What are LPL, Cambridge paying for advisors’ businesses?

investmentnews.com:

Now that independent broker-dealers are competing in the red-hot mergers and acquisitions market to buy registered investment advisors and wealth managers, they’re paying millions of dollars for financial advisors’ business, the same non-employee advisors who were already registered with the firms.

IBDs like LPL Financial and Cambridge Investment Research Inc. in the past week reported assorted details about the deals they completed last year in filings with the Securities and Exchange Commission. One striking aspect to the acquisitions is that the old adage of the independent broker-dealer industry, that a firm like LPL or Cambridge would never own a broker’s book of business, has disappeared over time.

IBDs want to buy their advisors’ practices, and in abundance.

In its annual audited financial statement, known as a Focus report, LPL Financial reported on February 21 that last year the IBD giant, with 21,000 financial advisors, had completed a total of 19 acquisitions using a program called its “liquidity and succession” solution, in which it buys advisors’ practices. The total consideration for just five of those transactions was $190.2 million, with potential future payments of another $107.2 million for those firms.

Meanwhile, Cambridge Investment Research Inc., another industry leader, said Tuesday in its 2023 Focus report that last year it acquired the commission business of Antaeus Wealth Advisors Inc., which uses Cambridge as its broker-dealer, for a total consideration of close to $4.4 million.

The managing partner of Antaeus Wealth Advisors, A. J. Sohn, did not return a call Wednesday afternoon to comment. A spokesperson for Cambridge did not comment.

For years, broker-dealers have had a variety of