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Posts Tagged LPL Financial

LPL Financial Tries a New Approach – Aims to Reboot in Wake of Fast-Paced Expansion

WSJ article by Corrie Driebusch

Mark Casady has a new, self-imposed, “two-hour” rule.

It dictates that the chief executive of LPL Financial Holdings Inc. must respond to any email from one of the firm’s 13,400 financial advisers within two hours, even on weekends and holidays.

“If they’re reaching out to me, it’s important,” Mr. Casady said. “I want advisers to feel comfortable raising those issues.”

lplLPL Financial could be a case study in the perils of fast-paced expansion. CEO Mark Casady is rolling out a new technology platform.

It is one piece of a much larger effort Mr. Casady is making to redeem LPL after a rocky few years that were capped in May by a $7.5 million fine levied on the firm by regulators who cited “systemic” failures in its email system tied to mismanaged growth, the largest-ever such fine. The fine came as LPL already was trying to quell a chorus of complaints about outdated technology and poor communication from the firm’s legions of advisers. Those advisers are independent but pay to use LPL’s software for clearing trades and for services such as support in marketing and regulatory compliance.

While hardly a household name, LPL is the fourth-largest brokerage in the U.S. based on the number of advisers in its network. The growth has enabled the Boston firm to present a challenge to larger, traditional brokerage firms such as Morgan Stanley, MS the largest brokerage, and Merrill Lynch & Co., owned by Bank of America Corp.

Mr. Casady, who became CEO in 2005, has overhauled the company’s management ranks. LPL now is rolling out a new technology platform that Mr. Casady said will address many adviser complaints. He also is dialing in to more town-hall calls with advisers, many of whom said LPL did a poor job listening to their grievances in the past. He said also he is in better contact with regulators.

“We were focused on scale and scope, and we realized we created a lot of complexity and we didn’t spend as much time on relationship management,” Mr. Casady said. “What’s really changed is the way we’re approaching problems. We get we’re not perfect. We’re going to embrace that feedback and work through anything that gets back to us.”

If Mr. Casady succeeds, it could only add to the problems of traditional brokerages, which have been steadily losing market share as some in their ranks break away to start up their own practices. LPL and others like it are consistently attracting some of that talent.

LPL may be a case study in the perils of fast-paced expansion. From mid-2010 to June 30, the firm added more than 1,000 advisers. As the firm expanded, it did so without accompanying improvements in its compliance and technology infrastructure, regulators said.

LPL was formed in 1989 through the merger of Linsco Financial Group Inc. and Private Ledger Financial Services Inc., but its growth really took off after the financial crisis in 2008. Many brokers fled the larger firms, seeking the independence, and added income, they could get by linking up with a company like LPL. Brokers at LPL get to keep as much as 90% of commissions on trades, before costs such as rent and salaries for support staff, compared with about 45% at bigger brokerage firms, where rent and support is included.

The company went public in 2010, earning a stock-market valuation of $3.2 billion. Since then, its shares have risen 28%, including a 37% gain this year. Its market value now is about $4.1 billion.

But brokers complained management was unavailable and LPL’s technology was behind competitors. For example, investors couldn’t view their balances on mobile applications, and advisers said executing trades across multiple client accounts was inefficient and clunky.

“Before, I was an externally focused CEO, doing acquisitions, focused on getting us public,” Mr. Casady said. “We weren’t as attentive as we could be.”

In 2011, LPL was at a “cultural low,” said Ron Carson, whose Nebraska-based Carson Wealth Management Group is LPL’s biggest affiliate, with more than $3.5 billion in client assets, according to Barron’s. Mr. Carson, who has been affiliated with LPL since 1989, said his complaints about technology problems were ignored. He even threatened to leave the brokerage, he said.

But Mr. Carson said he has noticed some changes recently. “Management is now listening, and we’re seeing real tangible results,” referring to a recent technology upgrade that enables clients to access statement information and investment positions on mobile devices, as well as an enhanced trading platform and e-signature technology, among other improvements.

Mr. Casady said LPL’s advisers may have felt the changes were too slow but said the needed fixes took time. “You can’t measure it in weeks,” he said.

