LPL Financial Closes Lucia Securities Asset Acquisition

Rhea-AI Summary

LPL Financial has successfully closed its acquisition of Lucia Securities, a broker-dealer and registered investment advisor based in San Diego, as of August 18, 2020. Lucia Securities manages over $1.5 billion in client assets, expected to be integrated into LPL's platform by the end of 2020. All 20 advisors from Lucia have committed to join LPL as Lucia Capital Group. The transaction anticipates a multiple of approximately 6x post-synergy EBITDA, enhancing LPL’s market position and operational capabilities.

Positive

• Acquisition of Lucia Securities adds over $1.5 billion in client assets to LPL's platform.
• All 20 advisors from Lucia Securities are committed to join LPL as Lucia Capital Group, ensuring continuity and potential for growth.
• Expected transaction multiple of ~6x post-synergy EBITDA indicates strong financial synergy.

Negative

• Risks associated with onboarding Lucia Securities' clients to LPL's platform could affect anticipated revenue.
• Potential client retention issues if advisors do not successfully transition existing clients.

Lucia Securities serves more than $1.5 billion of client assets  
100 percent of the advisors with Lucia Securities have committed to join LPL  
Anticipated transaction multiple continues to be ~6x post-synergy EBITDA

SAN DIEGO, Aug. 20, 2020 (GLOBE NEWSWIRE) -- LPL Financial Holdings Inc. (Nasdaq: LPLA) (collectively with its subsidiaries, “LPL”), today announced that it has closed its acquisition of assets of Lucia Securities, a broker-dealer and registered investment advisor (RIA) based in San Diego. Lucia Securities serves more than $1.5 billion of client assets, which are expected to onboard to LPL's platform by the end of 2020. All 20 advisors have committed to join LPL and will be doing business with LPL as Lucia Capital Group.

“LPL is proud to welcome the Lucia Capital Group team of advisors to our platform,” said Rich Steinmeier, LPL Financial managing director and divisional president, Business Development. “As their partner, we are committed to their success. By investing on an ongoing basis in technology and digital capabilities, we strive to help them differentiate their practices in their markets, operate efficient and productive practices, and build businesses with value. We look forward to a long-term partnership with Lucia Capital Group.”

“Lucia Capital Group is excited to take this next step in the evolution of our business with LPL. In a short period of time, we have planted the seeds of a fruitful and long-lasting partnership,” said Ray Lucia Jr., CEO, Lucia Capital Group.

The transaction was structured as an asset purchase, and closed on August 18, 2020. LPL continues to anticipate a transaction multiple of ~6x post-synergy EBITDA.

About LPL Financial

LPL Financial is a leader in the retail financial advice market and the nation’s largest independent broker-dealer*. We serve independent financial advisors, professionals, and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.

*Based on total revenues, Financial Planning magazine June 1996-2020

Forward-Looking Statements

Statements in this press release regarding LPL’s and Lucia Securities’ future operating results, growth and plans, including the amount and timing of client asset onboarding, advisor headcount and post-synergy EBITDA, as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the historical performance of LPL and Lucia Securities and LPL’s plans, estimates and expectations as of August 20, 2020. Forward-looking statements are not guarantees that the timing of client asset onboarding, results, plans, intentions or expectations expressed or implied by LPL will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause levels of assets onboarded, actual financial or operating results, levels of activity or the timing of events to be materially different than those expressed or implied by forward-looking statements. In particular, LPL can provide no assurance that the client assets reported as serviced by Lucia Securities’ financial advisors will translate into assets serviced at LPL, or that Lucia Securities’ advisors will join LPL. Important factors that could cause or contribute to such differences include: difficulties and delays in onboarding the clients of Lucia Securities’ advisors, which could negatively affect LPL’s ability to realize revenue or expense synergies or other expected benefits of the transaction; the choice by clients of Lucia Securities’ advisors not to open brokerage and/or advisory accounts at LPL; changes in general economic and financial market conditions, including retail investor sentiment; fluctuations in the value of assets under custody; effects of competition in the financial services industry, including competitors’ success in recruiting Lucia Securities’ advisors and their clients; and the other factors set forth in Part I, “Item 1A. Risk Factors” in LPL’s 2019 Annual Report on Form 10-K and any subsequent SEC filing. Except as required by law, LPL specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if its estimates change, and you should not rely on those statements as representing LPL’s views as of any date subsequent to August 20, 2020. Estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Investor Relations – Chris Koegel, (617) 897-4574

Media Relations – Jeff Mochal, (704) 733-3589

investor.lpl.com/contact-us

 

FAQ

What are the details of the LPL Financial acquisition of Lucia Securities?

LPL Financial acquired Lucia Securities, closing the deal on August 18, 2020. Lucia Securities manages over $1.5 billion in client assets, all 20 advisors have committed to join LPL as Lucia Capital Group, and the transaction anticipates a multiple of ~6x post-synergy EBITDA.

How will the acquisition of Lucia Securities impact LPL Financial's revenue?

Although the acquisition adds significant client assets, onboarding risks exist that may affect actual revenue realized from Lucia Securities' clients.

What is the strategic importance of the Lucia Securities acquisition for LPL Financial?

The acquisition strengthens LPL's market position by expanding its advisor network and enhancing its service capabilities, potentially driving future growth.

When are Lucia Securities' client assets expected to onboard to LPL?

The client assets from Lucia Securities are expected to be fully onboarded to LPL's platform by the end of 2020.