Independent Financial Partners (IFP), a registered investment adviser and office of supervisory jurisdiction for LPL Financial, has finalized financial commitments from two partners, Pacific Current Group and NexBank, ahead of its broker-dealer launch, which has a target date of April 1st.
IFP joined LPL in 2007 following LPL’s acquisition of its former broker-dealer, Mutual Service Corporation. In April 2018, IFP announced plans to leave the firm and launch its own broker-dealer within the first half of 2019.
Pacific Current Group, a global multi-boutique asset management firm, has purchased a 10 percent interest in IFP in the form of permanent capital. A permanent capital equity structure, unlike traditional private equity, signifies a long-term partnership.
“When we decided to start vetting equity partners, from the beginning we only spoke with those offering permanent capital,” said IFP CEO Bill Hamm. “We’re in this for the long run and we wanted a partner that felt the same. We’re not looking to build this firm and flip it in five years. Rather, we’re looking to disrupt our industry and build a long-lasting company.”
Pacific Current Group rounds out the three tiers of what will be IFP’s broker-dealer ownership structure. They will own 10 percent of the firm; IFP is granting 15 percent to the advisors that transition to the broker-dealer once it’s launched; and IFP and its principals will maintain control with the remaining majority stake in the firm.
In addition to the Pacific Current Group, Dallas-based institutional lender NexBank SSB, the primary subsidiary of NexBank Capital Inc., will provide a line of credit to assist IFP in growing its infrastructure and advisor headcount.
“If we want to be able to compete with the LPL’s and Cetera’s of the world, we need to be able to recruit advisors and acquire other RIAs and broker-dealers. We need capital partners like NexBank and Pac Current to make that happen,” said Bill McCauley, IFP chief financial officer, who joined the firm in July 2018.
IFP works with its network of financial advisors to provide technological, compliance, marketing, business development, and operational support. Its advisors have more than $40 billion in assets under advisement, as of December 31, 2017.