LaSalle St., a Chicago-based family of wealth management firms, has launched an interest-free loan program to support its financial advisors in executing succession planning deals, irrespective of the firm affiliations of their transaction partners, according to a news release.
The Zero-Rate M&A Loan Program does not charge a markup fee in order to facilitate deals for retiring or growing advisors as they create partnerships, valuations and transitions, the release said.
LaSalle St. said the average loan sizes will range from $250,000 to $750,000 and will be targeted for delivery to advisors over the next 12 months. It said the terms of the loans will be designed to suit each unique M&A opportunity, including the total amount, the periodic payment and time frame to maturity.
The new program substantially expands loan funding capacity for the firm’s pre-existing zero-interest-rate succession loan capabilities, while offering a comprehensive spectrum of consultative and valuation services free of charge to the 300 financial advisor businesses across the country affiliated with its broker-dealer, LaSalle St. Securities; its registered investment advisory, LaSalle St. Investment Advisors; or both platforms.
Mark Contey, senior vice president of business development for LaSalle St., said the creation of the new program demonstrates LaSalle St.’s unique commitment to saving financial advisors money while working closely with them, so they can better grow their business and serve clients. “Far too often, advisors face unnecessary constraints when pursuing succession planning deals. Paying 7% to 10% interest rates is a major obstacle, as is involving third-party lenders that require time-consuming extra paperwork and approvals. For that reason, we expect to see significant interest from our advisors out of the gate and fast growth in the months to come,” he said in a statement.
In addition to its zero-percent interest rate and zero markup fees, the release said the program includes other financing features that help affiliated advisors multiply their assets under management and annual production with each transaction:
• The program offers flexibility that allows repayment to LaSalle St. or earn-outs to selling advisors through the acquiring advisor’s revenues from the new book of business.
• The program allows retiring advisors to temporarily remain on LaSalle St.’s platforms after the transactions close to ensure the advisors’ legacy is upheld in accordance with the deal terms.
• The program provides freedom for affiliated advisors acquiring books of business to choose deal partners that either are affiliated with LaSalle St. Securities, LaSalle St. Investment Advisors or an outside firm.
Additionally, LaSalle St. said the loan program provides affiliated advisors with strategic guidance on conducting seamless and efficient succession planning deals by helping them find compatible deal partners, achieve fair practice valuations and transition clients for high retention.