Merit's $888 million Commonwealth hire was paid partly in equity

Merit Financial Advisors, which oversees almost $33 billion, has landed a Deerfield, Illinois team that managed $888 million at Commonwealth Financial Network, and the package included the item an advisor weighing the same move most needs to price: equity in the acquiring firm.

Founder and CEO Rick Kent and President Kay Lynn Mayhue confirmed the equity component in an interview with AdvisorHub, which first reported the hire; terms were not disclosed, and the deal closed September 10.

The team is led by Timothy M. Brennan, a 37-year industry veteran who spent the past 25 years at Commonwealth, where he co-founded a practice called Pinnacle Financial Group with James M. Santos, who continues to run the group at Commonwealth, according to the former firm's website. Brennan also closed the purchase of Financial Connections, a $57 million-asset practice in Fond du Lac, Wisconsin, in conjunction with the move, and is maintaining his brokerage registration through Purshe Kaplan Sterling Investments.

That registration is the quiet half of the package, because an aggregator arrangement that leaves commission business at a separate broker-dealer lets a team move its advisory assets without unwinding the transactional part of the book first; the coverage does not say how much of Brennan's $888 million runs through it. The structure suggests the pitch landing with independent broker-dealer teams is growth infrastructure rather than the payout grid, and Merit is testing that proposition at volume, with four more deals expected by the end of December.

Merit built its Illinois footprint on the same logic, opening its first office there in August 2024 around a $180 million Barrington practice and following with the acquisition of $1.2 billion Blueprint Wealth Advisors, which brought locations in downtown Chicago and Rockford. David Wahlen, who leads M&A at Merit, said some Blueprint advisors have known Brennan for years, and consolidation compounds: the Blueprint deal supplied the introduction for this one, and the team that came with the practice is the part every acquirer in this market actually needs to keep.

The supply side is a broker-dealer in transition: Commonwealth departures have continued since LPL Financial announced early last year that it would buy the firm, and Merit has scooped up a few Commonwealth teams following that announcement, according to the AdvisorHub report. Kent's read is cultural; the team came from a broker-dealer that had a really strong culture, he said, and found that here. Merit's own funding story is now familiar — Constellation Wealth Capital has backed the firm since last year, leadership and employees hold the majority, and the Brennan purchase leaned on a line of credit with Ares Management.

Equity is the right currency for an acquirer moving at this pace. For a seller it is also the one line in the package that cannot be priced at signing, because its value depends on a second exit that may be years off and on the platform still wanting the team when that exit arrives. The retention clause is now the real payout at aggregators, and equity in the buyer is that clause in a different form; on an illiquid private stake, an advisor who leaves would likely forfeit whatever has not yet paid out. That claim cuts thinner here, though. This is one team at an independent broker-dealer rather than a wirehouse liftout, and the coverage does not say how many advisors moved or how Merit split cash against equity. The four deals due by December will show whether equity is Merit's standing offer or this deal's particular accommodation.