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Prudential Financial Taking Retail Brokerage and Advisory Assets to LPL

The transition of 2,600 advisors and more than $50 billion in assets is expected to take more than a year and increase LPL’s earnings by $60 million

Prudential Financial will move retail brokerage and investment advisory assets from current third-party custodian Fidelity to LPL Financial in a transition expected to be completed late next year.

Under a ‘strategic relationship agreement’ announced Thursday, LPL will build out a new technology platform to offer a broader range of enterprise capabilities and expand services for Prudential’s approximately 2,600 advisors, who oversee some $50 billion in client assets.

LPL’s EVP of Enterprise Business Development Ken Hullings called the deal “a significant milestone in our mission to offer sophisticated wealth management capabilities to more enterprise firms and their advisors,” and noted that the two companies have been doing business in the life and annuity space since 1989.

Brad Hearn, Prudential’s president of retail advice and solutions, said the partnership will “significantly improve capabilities to help our advisors serve clients … while streamlining and reducing back-office resource demands.”

Advisor training and the platform buildout are expected to take a little more than a year, and Prudential-affiliated advisors will be onboarded in the fourth quarter of 2024 if all goes to plan.

With an asset mix that is three-quarters brokerage and client cash sweep balances of around $1 billion, LPL estimates the addition of Prudential will increase the custodian’s overall earnings by around 3%, or $60 million. Both companies saw their stock climb on Thursday morning.

The largest independent broker/dealer in the nation, LPL recruited around $32 billion in assets to its platform during the first two quarters of 2023, ending the second half of the year with 21,942 advisors and $1.2 trillion in advisory and brokerage assets.

TAGS: Brokerage
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