LPL will buy Waddell & Reed’s wealth management business for $300M

LPL Financial plans to acquire Waddell & Reed’s wealth management business for $300 million.

The purchase is part of a larger deal for Macquarie Group, Australia’s largest investment bank, to acquire Waddell & Reed for $1.7 billion to expand its presence in U.S. asset management. Following completion of the deal, Macquarie will sell the wealth management division to LPL.

Waddell & Read has about $63 billion in assets under advisement, with 45% in advisory and 55% in brokerage, according to LPL. The firm has 900 financial advisors. Waddell & Read has an average of $70 million of client assets per advisor.

It’s a big win for LPL, which has added more than 800 advisors over the past year and has a total headcount over 17,000.

It also marks the latest major M&A deal in wealth management, following Charles Schwab’s acquisition of TD Ameritrade and Morgan Stanley’s acquisition of E-Trade.

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Macquarie will become one of LPL’s top tier asset management partners, according to a statement from Dan Arnold, LPL Financial’s chief executive officer. The partnership will help the independent broker-dealer “preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities,” Arnold said.

The deal is expected to close in the middle of 2021, with Waddell & Reed advisors and client assets joining LPL’s platform shortly after, according to LPL. The firm anticipates spending $85 million for onboarding and integration.