SAN DIEGO – May 27, 2020 – Leading retail investment advisory firm and independent broker/dealer LPL Financial LLC, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA) (together, “LPL”), today announced that it has signed an agreement to acquire the assets of E.K. Riley Investments, LLC, a broker-dealer and registered investment advisor (RIA) headquartered in Seattle. E.K. Riley Investments provides independent financial advice to individuals, affluent families, and business owners, with approximately 35 financial advisors and $2 billion of client assets under management.
“We welcome E.K. Riley Investments’ experienced team of advisors to the LPL family,” said Rich Steinmeier, LPL Financial managing director and divisional president, Business Development. “They share our commitment to clients and passion for independence. We are committed to their success, offering the benefits of LPL’s scale as well as access to integrated technology, an innovative wealth management platform and resources to help them run efficient and productive businesses. We look forward to a long-lasting partnership.”
“We chose to partner with LPL as a result of the overall cultural similarities between our two organizations,” said Brian Bertsch, President of E.K. Riley Investments. “Over the last few months we have been consistently impressed with their people-centric culture. We are excited to have our advisors become part of the LPL family.”
Edward Riley, Chairman and CEO of E.K. Riley Investments, agreed: “We believe that LPL’s culture, technology, and other capabilities provide the ideal environment for our financial advisors to offer outstanding service and advice to their clients.”
The transaction is structured as an asset purchase and is expected to close in the second half of 2020. The asset purchase agreement provides for both a payment at closing and potential contingent payments. LPL estimates a transaction multiple of approximately 6x post-synergy EBITDA.
About LPL Financial
LPL Financial is a leader in the retail financial advice market and the nation’s largest independent broker/dealer*. LPL serves independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.
Securities and Advisory Services offered through LPL Financial LLC, registered investment advisor. Member FINRA/SIPC.
*Based on total revenues, Financial Planning magazine June 1996-2019.
Throughout this Press Release, “financial advisors” or “advisors” include registered representatives and/or investment adviser representatives affiliated with LPL Financial LLC, an SEC registered broker-dealer and investment adviser.
Statements in this press release regarding LPL’s and E.K. Riley Investments’ future operating results, growth and plans, including potential future levels of assets serviced, advisor headcount and post-synergy EBITDA, as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the historical performance of LPL and E.K. Riley Investments and LPL’s plans, estimates and expectations as of May 27, 2020. Forward-looking statements are not guarantees that the future levels of assets serviced, results, plans, intentions or expectations expressed or implied by LPL will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause levels of assets serviced, actual financial or operating results, levels of activity, or the timing of events, to be materially different than those expressed or implied by forward-looking statements. In particular, LPL can provide no assurance that the assets reported as serviced by E.K. Riley Investments’ financial advisors will translate into assets serviced at LPL, or that E.K. Riley Investments’ advisors will join LPL. Important factors that could cause or contribute to such differences include: satisfaction of closing conditions under the parties’ purchase agreement, including receipt of transaction approval from the Financial Industry Regulatory Authority; difficulties and delays in recruiting E.K. Riley Investments’ advisors and/or onboarding the clients of E.K. Riley Investments’ advisors, which could negatively affect LPL’s ability to realize revenue or expense synergies or other expected benefits of the transaction; disruptions of LPL’s business that could make it more difficult to maintain relationships with its financial advisors and their clients; the choice by clients of E.K. Riley Investments’ advisors not to open brokerage and/or advisory accounts at LPL; changes in general economic and financial market conditions, including retail investor sentiment; fluctuations in the value of assets under custody; effects of competition in the financial services industry, including competitors’ success in recruiting E.K. Riley Investments’ advisors and their clients; and the other factors set forth in Part I, “Item 1A. Risk Factors” in LPL’s 2019 Annual Report on Form 10-K and any subsequent SEC filing. Except as required by law, LPL specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if its estimates change, and you should not rely on those statements as representing LPL’s views as of any date subsequent to May 27, 2020. Estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.