I’ve covered enough advisor transitions over the years to recognize a pattern. The story usually goes like this: seasoned advisor in their sixties sells to a larger firm, cashes out, and starts planning their retirement. That’s the playbook most people expect in wealth management.
But Strategic Retirement Plans just tore up that playbook entirely. When the Billings, Montana-based firm left Commonwealth Financial Network for Merit Financial Advisors last week, it brought nearly $577 million in assets under management and an unusual twist. The team driving this move is mostly in their thirties and early forties. Retirement isn’t even on their radar.
Alex Hansen, chief advisor success officer at Merit Financial Advisors, told me this challenges a deep-seated misconception. “It bucks the perception that the only people who explore a sale transaction are people who are kind of past that growth-mode phase, like they’re kind of taking chips off the table,” he explained. Hansen knows Commonwealth’s culture well, having worked there himself before joining Merit last year.
The founders of Strategic Retirement Plans, Gabe Lapito and Ryan Gomendi, started their firm as a Commonwealth affiliate nearly two decades ago. They were among hundreds of advisors who departed after LPL Financial announced plans to acquire Commonwealth just over a year ago. According to reports from Financial Planning and InvestmentNews, advisors cited everything from anxiety about joining a massive firm to frustration over how the sale unfolded.
Lapito’s reasoning was different and more forward-looking. He wanted a partner aligned with aggressive growth ambitions, not a comfortable place to coast. When Strategic Retirement Plans launched nineteen years ago, Commonwealth had around 500 advisors. By the time of the LPL sale, that number had swelled to roughly 3,000. Commonwealth and Strategic Retirement Plans essentially grew up together.
Now Lapito is betting on recreating that growth story with Merit. Founded in Alpharetta, Georgia, in 1998, Merit has steadily expanded to 60 offices across the country. Strategic Retirement Plans will add another location in Gillette, Wyoming. Merit’s roughly 150 advisors manage nearly $25 billion in client assets, according to company figures.
That makes Merit relatively small compared to LPL’s towering presence. LPL oversees more than 32,000 advisors and $2.3 trillion in client assets, based on the firm’s latest regulatory filings. But Lapito said size wasn’t the attraction. “I wouldn’t say I was necessarily running away from LPL as much as I was trying to find what I’ll call Commonwealth 2.0, which was with quality and community, a smaller group of advisors, a smaller set of people that had a similar vision,” he told me.
LPL did not respond to requests for comment. However, executives have previously stated confidence in retaining at least 90% of the $305 billion in client assets Commonwealth held at acquisition, according to statements reported by InvestmentNews.
Merit’s compensation structure reveals just how serious Strategic Retirement Plans is about growth. Unlike firms that buy advisors outright for cash, Merit offers deals partly structured as equity stakes. Lapito declined to share exact figures but confirmed that equity made up more than half of what Merit paid. That’s significant because accepting equity instead of cash signals confidence in the acquiring firm’s future success.
“Part of this concept of equity swap is that it’s not like you’re just selling out and leaving, like you’re 65 and ready to retire,” Lapito explained. “If I was ready to do that, I would take it in cash.”
Industry data backs up the logic behind growth-focused deals. Advisor Growth Strategies, a valuation consultant, reported last month that registered investment advisors with $500 million under management were selling for nine to fifteen times their EBITDA last year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. According to the report, firms commanding premium prices typically showed strong organic growth rates and growth-aligned structures.
Hansen told me Merit focuses particularly on assets acquired from new or existing clients rather than market-driven gains. Many firms have posted impressive asset growth simply because the stock market climbed steadily for over three years. Strip away market performance, and some firms actually lost more money than they brought in. “That’s why we’re looking under the hood,” Hansen said. “Is the business growing without markets? Are they bringing on more clients?”
This emphasis on organic growth matters because it reveals whether an advisor’s business model is truly sustainable. Federal Reserve data shows equity markets delivered exceptional returns from 2020 through 2023, lifting all boats regardless of advisor performance. Separating genuine client acquisition from passive market gains requires careful analysis.
Merit’s pitch centers on relieving advisors of routine operational burdens. Hansen believes the wealth management industry oversells independence. Advisors who leave established firms like Commonwealth often imagine shedding constraints that limited their business. Instead, they frequently discover that running their own practice consumes so much time on human resources, technology, marketing, and compliance that client work suffers.
