LPL Financial Secures $6B Firm with Hybrid Model

LPL Financial has made a significant move in the financial services industry by securing a $6 billion firm, Bartholomew & Company, to its hybrid model. This development comes as LPL Financial aims to retain client assets and advisors from its acquisition of Commonwealth Financial Network. The firm, based in Worcester, Massachusetts, has announced that it is now listed with the Securities and Exchange Commission as a registered investment advisor, while maintaining its brokerage affiliation with Commonwealth.

Background and Motivations

The decision by Bartholomew & Company to adopt a hybrid model is a strategic move, driven by the firm’s desire to expand its services and maintain its relationship with Commonwealth. the decision to start an RIA had been considered for a long time, but the acquisition of Commonwealth by LPL Financial provided the catalyst for this move. The firm’s leadership recognized the benefits of maintaining their relationship with Commonwealth, while also seeking to capitalize on the opportunities presented by the hybrid model.

Bartholomew & Company boasts an impressive asset tally, with approximately $6 billion in assets under management. Of this total, around $3.5 billion comes from institutional clients, primarily city and town governments in Massachusetts and nearby states. The remainder is attributed to individual clients. The firm’s team consists of around 40 people, roughly half of whom are advisors. Client assets will be held on LPL’s Strategic Wealth Management platform, which allows advisors to custom-build investment portfolios for clients.

LPL Financial’s Acquisition of Commonwealth

The acquisition of Commonwealth Financial Network by LPL Financial has been a significant development in the financial services industry. The deal, valued at $2.7 billion, has raised questions about LPL’s ability to retain Commonwealth’s assets and advisors. LPL executives have expressed confidence in their ability to retain at least 90% of the $305 billion in client assets that Commonwealth had at the time of the purchase. However, hundreds of advisors have left Commonwealth since the acquisition was announced, with many joining rival firms or starting their own RIAs.

Despite these challenges, LPL Financial has secured a significant prize with the retention of Bartholomew & Company. The firm’s decision to maintain its relationship with Commonwealth, while adopting a hybrid model, is seen as a vote of confidence in LPL’s ability to support its advisors and clients. The move is also expected to help LPL Financial achieve its goal of retaining a significant portion of Commonwealth’s assets and advisors.

Hybrid Model and Its Benefits

The hybrid model adopted by Bartholomew & Company allows the firm to maintain its brokerage affiliation with Commonwealth, while also operating as a registered investment advisor. This model provides the firm with greater flexibility and autonomy, enabling it to offer a wider range of services to its clients. The hybrid model also allows the firm to capitalize on the benefits of both the brokerage and RIA models, including the ability to offer proprietary products and services, as well as the flexibility to work with multiple custodians.

The decision by Bartholomew & Company to adopt a hybrid model is also seen as a strategic move, driven by the firm’s desire to expand its services and maintain its relationship with Commonwealth. The firm’s leadership believes that the hybrid model will provide them with the necessary flexibility and autonomy to grow their business, while also maintaining their relationship with Commonwealth.

What Does This Mean for the Industry?

The retention of Bartholomew & Company by LPL Financial is seen as a significant development in the financial services industry. The move is expected to have implications for the industry as a whole, particularly in terms of the trend towards hybrid models and the role of broker-dealers in supporting advisors and clients. The development also highlights the importance of relationships and trust in the financial services industry, as well as the need for firms to adapt to changing circumstances and capitalize on new opportunities.

As the financial services industry continues to evolve, it is likely that we will see more firms adopting hybrid models, as well as greater emphasis on the importance of relationships and trust. The retention of Bartholomew & Company by LPL Financial is a significant development in this context, and one that is likely to have far-reaching implications for the industry as a whole.

What Should You Do About Hybrid Models?

For financial advisors and firms considering a hybrid model, the retention of Bartholomew & Company by LPL Financial provides a significant case study. The move highlights the benefits of hybrid models, including greater flexibility and autonomy, as well as the importance of relationships and trust in the financial services industry. However, it also underscores the need for careful consideration and planning, as well as a deep understanding of the complexities and challenges involved.

Ultimately, the decision to adopt a hybrid model will depend on the specific needs and goals of each firm. However, for those firms that are considering this option, the retention of Bartholomew & Company by LPL Financial provides a significant example of the potential benefits and challenges involved. By carefully evaluating their options and seeking the right support and guidance, firms can capitalize on the opportunities presented by hybrid models and achieve their goals in the financial services industry.

Financial Services Industry – Disclaimer

This article does not constitute financial advice and is for informational purposes only. The information contained herein is not intended to be a comprehensive or exhaustive treatment of the subject matter, and is not a substitute for professional advice. Readers should consult a qualified financial advisor before making any investment decisions.