LPL is folding its UVEST banking investment sales unit into its self-clearing platform, finally giving the firm's bank and credit union affiliates access to its clearing capabilities but putting the long-term future of UVEST in question.
The move was reportedly motivated by requests from UVEST's legacy bank affiliates to switch platforms. Previously, they would have used the proprietary UVEST platform and used Pershing for clearing purposes.
However, in the years since LPL acquired UVEST, most new clients came in via the firm's financial institution services division and used the LPL platform, so UVEST was not exactly growing very fast anyway.
Recently, UVEST had maybe 450 bank affiliates and under 50 in-house advisors and reps on its platform and brought in gross revenue of $195 million, compared to LPL proper's revenue of $2.6 billion.
It's definitely the kind of bolt-on acquisition that LPL can benefit from -- and which the firm is known for making over the years. Adding 500 independent-minded reps would be beneath the attention of any of the wirehouses, but would simply add scale to LPL's already massive platform.