LPL Financial (LPLA) Takes Stake in Independent Advisor Alliance
LPL Financial Holdings Inc. LPLA has taken a minority stake in Independent Advisor Alliance (“IAA”), which is a hybrid registered investment advisory (“RIA”) firm focused on empowering financial advisors to succeed as independent business owners. The deal is amongst the very few transactions wherein LPLA has taken a minority stake in a hybrid RIA and office of supervisory jurisdiction (“OSJ”).
LPLA has purchased a 20% stake in IAA, which has $16.8 billion in client assets under supervision and 226 financial advisors.
IAA will continue to maintain complete control and ownership of its management and operations, ensuring continuity and stability for its employees, and its existing partners and advisors.
LPLA’s investment in IAA is expected to support IAA as it continues to advance its services and tools, creating an even more supportive ecosystem for its network of financial advisors.
IAA considered various options before selecting LPLA. For IAA, the key criterion was an investor who shares a mutual and long-standing commitment to fostering innovation and enhancing services for financial advisors.
Robert Russo, the CEO and founder of IAA, stated, “Ultimately, it came down to what was in the best interest of our advisors. It’s a win-win for advisors when their RIA and broker-dealer are aligned. Our partner firms know we’re in it for the long haul. They have clarity and security in their future, combined with the best support and services in the industry.”
Russo added, “We've been in this process for probably close to two years. We had a lot of different options, and, at the end of the day, LPL just made the most sense for our advisors and our firm. LPL’s goal is to retain advisors. Doing it with LPL versus maybe an outside party made them understand that there was no ulterior motive to the deal.”
Jeremy Holly, the executive vice president of business strategy & growth at LPLA, informed, “Since its inception, IAA has been dedicated to providing robust support and innovative programs that empower financial advisors to be successful independent business owners. Like LPL, IAA’s focus is on advisors and helping them to grow their businesses. We are proud to partner with IAA as they build upon their success.”
Notably, OSJs, which are third-party companies, provide streamlined services to advisors through their staff, and from brokerages and other vendors. So far, LPLA has acquired minority positions in hybrid RIA-OSJs only thrice.
LPLA’s investment in IAA aligns with the firm’s ongoing approach in trying to work with as many advisors as possible under any circumstance.
Over the past six months, shares of LPLA have rallied 4.3% compared with the industry’s 12.7% growth.
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Currently, LPL Financial carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expansion Efforts by Finance Firms
Equity Bancshares, Inc. EQBK, the holding company for Equity Bank, signed a definitive merger agreement to acquire Rockhold Bancorp, the parent company of the Bank of Kirksville, in an all-cash merger transaction.
The closing of the deal, subject to regulatory approvals and the satisfaction of customary closing conditions, is expected in first-quarter 2024. Notably, Rockhold's sole shareholder has already approved the transaction.
Per the terms of the deal, the actual transaction value of $44.3 million may be subject to adjustment, based on the adjusted equity capital of Rockhold as of the deal closure.
EQBK expects the transaction to be 36 cents or 12% accretive to earnings per share (EPS) in 2024, and 45 cents or 14.3% accretive to EPS in 2025.
The deal will add eight locations of Bank of Kirksville. With this, Equity Bank will have a network of 74 bank locations, with 23 offices in Missouri and $5.4 billion in total assets.
LCNB Corp. LCNB, the holding company for LCNB National Bank, signed a definitive agreement to acquire Eagle Financial Bancorp, Inc. in a stock-and-cash transaction. The closing of the deal, subject to the approval of Eagle Financial shareholders and regulators, and other customary conditions, is expected in the second quarter of 2024. The approval of LCNB shareholders is not required.
Eagle Financial, the holding company for EAGLE.bank, is a full-service banking institution with three offices in Cincinnati, OH. As of Sep 30, 2023, it had $175.8 million in assets, $140.8 million in loans, $135 million in deposits and $26.3 million in consolidated stockholders’ equity.
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