LPL to Add $50B in Prudential Wealth Assets

Prudential Financial will move some $50 billion in investment advisory and annuity assets now custodied by Fidelity’s National Financial Services unit, other firms and Prudential to LPL Financial as part of a deal announced early Thursday.

For its part, LPL will expand its platform and services to some 2,600 Prudential Advisors’ financial professionals.

After the transition — set to wrap up in the second half of 2024 — Prudential Advisors will continue to “offer financial planning, investment, insurance and retirement solutions, enhanced by the improved capabilities of the LPL platform and utilizing LPL for clients’ brokerage and investment advisory needs,” according to a statement.

LPL estimates this new business should result in $60 million a year or more in earnings after Prudential Advisors’ $50 billion of assets have moved onto its platform from Fidelity and other custodial firms.

The broker-dealer also expects the total cost of onboarding and integrating the assets to be $125 million, with roughly 40% of these expenses set to be recognized in the second half of 2024. 

As of June 30, the firm’s total platform assets stood at $1.24 trillion. LPL worked with some 21,942 advisors as of the second quarter, a jump of 421 from March 31 and up 1,071 from June 30, 2022.

For LPL, the Prudential deal “is a significant milestone in our mission to offer sophisticated wealth management capabilities to more enterprise firms and their advisors,” Ken Hullings, LPL’s executive vice president of Enterprise Business Development, said in a press release.

“Prudential has a revered reputation of being a pillar of the financial services industry. They have also been a valued partner of LPL’s since 1989 in the life and annuity space. We look forward to our expanded relationship and welcoming Prudential Advisors to our platform,” Hullings added.

LPL’s share price was up 1.5% to $232.68 as of 1:30 p.m. in New York on Thursday; year to date, its stock is up roughly 7%.

News about the deal with Prudential comes just three days after LPL said it added a 16-advisor team formerly with Kestra Financial that has managed about $1.5 billion in advisory, brokerage and retirement plan assets.

Thursday’s news also comes about six years after LPL bought the independent broker-dealer network National Planning Holdings from Prudential plc — which is based in the United Kingdom and not affiliated with Prudential Financial — for an initial price of $325 million. In early 2018, LPL said it had retained about 60% of NPH’s 3,200 financial advisors.

(Credit: LPL Financial)