Is the Nicholas Schorsch-led RCAP a serious competitor to LPL in the IBD world? In a far-reaching article by Investment News’ Bruce Kelley, the comparisons between the two firms are compelling — although Schorsch claims, “We're not trying to be a better version of LPL. We're trying to be a different business.”
When its pending acquisitions are completed, RCAP will have 8,900 reps, $1.7 billion in revenue and $202 billion AUM. LPL currently has 13,600 reps, $4.05 billion in revenue and $438 billion in AUM.
Other than size, one big difference between the two firms is that RCAP also wholesales product — $14.8 billion of non-traded REITs from 2007-2013, and currently offering another $22.7 billion. RCAP currently meets with 1,400 advisors weekly.
LPL was put together via a series of organic acquisitions going back to 2005, digesting each acquisition one at a time, including the famous NRP purchase. On the other hand, RCAP is trying to bring independent fiefdoms together rapidly. In their S1 filing, RCAP is claiming that they will save $57-$65 million in costs in the first year.
Meanwhile, 2013 was a banner year for IBDs, which enjoyed double digit growth in revenue following a weak 2012, spurred by the booming market and, you guessed it, non-traded REITs.
