Asset manager Macquarie has announced plans to acquire asset management firm and broker/dealer Waddell & Reed, then sell the firm’s b/d business to LPL Financial for $300 million at close. The deal, expected to be completed in the middle of next year, encompasses 921 independent advisors with $63 billion in assets under administration.
Waddell & Reed’s asset management business, distributed under Ivy Investments, will become part of Macquarie Asset Management. As part of the deal, Macquarie will become one of LPL’s “strategic asset management partners” to provide advisors and clients with continuity.
Waddell & Reed was three years into a plan to shift its business model away from its 83-year-old legacy as a mutual fund company with a brokerage force attached. In 2017, the firm hired President Shawn Mihal to position itself as a wealth management firm offering comprehensive financial planning. Mihal parsed the brokerage ranks of lower-producing advisors and began to open up the wealth management platform to sell funds from other asset managers.
In 2018, Waddell said it would stop leasing space for independent advisors and that the firm would raise advisor payout up to 94%.
In 2019, Waddell centered its attention on advisor recruitment while continuing to better its advisor technology. Last year, the firm launched WaddellONE, a desktop platform and hub integrating the firm’s technology partners, and recently announced MAPDirect, which gives advisors access to nearly 200 ETFs and 1,800 mutual funds.
This summer, the firm appointed Eric Meltzer as its new chief technology officer, with a plan to overhaul its digital efforts on both the asset management and wealth management sides of the business.
“Waddell & Reed advisors are highly experienced and well-respected throughout the industry. They are a terrific fit both culturally and strategically, and we welcome them to the LPL family,” LPL CEO Dan Arnold said in a statement. “Looking ahead, we expect our capabilities and resources will benefit their practices and help them unlock additional value and growth. Additionally, we look forward to deepening our long-term partnership with Macquarie, which will help us preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities together.”
The Waddell acquisition comes on the heels of LPL adding M&T Bank's retail brokerage and advisory business to its platform in July. M&T’s 170 advisors managed $20 billion in retail assets.
And last month, LPL acquired Chicago-based Blaze Portfolio for $12 million, integrating the advisor-facing trading system into the independent broker/dealer’s ClientWorks platform.