Independent Financial Partners Eyes Acquisitions Ahead of B/D Launch

#Lifestyle Wealth


Independent Financial Partners, a super office of supervisory jurisdiction of LPL Financial, is still on track to launch its own broker/dealer in April. And with two new capital partners backing the firm, it is eyeing three b/d acquisition opportunities, each with 100 or more advisors.

“We wanted to have partners that are partnering on the equity side of the deal, but then also have their resources that we can then go to down the road when we say, ‘Hey, we want to look at you guys for providing this type of capital for this type of opportunity,’” said Chris Hamm, chief operating officer at IFP.

IFP recently penned a deal with Pacific Current Group, a global boutique asset management firm, to buy 10 percent of the company, in the form of permanent capital. Fifteen percent of the firm will be owned by advisors who come over initially from LPL; the remainder will be owned by the firm’s principals.

The firm also partnered with NexBank SSB, a Dallas-based institutional lender, to provide a line of credit to IFP.

“We knew we wanted to have capital partners so that once we’re on the other side, we can recruit and compete with the biggest b/ds out there because you have to have pretty competitive transition packages,” Hamm said.

He said the firm expects about 225 to 250 of its 520 existing advisors to move over. One acquisition would add at least 100 advisors; the firm is recruiting just over 30 single advisors from various b/ds, as well as two potential groups of about 30 advisors each.  

“We’re hoping to end the year north of 300 at least, and then kind of move up to 500 from there,” Hamm said.

If IFP were to acquire, the other b/d would likely be integrated in phases. And the principals of the firm would likely stay on, to ensure the retention of their advisors.

“If [the principals] have any type of buy-in or relationship or care for where the advisors go after they sell, a lot of these boutique firms that understand that advisors want a boutique level of service, they don’t hesitate, but they’re going to look to firms like us versus selling to a bigger broker/dealer where these people are going to get less of that boutique service and that boutique mentality,” Hamm said.

The firm would likely integrate one firm at a time to make sure service levels for existing advisors don’t suffer.

“We’re going to start building data metrics, where we can have daily reports from our teams that show turnaround times and SLAs (service level agreements),” Hamm said. “So if we’re pursuing an acquisition and the reports show that the turnaround times are kind of slowing down, then we’ll kind of take a moment to pause, add some staff, add some infrastructure. We want to use data to drive our productivity. We never want it to get to a point where the service model or service level to our current guys is struggling because of anything we’re doing on the exterior.”

IFP, which is not tied to any legacy systems, has been building out its technology stack. So far it has chosen Albridge for wealth reporting, Agreement Express for account opening, Beam Solutions for compliance and Xtiva for compensation management.

“We’re building an environment that’s nimble, that can always be changed, always be added to, always responds to advisors’ feedback,” Hamm said.

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