In May, securities regulators criticized the brokerage for failures in its email record-keeping system that the Financial Industry Regulatory Authority, Wall Street’s self-funded regulator, tied to mismanaged growth.

“In this complex environment you can have growth but it needs to be controlled,” Mr. Casady said. “Finra’s right criticism was that we had growth but not in a controlled fashion.”

LPL’s annual conference last month was a cathartic event for advisers and the firm’s executives. Some 3,000 brokers showed up to the four-day gathering in San Diego.

There, LPL executives, including Mr. Casady, as well as technology chief Victor Fetter and chief marketing officer Joan Khoury, used speeches to show brokers how much LPL had changed.

During Mr. Fetter’s presentation, a complaint from North Carolina-based adviser James Wilkie—”It’s consistently inconsistent”—was splashed across a giant screen. Mr. Fetter promised that he and his team were listening.

“We have made 300 changes to the core platform,” Mr. Fetter said, adding the firm will make 300 more improvements before year-end.

“We’ve heard a lot of promises in the past,” Mr. Wilkie said. “These are some pretty aggressive initiatives we have, but overall, I’m optimistic.”

Source:  online.wsj.com

Posted by Steven Maimes, The Trust Advisor

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LPL Financial Launches Retirement Partners Group

- New Group Provides Exceptional Support for Advisors and their Retirement Plan Sponsor Clients -
- Identifies and Differentiates Top-Tier Retirement Plan Advisors and Highlights Commitment of LPL Financial to Retirement Advisory Leadership -

LPL (2)LPL Financial LLC — the nation’s largest independent broker-dealer, a leading RIA custodian, institutional service provider and a wholly owned subsidiary of LPL Financial Holdings Inc. announced the launch of the Retirement Partners Group (RPG), an exclusive network of highly experienced LPL Financial-affiliated advisors who focus primarily on advising retirement plans for small to large companies. Only a small percentage of LPL Financial advisors are qualified for membership in this elite group.

RPG was conceived and launched by LPL Financial Retirement Partners, the retirement plan-focused division of LPL Financial.  Membership in RPG identifies advisors who have demonstrated significant achievement within the retirement plan arena and will provide them and their clients with resources and strategies for the ever more complex field of retirement plans.

RPG members will benefit from a comprehensive branding and marketing effort to differentiate them from the majority of financial advisors. The program will convey a unifying, prestigious national identity while allowing RPG advisors to continue to enjoy the distinction of their association with LPL Financial.  Membership in RPG will also provide networking access to other top LPL Financial retirement plan advisors, enabling group members to share expertise and referrals and to strengthen their industry relationships.

Bill Chetney, Executive Vice President of LPL Financial Retirement Partners, said, “Through its considerable investments in this arena, LPL Financial has demonstrated a firm commitment to be a leader in the growing and increasingly important retirement plan segment of the independent financial advisory industry. The establishment of the Retirement Partners Group will help broaden familiarity with LPL Financial as a major participant in this industry and as the home of many of its most accomplished practitioners.

“The Retirement Partners Group sets a lofty standard for retirement advisory expertise and service excellence.  We believe it will be an inspiration for all our advisors, both within the retirement plan sector and for all LPL Financial advisors in general,” he said.

Kathleen A. Kelly, Managing Partner of Compass Financial Partners, LLC, of Greensboro, NC, said, “I am thrilled to be a member of the Retirement Partners Group and with the marketplace recognition such membership will bring.  LPL Financial has done a tremendous job of providing my firm with excellent resources and support, and I anticipate that the Retirement Partners Group will take this support to an exciting new level.”

To gain entry into RPG, among their qualifications financial advisors must be recognized leaders in the retirement plan industry, with at least 10 years of experience and hold approved industry professional designations. In total, the inaugural class of RPG’s 87 members currently represents approximately 4,000 total plans with nearly $40 billion in plan assets.

About LPL Financial

LPL Financial, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2012), a top RIA custodian, and a leading independent consultant to retirement plans. For more information, please visit www.lpl.com.

Source: investor.lpl.com 

Posted by Steven Maimes, The Trust Advisor

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LPL Financial’s Third-Quarter Profit Declines

Independent brokerage LPL Financial Holdings Inc’s third-quarter profit fell 5.8 percent as investor uncertainty about market conditions weighed on adviser productivity.

