As part of its planned purchase of Waddell & Reed’s wealth management unit, LPL Financial aims to keep the acquired firm’s Midwest base and use it as a service center, according to LPL Business Development chief Rich Steinmeier.
It also expects there to be limited paperwork for W&R’s clients and that it will retain over 70% of its 921 advisors.
LPL aims to “introduce a new service and operations center [in the Kansas City area] and anticipates it will be largely staffed by existing Waddell & Reed employees,” Steinmeier said.
“This is a strategic fit, and we’re not making lemonade out of lemons,” he explained in an interview Monday. “We need a Midwest operations and service [center],” which is different in its focus and reach from LPL’s new technology campus in Austin, Texas.
LPL’s main campuses are in Boston; San Diego; and Fort Mills, South Carolina. W&R’s operations are now based in Overland Park, Kansas, and the firm is building an 18-story tower in downtown Kansas City.
“We are really happy about … the talent in this service and operations facility,” Steinmeier said. “Waddell & Reed advisors beam about the service and about the financial planning and other teams there, so we’re excited to get it.”
Plus, LPL has bought the W&R brand name. “So if [advisors] want to continue as Waddell & Reed, they can do so. We are keeping the … connective tissues,” said the executive, referring to the brand and to its longer-term LPL-Macquarie Asset Management partnership that is part of the transaction.
Turning to account transfers from W&R to LPL, Steinmeier said “largely for the brokerage side of the business, there should be no repapering.”
“For the advisory side, we feel strongly that about 70-80%-plus, and potentially up to 100%,” should move onto LPL’s Advisory platform via negative consent, he explained, with some exceptions.