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Could Charles Schwab Make a Play for LPL?

A source told that Schwab is among the bidders for LPL Financial, while a source told that the firm is not interested in getting into the IBD space.

Unsubstantiated rumors around which firm is looking to buy LPL continue to arise. The latest? San Francisco-based Charles Schwab, according to a report by the investment site A source familiar with the matter told the publication that Schwab could pay as much as $4.5 billion for the Boston-based firm. Previous names floated as potential buyers include Cetera and Pershing. 

A source close to Schwab told that the firm was not interested in getting into the IBD space. Reuters reported in October that the IBD was exploring strategic alternatives, including a potential sale. On its third-quarter earnings call earlier this month, LPL Chief Financial Officer Matt Audette addressed the reports, saying that the firm is focused on creating long-term value for its shareholders and that the firm would not comment beyond that.’s source said the firm started exploring a sale after an unsolicited offer, which it believed was too low.

Equity research analysts following LPL said they were surprised by the Reuters report that the nation's largest independent broker/dealer is exploring a sale given the uncertain environment for independent b/ds coming under compliance burdens related to regulations like the Department of Labor’s fiduciary rule. While that rule could be the catalyst for current shareholders to look to sell the firm, it could also turn off potential buyers. 

Analysts doubt Schwab would want to take on the fiduciary risk associated with LPL. 

Both Schwab and LPL declined to comment.

TAGS: Industry
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