Boston-based LPL said net income fell to $34.3 million, or 31 cents a share, for the quarter ended Sept. 30, down from $36.4 million, or 32 cents a share, a year earlier.

Excluding certain charges and other expenses, LPL earned 47 cents a share, beating analyst expectations by that measure. Analysts on average had forecast earnings of 44 cents per share, according to Thomson Reuters.

LPL’s net revenue for the quarter rose 2.8 percent from a year earlier to $907.2 million, above analysts’ expectations of $899.6 million.

Commission revenue in the quarter rose 0.9 percent from the year-ago period.

The company declared a quarterly dividend of 12 cents per share to be paid on Nov 30.

During the third quarter, LPL lost 15 advisers driven by the loss of a bank program, bringing the headcount to 13,170.

Client assets in fee-based advisory programs rose 23.2 percent to $118.6 billion, while overall client assets at the brokerage rose 17.4 percent to $371.4 billion.

LPL sells technology, clearing and other services to self-employed brokers, who keep the bulk of the fees and commissions they generate but pay their own overhead expenses.

The firm has expanded by adding several big teams to its network of independent advisors, including at least five teams in the past quarter that managed $4.7 billion in client assets, based on moves tracked by Reuters. Those teams joined the firm in Alabama, Iowa, Pennsylvania and California.

“Very experienced wirehouse advisers are exploring the movement to independence — those with a seasoned client base that no longer need the brand behind them,” Bill Morrissey, LPL’s executive vice president of business development, told Reuters in early October.

Morrissey said consolidation in the industry, as well as deteriorating margins at bigger firms and changes in the industry’s regulatory environment have acted as catalysts for adviser movement into the independent space.

Source:  Reuters

Posted by Steven Maimes, The Trust Advisor

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LPL Financial New Venture to Acquire Veritat Advisors

 – Acquisition to Enhance Technology Platform Offering for Personal Financial Advice Delivered to the Mass Market –
– LPL New Venture LLC Also Announces Name Change to “NestWise LLC” –

NestWise LLC (formerly known as LPL New Venture LLC )(“NestWise”), a recently formed subsidiary of LPL Financial Holdings Inc. designed to provide the mass market with access to high-quality and affordable personal financial advice, today announced its intent to acquire Veritat Advisors, Inc. (“Veritat”).

Veritat is a full-service registered investment advisory firm that leverages a proprietary online financial planning platform designed to support advisors who serve the mass market.  The company combines advanced technology systems with sensible, practical and customer-driven financial advice. Kent Smetters, PhD, a professor at the Wharton School at the University of Pennsylvania and a leading authority on financial planning, co-founded the company in 2008.

NestWise LLC was also announced as the new name for LPL New Venture LLC, reflecting the company’s focus on the recruitment and development of new-to-the-industry financial advisors committed to providing high-quality and affordable personal financial advice for the mass market.

Esther Stearns, CEO of NestWise, said, “NestWise and Veritat are a perfect fit and share a common vision and philosophy. This strategic acquisition will significantly enhance the technology capabilities of NestWise as we look to serve the mass market.  NestWise, which will operate as a registered investment advisory firm, will leverage both Veritat’s robust technology base and LPL Financial’s industry-recognized advisory platform and deep expertise in supporting independent advisors.”

Dr. Smetters said, “Veritat’s mission has been to deliver full-service and objective financial advice, and this makes our company a particularly strong fit with NestWise.  Our software solution offers the flexibility to support the unique needs and financial goals of the mass market, while driving efficiency and scale.”

While Dr. Smetters plans to resume his career at Wharton full-time following the completion of the transaction, he has agreed to continue his support of Veritat by serving as a consultant to NestWise.

The transaction is expected to close during the third quarter of 2012.  Financial terms of the transaction were not disclosed.

About NestWise
NestWise, a wholly-owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), will support the recruitment and development of new-to-the-industry financial advisors dedicated to serving the mass market under the fee-based, independent model.  The company was created to address the compelling and largely unmet need for access to high-quality, affordable personal financial advice for the mass market.  NestWise is scheduled to launch later in 2012.

