By Andrew Welsch

LPL Financial said it would acquire Commonwealth Financial Network, a privately owned wealth management company with approximately 2,900 financial advisors, for approximately $2.7 billion in cash.

The deal, which is expected to close in the second half of this year, is one of LPL's largest acquisitions and will push LPL's advisor head count above 30,000. Commonwealth has $285 billion of brokerage and advisory assets. LPL has approximately $1.7 trillion.

LPL CEO Rich Steinmeier said his firm was attracted to Commonwealth because of its corporate culture and advisor talent. "Commonwealth is respected throughout our industry as a standard-bearer for service excellence, and their commitment to the success of their advisors is embedded in all aspects of their business," he said.

LPL said it would acquire 100% of the equity of the holding company of Commonwealth, which will retain its brand name.

For Steinmeier, who only took over the CEO job just six months ago, the deal is a chance to make his mark on LPL and set a defined course for the San Diego-based company. In an interview with Barron's earlier in March , Steinmeier expressed his desire to see LPL expand its reach and become a premier brand in wealth management.

News reports late last week suggested a deal was in the works. In a research note issued over the weekend before the deal was announced, Citizens analyst Devin Ryan wrote that a Commonwealth acquisition would represent a "big win" for LPL, noting that Commonwealth is known for a high level of service and advisor satisfaction.

Commonwealth is viewed as a particularly high-quality firm in the independent RIA & brokerage space, and as the largest privately held independent firm remaining, we also see a scarcity aspect to the asset as well," Ryan wrote.

Ryan, who rates LPL stock Outperform, adds that LPL has a good track record of retaining advisors following an acquisition.

Waltham, Mass.-based Commonwealth was founded in 1979. Founder Joseph Deitch will assume an advisory role to LPL's board of directors through the migration of Commonwealth advisors to LPL's platform, which LPL expects to complete in mid-2026. He said that LPL's resources and similar culture will benefit Commonwealth advisors.

"We've been diligent in finding a partner that shares our mission of prioritizing advisor needs above all else," Deitch said. "LPL became the logical choice for our next chapter."

Commonwealth CEO Wayne Bloom will join LPL's management committee and report to Steinmeier, according to LPL. Bloom will also continue to lead the Commonwealth community and launch a new office of advisory advocacy to be charged with elevating the service experience for LPL's network of advisors.

"This impressive partnership accelerates our joint competitive advantage, " said Bloom. "Commonwealth will retain its brand as part of LPL, and Commonwealth advisors will continue to benefit from their relationships with our team members, all while taking full advantage of LPL's scale and platform that fuels its industry-leading offerings."

Morgan Stanley served as the deal's advisor to LPL and law firm Allen Overy Shearman Sterling served as legal counsel. Goldman Sachs served as advisor to Commonwealth and law firm Ropes & Gray served as legal counsel.

LPL has become one of the nation's largest wealth management companies through aggressive recruiting and acquisitions, which have ballooned the company's advisor head count and assets. Last year, it acquired Atria Wealth Solutions which had approximately 2,400 advisors and 150 banks and credit unions, managing approximately $100 billion of brokerage and advisory assets.

Write to Andrew Welsch at andrew.welsch@barrons.com

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March 31, 2025 06:10 ET (10:10 GMT)

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