The March 2025 acquisition of Commonwealth Financial Network by LPL Financial hit an immediate nerve in wealth management, an industry where consolidation is endemic: a recent Echelon Partners report shows the industry’s 366 M&A deals in 2024 outpaced 2023’s robust transaction total by 14%.
The element of surprise was certainly a factor, as few saw this deal coming. The seeming mismatch between the firms in terms of size and culture was another source of angst. And the expected uncertainty felt by those immediately affected metastasized into a broader reflection of the state of the industry itself. The typical “What does this mean to me?” asked by employees and financial advisors of both firms diffused quickly into the industry at large, morphing into an existential “What does this mean for the industry as a whole?” discussion.
Watercooler talk is out. Reddit threads are in.
Few things embolden individuals to share what’s really on their mind more than the anonymity of a social media message board. A quick review of Reddit threads associated with the LPL/Commonwealth deal in the weeks following the deal tells a compelling, if unscientific, story. It’s one of betrayal, disillusionment, uncertainty and worry. Still, such forums can be cathartic and may perhaps represent an exaggeration of sentiment.
Kneejerk reactions aside, one thing is certain: From the moment the wealth management industry began to digest the news, LPL’s competitors have been at work showcasing their value propositions with an eye toward getting in front of Commonwealth financial professionals dissatisfied with the deal.
We spoke with three industry executives on the front lines of advisor recruiting for their take on the ongoing fallout of the LPL/Commonwealth deal and how advisors and firms can navigate the current wealth management landscape:
- Amit Dogra, President and Chief Innovation Officer, tru Independence, a Portland, OR-based enterprise supporting established, independent RIAs and breakaway advisors seeking to grow their businesses
- Jeff Vivacqua, President, Growth and Development, Cambridge Investment Research, Inc., an internally controlled and operated financial solutions firm focused on serving independent financial professionals and their clients
- Samantha Sferas, Chief Operating Officer, Terrana Group, a Chicago-based financial advisor recruiting consultancy
Below are their perspectives.
Q: What can advisors do to preserve their value proposition/culture after being acquired, or is losing part of themselves an inevitability?
Amit Dogra – This is the time where advisors have the most amount of leverage and we’re seeing them use that leverage in negotiations as seen by the promise of loan notes being forgiven if the Commonwealth name ever goes away.
Ideally, advisors should be looking to get concessions before they ever sign with a firm, but an acquisition is an opportunity to “re-trade” their deal. The ability to get guarantees around their ability to maintain the same level of independence may prove difficult, so flexibility through the use of “if, then” clauses like the one in place around the Commonwealth name, can be easier to achieve.
Client data, flexibility on leaving, time-based promises are ways an advisor can maintain their value proposition with clients and feel like they have some control over their circumstances.
Q: Given the initial backlash on Reddit and beyond, what steps can LPL or Commonwealth take right now to restore confidence among advisors and clients still leery of the deal?
Jeff Vivacqua – Having personally experienced a firm transition into LPL – when PacLife’s broker-dealers were acquired – I understand the uncertainty moments like this create. Advisors have every right to ask tough questions. But rather than focusing solely on the strategic rationale behind the deal, the conversation should remain centered on what truly matters to advisors today: internal control, service experience, trusted relationships and long-term business needs.
Whether you’re affiliated with Commonwealth, LPL, or Cambridge, advisors need to consider what’s most important to them and their unique business model. Is it aligning with a firm that maintains control over its direction and decisions – or chasing a transition package or lower platform pricing that may not ultimately serve their long-term strategy?
In my experience, advisors aren’t looking to fit into a firm’s structure. They’re looking for a firm that fits and supports the way they do business. That’s why, in most recruiting conversations, transition dollars and pricing often take a back seat to culture, people, flexibility and a firm’s true commitment to independence.
Any firm can claim to be truly independent, but not all are equally aligned with that promise. The real opportunity right now is for advisors to step back and ask, “Does my firm put advisors first?” “Does it lead with conviction and clarity?”
Ultimately, this moment isn’t just about what the buyer or seller could have done differently, or what they promise to do in the future. It’s a chance for advisors to refocus on what matters most to them and the future of their business.
Q:. Have online negative comments tracked with what third-party recruiters across the board are hearing from Commonwealth-affiliated financial advisors? If so, what sort of business structure (i.e., RIA, IAR-only, hybrid advisor) and wealth management enterprise partner will the majority of Commonwealth-affiliated advisors seek if they reject the move to LPL?
A: Samantha Sferas – While there is always a certain amount of uncertainty in an acquisition when blending two distinct professional cultures, deals like this are usually in the works for quite some time before they’re ever announced. LPL is putting down billions in cash, which signifies a healthy level of confidence in the success of this venture.
The postings made by anonymous commentators on Reddit are generally very emotional and intense; however, many of these comments were made before the LPL and Commonwealth deal was officially announced. I don’t believe the decision by the Commonwealth leadership to enter into an acquisition was made lightly. Through the lengthy conversations they have had with many of their competitive suitors, LPL has definitely demonstrated the synergy the Commonwealth leadership sought for their 45-year-old firm and their Advisor family.
I have had many conversations with Commonwealth Financial advisors over the years and have connected with several since the announcement was made. I have not come across the level of animosity displayed by the anonymous Reddit posters, and I believe that the majority of Commonwealth advisors are looking to the future with optimism.
LPL has guaranteed to keep the Commonwealth name intact, and they’re demonstrating a deep commitment to preserving the Commonwealth brand and experience.
Source, paragraph 1: https://7475083.fs1.hubspotusercontent-na1.net/hubfs/7475083/ECHELON%202024%20RIA%20M%26A%20Deal%20Report.pdf at beginning of CEO overview on page 4.