Source:  LPL Financial

Posted by Steven Maimes, The Trust Advisor

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LPL Financial Announces Appointment of Bethany Bryant as President of The Private Trust Company

LPL Financial LLC, the nation’s largest independent broker-dealer and a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), announced that the directors of PTC Holdings, Inc. appointed Bethany J. Bryant as president of its subsidiary The Private Trust Company, N.A. (“PTC”), as of May 1, 2012. 

PTC was founded in 1995 and is licensed to provide trust services in all 50 states under its national banking charter.  As a leading provider of trust administrative services for individual and family assets, PTC uses a unique open-architecture approach that delegates investment management to financial advisors, who are in turn able to offer personalized and sophisticated trustee services to high-net-worth clients for a variety of estate planning needs.

Ms. Bryant was one of three original founders of The Private Trust Company.  Since that time she has served as CFO and operating officer for PTC, with responsibility for managing the firm’s accounting, operations, compliance, and information technology functions along with managing some of the firm’s largest client relationships.  As part of a long-term succession plan first approved in 2009, Ms. Bryant succeeds Lawrence Hatch in the role of president.

Robert Moore, president, chief operating officer and CFO of LPL Financial, said, “Bethany has been an invaluable leader at The Private Trust Company for many years, and this recognition is well deserved.  Given the increasing importance of the high-net-worth market for LPL Financial, we have high hopes for the future under the direction of Bethany and PTC’s board of directors.”

Heather Ettinger, managing partner of Fairport Asset Management and member of The Private Trust Company’s board of directors, added, “For nearly two decades Bethany has provided the broadest possible spectrum of support for PTC, and has served the firm’s clients with the highest degree of integrity and focus.  The Board is very pleased to have her at the helm as we work to uphold this record of success and excellence.  We would also like to recognize Larry’s many contributions to the organization over the last 18 years, and we wish him the best in his future endeavors.”

Prior to her time at PTC, Ms. Bryant began her career as an independent auditor with Ernst & Young LLP, specializing in audits of financial institutions.  Ms. Bryant is a certified public accountant and a certified securities operations professional.

About The Private Trust Company

The Private Trust Company, N.A., (PTC), an affiliate of LPL Financial, is a leading provider of trust administrative services for individual and family assets.  PTC uses a unique open-architecture approach that delegates investment management to financial advisors, who are in turn able to offer personalized and sophisticated trustee services to high-net-worth clients for a variety of estate planning needs.

Licensed in all 50 states under its 1995 national banking charter, PTC specializes solely in providing fiduciary services and does not engage in any lending or deposit taking.  PTC is regulated and examined by the Office of the Comptroller of Currency, a division of the U.S. Treasury Department, and is a member of the Federal Reserve Bank.  Accounts are insured and bonded to protect client assets and are reviewed by independent auditors.  For more information, please visit www.theprivatetrustcompany.com.

About LPL Financial

LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans.  LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to over 12,900 financial advisors and approximately 680 financial institutions. In addition, LPL Financial supports over 4,400 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have approximately 2,700 employees with headquarters in Boston, Charlotte, and San Diego.  For more information, please visit www.lpl.com.

Source:  Reuters

Posted by Steven Maimes, The Trust Advisor

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LPL Financial Names Joan Khoury Managing Director and Chief Marketing Officer

LPL Financial LLC, the nation’s largest independent broker-dealer* and a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), today announced that Joan Khoury has been named managing director and chief marketing officer, effective immediately.  She will be based in San Diego, and will report to Robert Moore, chief financial officer at LPL Financial.

Joan Khoury

In her new role, Ms. Khoury will be responsible for driving the company’s overall marketing strategy, as well as executing programs that will promote profitable growth and innovation, and broaden the strategic reach of LPL Financial.  She will oversee all marketing initiatives across the organization – including marketing and brand strategy, advertising, corporate identity, public relations, customer communications, and field marketing – and will also manage its market research and analysis, marketing regulatory review, and business development advertising functions.

