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LPL Set to Buy Waddell & Reed's Wealth Unit for $300M

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LPL Financial has agreed to buy Waddell & Reed’s wealth management business, which has 921 independent advisors and $63 billion of assets under administration, from Macquarie Asset Management for $300 million.

Also, LPL and Macquarie are forming a long-term arrangement, with Australia-based Macquarie becoming a key asset management partner of the independent broker-dealer.

The deal comes amidst a series of M&As in the financial industry and about six weeks after rumors circulated that JPMorgan and possibly Lazard were considering Waddell & Reed as an acquisition target. This industry chatter circulated just days after Morgan Stanley said it was buying Eaton Vance for $7 billion and Charles Schwab wrapped up its $22 billion purchase of TD Ameritrade.

“More asset/wealth management consolidation with @Macquarie acquiring Waddell & Reed, keeping the asset mgmt business but selling the $63bb W&R wealth biz to @LPL for $300mm and entering into a strategic partnership w/ Macquarie,” tweeted Gavin Spitzner, head of Wealth Consulting Partners. 

LPL says it will complete the transaction after Macquarie Group has acquired all issued and outstanding common shares of parent company Waddell & Reed Financial for $1.7 billion. As part of the deal, Macquarie  which has about $410 billion in global assets  is acquiring Ivy Investments and some $68 billion of assets.

“Waddell & Reed advisors are highly experienced and well-respected throughout the industry. They are a terrific fit both culturally and strategically, and we welcome them to the LPL family,” said Dan Arnold, president and CEO of LPL Financial, in a statement.

As of Sept. 30, LPL had 17,168 financial advisors; thus, if most Waddell & Reed advisors join it, that headcount figure could top 18,000.

The transaction has been approved by the the boards of LPL, Macquarie Group, and Waddell & Reed and is expected to close in the middle of 2021, according to a press release. It is subject to regulatory approvals, Waddell & Reed stockholder approval and other customary closing conditions.

“Ivy Investments’ complementary investment capabilities will provide diversification to Macquarie Asset Management’s capabilities and client base,” according to Martin Stanley, head of Macquarie Asset Management. “The consideration offered reflects the quality of Waddell & Reed’s business and the future benefits of our partnership with LPL.”

Earlier Deals

The news comes about two months after LPL bought Blaze Portfolio, a maker of portfolio trading and rebalancing tools, for $12 million.

At the time the deal was announced, the IBD said it planned to integrate the Blaze tools into its advisor platform and offer that platform to other industry players.

In May, LPL said it was buying E.K. Riley Investments, a broker-dealer and RIA in Seattle with some 35 financial advisors and $2 billion of client assets under management.