LPL Seeks to Raise $4B in Fresh Capital

Gotta spend money to make money.

LPL Financial is looking to raise as much as $4 billion in capital, per a Securities and Exchange Commission filing this week. The new funding would go toward “general corporate purposes,” like supporting M&A activity, and comes at an opportune time as the wealth management industry broke deal-making records last year. An influx of billions of dollars could take LPL, which is already the largest independent broker-dealer with some 28,000 advisors, to new heights. 

The step marks one of the first significant moves under Rich Steinmeier, who took over as CEO after longtime executive Dan Arnold was terminated in October for violating the company’s respectful workplace policies. LPL’s “long-term vision is to become the leader across the advisor-centered marketplace,” Steinmeier said during the company’s earnings call in January.

Bigger is Better

The request for new capital comes at a time of healthy growth and innovation for LPL. Not only did it beat its earnings in the fourth quarter, generating $3.5 billion in revenue, but it also reported spending $2.3 billion on net advisors loans last year to secure new talent:

• Additionally, the company launched its alternative investing platform, LPL Alts Connect, in February.
• That same month, LPL started a program that would allow some advisors to custody client assets at other firms, including Charles Schwab.

In just the last three months of 2024, LPL added more than 6,200 brokers to its network, thanks to its acquisition of Atria Wealth Solutions and agreeing to serve as the broker-dealer for thousands of advisors at Prudential Financial. LPL declined to comment.

As the old saying goes: the more M&A, the merrier.