Joan Khoury brings more than two decades of financial services experience to her new role.  Prior to joining LPL Financial, Ms. Khoury was senior vice president, strategic marketing at Merrill Lynch, where she led a 90-member marketing organization and developed a range of innovative marketing programs in support of the firm’s wealth management business.  For this work, Ms. Khoury and her team were recognized with numerous marketing awards, including being named Brokerage Category Winner for Media Strategy by The Journal of Financial Advertising & Marketing.

In earlier roles, Ms. Khoury was SVP, global head of marketing, for Wachovia, Evergreen Investments; managing director and group head of the global marketing division for Bank of New York Mellon; and VP, marketing manager, for Bank of America.  She began her professional career managing marketing and communications for United Way in Macon, Georgia.

Mr. Moore said, “We are very pleased to welcome Joan Khoury to LPL Financial.  Her experience in creating innovative marketing strategies and brand campaigns will be instrumental to our efforts to connect with current and future advisors and institutions.  We are particularly excited to leverage Joan’s deep experience empowering advisors to define their value proposition to support our customers’ efforts to build and strengthen client relationships and to grow their business.”

About LPL Financial

LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans.  LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to more than 12,800 financial advisors and approximately 670 financial institutions. In addition, LPL Financial supports over 4,000 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have more than 2,700 employees with headquarters in Boston, Charlotte, and San Diego.  For more information, please visit www.lpl.com.

Source:  PRNewswire

Posted by Steven Maimes, The Trust Advisor.

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Why Did LPL Financial Acquire Fortigent?

When the biggest independent broker-dealer bought Fortigent, industry gurus heralded the deal as a game changer for advisors everywhere. Here’s why.

Many commentators have described LPL’s purchase of investment management outsourcing firm Fortigent as a straightforward bid to muscle into the high-net-worth market.

After all, some of America’s biggest advisory firms rely on Fortigent to help them run about $50 billion in client accounts.

But while Reuters was quick to characterize this deal as a naked grab for “higher-end clients,” it’s lot more strategic than bolting on high-quality assets.

Remember, LPL is best known as a commission shop, but it’s already an unheralded but unarguably massive player in the RIA space as well.

Their nearly 13,000 advisors have accumulated $96 billion in fee-based AUM. That’s more than the top 20 fee-only advisory firms in the RIA Database, put together.

Dig down, and it’s less about the assets than the architecture. And the writing’s been on the wall for months.

All the keys to the open architecture platform 

When we first heard about the Fortigent deal, we thought back to April, when LPL paid $20 million for relatively obscure software provider Concord Wealth Management.

Concord’s technology helps financial firms that use the “overlay” approach manage their relationships with third-party investment managers.

The outside managers pick the securities, the client-facing advisors pick the managers and software like Concord’s keeps everything straight.

And as it happens, Fortigent picks the managers — or at least does the research and makes recommendations on who’s good and who’s not worth bothering with.

Now that LPL owns both companies, it has all the pieces it needs to offer affiliated advisors a true “outsourced” asset protection platform even though all the important functions can be handled in house.

Concord provides the back office support from proposal to billing. Fortigent can populate the platform with its universe of pre-approved managers.

And in theory, LPL reps can spend a lot less time building client portfolios themselves — and a lot more time keeping existing clients happy while prospecting for new business.

“LPL is now unique as an outsource organization,” Aite Group analyst Sophie Schmitt told me back when the Concord deal closed.

Now, LPL is obviously capitalizing on what she calls “intense interest in open architecture solutions.”

“This creates plenty of new expansion opportunities,” she explains.

This might be why Ron Carson, LPL’s top producer, recently brought his $3 billion in client assets back to the firm after leaving back in May.

Carson left because he wanted to run his own fund. A fully integrated overlay system can give him the next best thing by letting him distribute his “model” portfolios to every other advisor out there.

When he came back to LPL a few weeks ago, he said the firm was working on “one of the most exciting technologies I’ve anticipated in a long time.”

A completely in-house open architecture platform definitely seems to fit that bill.

Custody is part of the equation

LPL can also package Fortigent’s manager research to sell back to Concord’s bank-and-trust-heavy clientele.

At the time, LPL raised eyebrows by touting Concord as its toehold in the personal trust custody space, but the synergies weren’t obvious.

