Wealth Enhancement Group, a Minneapolis-based registered investment adviser with more than $96 billion in client assets, is being spun off from LPL Financial, the independent broker/dealer has confirmed. WEG has operated as the superoffice of LPL's supervisory jurisdiction for at least 17 years.
“LPL and WEG have enjoyed a mutually beneficial partnership for many years,” said LPL spokeswoman Jen Roche. “However, as both companies continue to evolve, WEG will no longer have a relationship with LPL. We remain committed to ensuring a smooth transition for WEG advisors and their clients, and we are confident that this change will ultimately benefit and enhance LPL's ability to support our valued clients. This decision aligns with our strategic intent to focus our investments on partnerships that reflect LPL's mission and operating models.
In a July earnings call, former LPL CEO Dan Arnold said there were a “couple of isolated CSO firms” that were “strategically misaligned with our mission and our model because they were limiting our ability to advisers to choose how and where they would do business”. He also said the two firms represented $20 billion in combined assets.
Matt Audette, CFO and president of LPL, added on the same earnings call that these CSOs were not growing and were actually a drag on organic growth.
In late July, Merit Financial Advisors, with $12 billion in assets, spun off from LPL and transferred its business to PKS Investments.
“At the end of the day, these separations will strengthen our overall ecosystem and position us to better serve the great partners on our platform,” Arnold said on the July earnings call.
in October, Arnold was fired for cause after an investigation by an external law firm revealed that “he has made statements to employees who have violated the LPL Code of Conduct. Rich Steinmeier, who was managing director and chief growth officer, has since been appointed to replace him as CEO.
As of September 30, WEG had $4 billion in brokerage assets held at LPL.
A spokeswoman for WEG did not return a request for comment before publication.
Founded in 1997, WEG has grown assets from about $4 billion to more than $96 billion since selling a majority stake to Lightyear Capital in 2015.
WEG was overseeing about $12 billion at the time Associates of TA bought Lightyear's investment in 2019. When Onex Partners came on board as majority owner in 2021, the firm was managing approximately $40 billion.
The firm has been aggressively acquiring RIAs over the past two years. In 2023, it completed 18 acquisitions and 15 deals so far this year, behind it the most recent deal with M&R Capital Managementa Summit, NJ-based RIA with more than $536 million in client assets.
In July, a man who claims to have co-founded WEG filed a lawsuit against RIAclaiming it refused to pay him “finder's fees” for firms the company bought.
Gerald “Jerry” Bernard filed the lawsuit in Minnesota's Hennepin County, seeking more than $50,000. According to the lawsuit, Bernard has over 40 years in the wealth management industry and co-founded WEG with his wife, Madeline, in 1996.