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LPL Offers Lucrative Deal to Reps at Securities America, Kestra and Cetera

April 11, 2018

After losing many advisors previously affiliated with the National Planning Holdings network, LPL Financial — which bought NPH’s assets last summer — is trying to lure representatives from rivals with a sweetened sign-on deal.

LPL is offering 50 basis points on assets to advisors joining its RIA from Cetera Financial, Securities America and Kestra Financial, and 40 basis points if they come to LPL’s hybrid offices of supervisory jurisdiction, according to WealthManagement.com.

Both deals are offered as forgivable loans, the web publication writes. In addition, representatives from the three firms joining LPL’s RIA will receive a 93% payout during their first five years with the firm, although LPL doesn’t include proprietary assets as part of that calculation, WealthManagement.com writes.

The company announced the promotion last week, sources tell the web publication, but an LPL spokesperson didn’t respond to WealthManagement.com’s requests for comment.

Typically, brokerages pay advisors a cut on gross dealer concessions and not on assets when offering recruitment bonuses, according to the web publication. So LPL’s offer in the broker-dealer space is “a slippery slope because [LPL] could be paying sign-onmoney on assets that aren’t generating anything,” Jonathan Henschen, president of the recruiting firm Henschen & Associates, tells WealthManagement.com.

Henschen also tells the web publication he understands why LPL would offer the deal to Securities America — the company was one of the main recipients of advisors who broke away from NPH in the wake of LPL’s acquisition of its assets, according to WealthManagement.com.

But Henschen doesn’t expect the same deal extended to Cambridge Investment Research and Woodbury Financial, the two firms with the next largest number of advisors recruited from NPH after the LPL deal, the web publication writes.

LPL said in February that it has completed the acquisition of NPH’s assets, which it had bought in August for $325 million from Jackson National Life. But LPL didn’t specify whether it had reached its target of onboarding 70% of NPH’ revenue.

Many firms opted not to join LPL after the NPH acquisition, instead affiliating with firms such as Securities America, Woodbury Financial Services, Commonwealth Financial Network andFSC Securities.

By Alex Padalka
  • To read the Wealth Management article cited in this story, click here.