DPL Financial Partners, the Louisville, Ky.-based no-load, commission-free annuity platform for RIAs, has agreed to acquire AnnuityFix and its affiliated Johnstone Brokerage Services.

AnnuityFix is a Center, Texas-based firm that helps advisors become independent from the broker-dealers that control their clients’ annuities. Its founder and CEO, Grant Johnstone, will become DPL’s chief compliance officer and chief legal officer, primarily working with the firm’s Breakaway Accelerator program, which is similarly designed to aid RIAs in ending their broker-dealer relationships with annuity providers and, instead, manage their annuity assets in a fiduciary capacity.

Terms of the deal were not announced.

“While we have always worked with advisors and firms to help transition their annuity business, AnnuityFix gives us some additional scale and capabilities,” explained David Lau, CEO and founder of DPL, in an email interview. “At the same time, we give them far greater reach. … AnnuityFix [will] become an important component to our Breakaway Accelerator program.”

Many new annuities are commission-free and, therefore, less expensive for clients. But advisors who have a book of business in the traditional commission-based model of annuities often have a hard time breaking away, said Lau.

He called this struggle “a significant problem for many advisors and firms looking to go independent.” Annuities, he said, are “the last major asset class tethering advisors to their broker-dealer.”

In a separate email interview, Johnstone concurred about the enormity of the need to help these advisors break free of the trailing-commissions model. “The opportunity is so big that we needed the combined scale to service the market,” he said.

By providing a way to move annuity assets to a fee-based model, Breakaway Accelerator and AnnuityFix enable firms to go independent that might not be able to otherwise, without losing their existing annuity assets, said Lau. Breakaway Accelerator was launched late last year.

“Through DPL's technology and no-load product set, we can exchange many of their legacy annuities into products that provide better value to clients while turning the assets into billable assets for the firm,” Lau continued. “For policies that may not make sense for the client to currently transition to one of our no-load products, we can employ AnnuityFix's capabilities to move those assets.”

In a prepared statement, Johnstone said he was “excited to combine the expertise of the AnnuityFix team with DPL’s market-leading, turnkey solution for transitioning breakaway annuity assets. It’s a huge win for the advisor and client, both of whom will benefit from DPL’s commission-free product offerings and proprietary technology for evaluating, transitioning and managing large blocks of annuity assets.”

Part of the transition process for advisors involves evaluating existing annuity contracts to determine if exchanging them for commission-free products on the DPL platform would actually be beneficial for the client. If a transition does make sense, the technology and support facilitate the process, DPL said in a press release. If it does not, DPL can still help move the policies from the advisor’s existing broker-dealer to effectively name DPL as the “agent of record,” allowing the advisor to retain control of the client relationship, the company said.

“Through our large advisory network and strong brand awareness, DPL brings tremendous reach to expand the business that Grant built,” said Lau.