“But a lot of advisors in the IBD channel, they get so busy with the HR and managing investments and interviewing people, and they’re doing compliance tasks, that their growth rate effectively stagnates,” Hansen said. Independent broker-dealers, where advisors work as independent contractors rather than employees, supposedly offer more autonomy. Hansen questions whether that autonomy is worth the administrative headaches.
Since Commonwealth’s sale to LPL was announced, independent broker-dealers like Raymond James, Kestra, and Cambridge Investment Research have recruited heavily from Commonwealth’s advisor base, according to industry tracking by Citywire RIA and Financial Advisor IQ. Lapito suspects many advisors simply feel comfortable moving between similar independent broker-dealer environments rather than transitioning to the registered investment advisor model.
He also suggested that some departing Commonwealth advisors have entered what he calls the “lifestyle” phase of their careers. They remain committed to excellent client service but prioritize maintaining existing relationships over aggressive growth. “But I’m in my early 40s, and I want to continue to serve new clients,” Lapito said. “I’m not ready to use the term ‘lifestyle practice’ yet. I mean, I live in Montana and Wyoming. So I certainly ski and fish and hunt and do all that stuff. I just tend to do it with my clients.”
Merit itself was affiliated with LPL as an office of supervisory jurisdiction until 2024. These large advisory practices handle compliance matters internally while operating under a broker-dealer’s umbrella. Much of Merit’s recent expansion has been fueled by a minority stake from private equity firm Constellation Wealth Partners, acquired last year according to reports in WealthManagement.com.
Private equity involvement in wealth management has grown substantially over the past decade. Data from consulting firm Echelon Partners shows private equity-backed deals accounted for more than half of all registered investment advisor transactions in recent years. These investors bring capital for acquisitions and operational improvements but also pressure for growth and eventual exits.
For Strategic Retirement Plans, the Merit partnership represents a calculated bet on scaling up. The firm manages retirement plan assets of $5.35 million under advisement in addition to its wealth management business. That dual focus on retirement plans and wealth management positions Strategic Retirement Plans to benefit from the massive intergenerational wealth transfer currently underway.
Cerulli Associates estimates that $84 trillion will change hands over the next two decades as Baby Boomers pass wealth to younger generations. Advisors who can serve both retirement plan participants and individual wealth management clients have natural advantages in capturing those assets. Strategic Retirement Plans’ relatively young advisor team should also find it easier to connect with younger inheritors.
The Commonwealth exodus continues reshaping the wealth management landscape more than a year after the LPL acquisition announcement. While LPL expressed confidence in retention, the steady stream of departures suggests significant cultural friction. Commonwealth built its reputation on a collaborative, advisor-friendly culture that some veterans worry could change under LPL’s larger, more centralized structure.
Hansen’s own career trajectory from Commonwealth employee to Merit executive mirrors this tension between size and culture. He left a position supporting registered investment advisors at Commonwealth specifically to join a smaller, growth-oriented firm. His ability to recruit former Commonwealth advisors like Lapito and Gomendi demonstrates the appeal of Merit’s model to at least some portion of Commonwealth’s former advisor base.
The Strategic Retirement Plans merger highlights a broader question facing wealth management. Is bigger always better, or do smaller firms offer competitive advantages that justify passing up the resources of industry giants? Lapito clearly believes smaller can be better, at least for advisors focused on growth rather than cruising toward retirement.
His comment about living in Montana and Wyoming while building a national practice captures something essential about modern wealth management. Geography matters less than it once did. Technology enables advisors to serve clients across the country while maintaining the personal relationships that remain central to the business. Strategic Retirement Plans can operate from Big Sky Country while competing with firms headquartered in major financial centers.
The equity-heavy compensation structure Lapito accepted also signals confidence in Merit’s growth trajectory. If Merit expands significantly over the next decade, that equity stake could prove far more valuable than an all-cash buyout today. But if Merit’s growth stalls or private equity investors push for changes that damage culture, Lapito and his partners could end up wishing they’d taken the cash.
That risk is part of what separates advisors in growth mode from those approaching retirement. Younger advisors can afford to bet on upside because they have time to recover if things don’t work out. Advisors nearing retirement typically prefer the certainty of cash to the potential of equity. Strategic Retirement Plans’ willingness to embrace equity reveals just how serious they are about building something bigger.
