whats-next.jpg","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/21398"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=21398"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/21398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media\/21399"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=21398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=21398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=21398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}