Fortigent’s top management isn’t going anywhere as a result of its impending acquisition by LPL, the wealth management outsourcing firm’s president and chief executive Andrew Putterman reassured clients gathered yesterday in Savannah, GA.

Fortigent’s top management isn’t going anywhere as a result of its impending acquisition by LPL, the country’s largest independent broker-dealer, the wealth management outsourcing firm’s president and chief executive Andrew Putterman reassured clients gathered yesterday in Savannah, GA for the company’s annual Winter Forum.

Fortigent will also continue to focus its reporting, research and UMA platform on the high-end of the market and has no plans to move “downstream,” Putterman said. “Our team, our focus and our service model are not changing,” he said. “We will continue to be a high-touch firm serving the high net worth market. LPL is not looking for Fortigent to go to 12,000 advisors.”

Concerns about the impact of the LPL deal on Fortigent’s culture and service offerings were very much on the minds of Fortigent clients and asset managers in Savannah. “People are afraid that there might be a culture collision if someone from LPL comes in and people from Fortigent leave,” said one wealth manager.

The blockbuster deal which stunned the wealth management world was first announced at the beginning of the year, triggering industry speculation about the future of the company as well as client concerns about its independence. Putterman acknowledged that he was very much aware of the concerns, and did his best to allay them in his keynote address to the conference.

Separate company

Fortigent will be an autonomous, separate company within LPL Investment Holdings, Putterman said, and will be “represented on the executive side of LPL.” And even though LPL is also a custodian, Fortigent will continue to support an open-architecture platform.

The acquisition is expected to close in April, and LPL will buy 100 per cent of the firm, including the equity shares of Lydian Holdings and the private equity firm Affiliated Management Group. Nor will the deal include “earn out” provisions for top management, allaying conflict of interest concerns by clients.

When Fortigent began discussions with potential strategic partners last year, Putterman said, it was clear that LPL executives were “big thinkers” but did not have a lot of experience in the high net worth market. But the two companies ultimately proved to have a shared strategic vision, shared values and compatible cultures.

“I couldn’t be more excited,” Putterman said. “I see this move as a springboard that will allow us to enhance our offering and take the business to the next level.”

Fortigent clients say they like what they hear so far, but want to see how the acquisition plays out.

“I trust them so far,” said Joan Malloy, managing partner for Greenway Family Office in Saint Louis, MO. “I was concerned about being diluted but they said that wouldn’t happen and that the deal would enhance the technology offering and allow them to do more economic research. Those both sound like positives, so we’ll just have to sit back and see.”

Others said Fortigent  - and its clients - would have eventually faced the same issues even without hooking up with LPL.

“Either I will continue to get the same intelligence as in the past as they grow or I won’t,” said Barry Glassman, principal of Glassman Wealth Services. “That was going to happen anyway as they grew from having 100 to 200 advisors with or without LPL. The second question is, will the brand be diluted? Clients want to feel they have something that’s exclusive. It’s the same with my own clients – they want me to be successful, but not too successful!”