Marketing Info

One LPL Super OSJ acquires another

Gateway Financial Partners, a Glastonbury, Conn-based large office in the supervisory jurisdiction of LPL Financial, has acquired Advisors Pride, another LPL OSJ in Appleton, Wis. The deal represents Gateway’s first major OSJ acquisition, and has more than doubled its number of advisors, with the firm now serving 170 advisors in 26 states and a combined $7 billion in assets under management.

According to an announcement, the deal was a joint acquisition of Gateway founder David Wood and former Advisors Pride chairman Eric Hall. The combined firm will have 95 support team members, and will operate under the Gateway brand.

Wood says this is the first deal for Gateway in anticipation of several acquisitions from other OSJs.

“It’s not another done,” said Wood. “I think we’re really well positioned to take our value proposition, which is strong, introducing the proud people of advisors to help them grow faster, the way they do. And then we’re actively looking for others. We have a great value proposition, but I don’t think we had enough advisor base to take advantage of it.

Wood said that Advisors Pride was more of a traditional or facilitator-type OSJ, a group that came together to take advantage of the economics of the broker/dealer and offered nothing beyond that. Gateway is more of a “business-builder OSJ,” larger organizations that provide the infrastructure to consultants beyond trying to take advantage of the economics. Gateway provides leadership, operations, marketing and technology support.

“We’re trying to act as a business partner for them, providing consultants with a deeper level of resources so they can outsource non-revenue producing activities,” Wood said. “That scale is enabling our advisors to grow really fast.”

Last year, Gateway’s average advisor grew its revenue by 40%, and Wood expects Pride of Advisors advisors to tap into that growth support.

As Gateway looks to make more acquisitions, the firm may bring in a capital partner, such as Merchant Investment Management, Wood said. Merchant has taken a minority stake in another LPL OSJ.

Gateway will be looking to such partnerships not only to help finance other deals in the future, but also for the leadership and intellectual capital RIA receives from these firms.

“I think there’s a bunch of firms like Merchant that are really trying to help their partners now that they have an equity stake in the growth, so that becomes another growth strategy for us,” Wood said.

“There are little OSJ’s who I think are going to come under pressure because the advisor sits back and says ‘Hey, this other firm is doing all these things, and I don’t get it from my current firm. And I think it will be more relevant when the market doesn’t grow 30% a year,” Wood says.

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