LPL Financial announced on Tuesday that it has acquired National Planning Holdings (NPH), Jackson National’s 3,500-representative broker-dealer network.
In a transaction signed on Tuesday, San Diego-based LPL agreed to pay an initial purchase price of $325 million for NPH, with a potential additional payment between $0 and $123 million to come in 2018, contingent upon the portion of NPH’s business that is onboarded onto LPL’s platform.
If less than 72 percent of NPH’s production is onboarded to LPL’s platform, no contingent payment would be due. If 72 percent or more of the business moves to LPL, the amount of the contingent payment will increase on an interpolated basis.
The transaction is being funded with cash, according to LPL.
NPH’s four subsidiary firms have previously cleared at Pershing and Fidelity. Moving forward they will clear at LPL, said Dan Arnold, LPL Financial president and CEO, in a released statement.
“This transaction adds to our scale, which we can leverage to provide LPL and NPH advisors with the capabilities they need, and the service they expect, at a compelling price,” said Arnold. “NPH advisors share our passion for independence and serving American investors. At LPL, NPH advisors and their clients will benefit from our scale, strength, and breadth of services, including the advantages of our self-clearing platform.”
The NPH network includes INVEST and Investment Centers of America, two brokerages with a major presence in banks and credit unions, along with National Planning Corp. and SII, which are traditionally oriented independent broker-dealers.
As LPL already does substantial business in the bank and credit union segments, NPH may be a naturual fit for its business.
Scott Romine, president and CEO of NPH, said that LPL’s business model also made it an attractive buyer.
“Given the similarities in LPL’s independent model to the NPH model, we believe LPL is the ideal acquirer to ensure continuity of the quality service and support for our clients and their financial advisors,” Romine said in a released comment.