In a major effort to expand into the high-net-worth, alternative investment market, LPL Financial has acquired Rockville, Md.-based Fortigent LLC, a leading provider of alternative investment platforms to advisors targeting affluent investors.

Fortigent will retain its brand name, its management team and its Rockville headquarters after the acquisition, which is expected to close in the first quarter, according to LPL.

Andrew Putterman will continue to lead Fortigent, reporting directly to Robert Moore, chief financial officer of LPL Financial.

The financial terms of the deal were not disclosed.

The average Fortigent client has about $7 million in assets, so it brings LPL into a market where most custodians and broker-dealers have a minimal presence. "Building upon our growing success with RIAs and high-net-worth advisors, this acquisition will combine LPL Financial's scale and experience in helping advisors manage the complexity and growth of their practices with Fortigent's robust platform of research, reporting and alternative investment solutions for RIAs and ultra high-net-worth advisors," Moore said in a prepared statement.

Sources close to LPL said they believed the acquisition represented an attempt to use acquisitions to move into adjacent markets, as well as offer more services to LPL-affiliated advisors who focus on high-net-worth families with intergenerational wealth issues. Last year the firm held a conference for LPL advisors who specialize in this client segment.

In a letter to Fortigent clients, most of whom are RIAs, Putterman said the acquisition would not affect their ability "to work with any custodian."

Fortigent has about 90 clients, including RIA firms, banks and other financial institutions, which collectively run more than $50 billion through its various platforms. The firm provides research, due diligence, technology solutions and  portfolio construction services for clients on an a la carte basis. "Due diligence is important [to advisors] in the alternative investment business," Putterman noted.

Moore told Financial Advisor that LPL's recent acquisitions have focused on newer, adjacent markets that can fill gaps in their service offerings. With 13,000 advisors affiliated with the firm, "it is not about scale for us any longer. It's about delivery, innovation and technology enhancement."

David DeVoe, an industry consultant in San Francisco, notes that the bulk of LPL's advisors run small- to mid-sized practices serving the mass affluent market who won't immediately benefit from Fortigent's platform aimed at high-net-worth investors. "But I see potential for LPL to take a lot of what Fortigent has created and potentially crafting solutions to be used by LPL's broader base of advisors," he says.

DeVoe believes the merger makes sense, even if the two companies have followed different models in the past. "LPL is used to providing scaled solutions to a broad base of thousands of clients, while Fortigent is more accustomed to creating tailored solutions to a much smaller group of advisors," he says. "But overall, I sense this could be a good cultural fit."