Merchant stakes $30bn LPL-affiliated Private Advisor Group – Citywire USA

Serial RIA investor Merchant Investment Management has taken a minority stake in Private Advisor Group, an RIA and LPL Financial-affiliated office of supervisory jurisdiction with a combined $30bn in assets under management.
Specific financial terms of the transaction, which closed Friday, were not disclosed.
Based in Morristown, N.J., Private Advisor Group offers services including compliance and technology support for a network of roughly 700 advisors. Firms on its platform list their assets on Private Advisor Group’s Form ADV. In October 2020, the firm launched a limited purpose broker-dealer called PAG Financial to allow advisors to join its network without forcing them to custody their assets with LPL.
Private Advisor Group was founded by John Hyland and Patrick Sullivan when they rebranded their joint practice Morristown Financial Group in 2011. The firm is helmed by chief executive RJ Moore.
Private Advisor Group said in a statement it would use the capital infusion to help RIAs on its platform get access to scale, recruit advisors, execute succession plans and enhance suites of service.
‘The due diligence in finding the right partner was extensive,’ Moore wrote in an email to Citywire. ‘With significant forward momentum, we were seeking a partner mutually aligned with our culture and aligned in making a long-term, measurable commitment to the success of Private Advisor Group. Merchant was the right choice for our future outlook on all of those levels and more.’
Many firms in the wealth management space have recently accepting backing from private equity funds. Moore said he made a conscious decision to go in a different direction.
‘Merchant is an operating company, not a fund. Coming onboard as a direct equity participant without any preferential treatment was a compelling distinction for us relative to a private equity firm,’ Moore wrote.
Founded in 2017, Merchant is structured as a private partnership, and takes minority stakes in wealth managers and affiliated businesses. It has some experience working with OSJs, having taken a minority stake in Concurrent Advisors, a then-$12.2bn OSJ for a group of Raymond James-affiliated advisors, in July.
‘Having spent over 35 years in the investment management and wealth management space, I’ve found that firms like Private Advisor Group are extremely rare,’ stated Merchant executive chairman Marc Spilker (pictured). ‘It’s an organization focused on the fundamentals while continually evolving to stay ahead of trends and best practices to fuel success.’
More recently, Merchant announced earlier this week it took a minority stake in Brainvest Wealth Management, a $3bn alternatives-focused firm with offices in Brazil, Switzerland and Miami.
Ardea Partners served as the financial advisor to Private Advisor Group in the transaction.
Note: This version of the article corrects the date that PAG Financial launched.
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