LPL is already a major player in bank-resident brokerage services through its UVEST subsidiary, which runs the investment programs for 300 banks and credit unions and supports about 2,300 advisors.

With Fortigent’s managers on the table, these institutions can now outsource their entire investment operation — including the trust portfolios — to LPL and its affiliates.

That’s a sales pitch that cost-conscious bankers are going to be a lot more eager to listen to, especially if it means more time for their in-house personnel to court new accounts.

“It’s obviously very beneficial from a cost savings perspective,” Schmitt says.

Since Fortigent supports unified managed account (UMA) structures and various alternative asset classes, it seems a natural fit as an outsourced solution for trust portfolios in particular.

With a UMA structure, the introducing institution never gives up custody of the underlying assets, but instead simply imports and “overlays” the third-party models to determine how to invest its clients’ wealth.

This overcomes some of the traditional stumbling blocks of separately managed account (SMA) approaches in the trust space.

Meanwhile, the asset-class-neutral UMA structure ensures that real estate, private equity and any other “legacy” alternative assets held in trust can coexist with stocks, bonds, mutual funds and anything else the investment managers and grantors desire.

Which overlay provider is next?

With all these opportunities opening up, LPL executives may not even feel the need to expand much into the high-net-worth advisory market in the near term.

After all, that’s what its independent reps are for. And the banking opportunities look even more seductive — if you connect all the dots.

The question is really how much LPL paid for Fortigent. We’ll find that out in a few months when the company reports its next quarterly numbers.

But if the $10 billion on Concord’s platform brought a price of $20 million, Fortigent  — which runs five times that much money — may have cost at least as much.

Will other overlay vendors become takeover targets? We’ve been covering this space for awhile, so you can get a sense of some of the players here.

Scott Martin, senior editor, The Trust Advisor. Steve Maimes and Jerry Cooper contributed to the research.

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LPL Financial to Acquire Fortigent, LLC

– Acquisition to Expand LPL Financial Presence and Offerings in RIA and High-Net-Worth Market
– Fortigent to Retain Brand, Focus, and Management Team 

LPL Financial LLC (“LPL Financial”), a leading custodian and the nation’s largest independent broker-dealer*, today announced the intent of its parent company to acquire Fortigent, LLC (“Fortigent”), a leading provider of high-net-worth solutions and consulting services to RIAs, banks, and trust companies. LPL Financial is a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA).

Upon completion of this transaction, Fortigent will remain solely focused on supporting sophisticated practices and those serving high-net-worth clients. Fortigent will retain its brand, its existing management team and its Rockville, MD, headquarters. Andrew Putterman will continue to lead Fortigent, reporting directly to Robert Moore, chief financial officer of LPL Financial.

“We are delighted to bring together two organizations that share similar cultures, including a legacy of independence and a commitment to offering advisors the most robust, open-architecture platform for serving their clients’ needs,” said Mr. Moore. “Building upon our growing success with RIAs and high-net-worth advisors, this acquisition will combine LPL Financial’s scale and experience in helping advisors manage the complexity and growth of their practices with Fortigent’s robust platform of research, reporting and alternative investment solutions for RIAs and ultra high-net-worth advisors while creating an unmatched offering in the marketplace.”

“Fortigent has taken a bold step for its future. This acquisition will create new possibilities for speeding up the evolution of the Fortigent platform and expanding the ways in which we can fuel advisors’ success in our distinct market space,” said Mr. Putterman. “Fortigent will remain focused on serving the unique needs of successful high-net-worth advisors, and LPL Financial’s resources, scale, and expertise will provide Fortigent with an even stronger foundation to support the kind of innovation and enhanced client service that will empower our advisors to meet and exceed client expectations at the highest level.”

The transaction is expected to close in the first quarter of 2012, subject to customary closing conditions. Financial terms of the transaction were not disclosed.

For this transaction, Silver Lane Advisors LLC served as financial advisor to Fortigent, with Patton Boggs LLP as legal advisor to the company.

Optima Group, Inc., served as financial advisor to LPL Financial, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal advisor for this transaction to the company.

About LPL Financial

LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans. LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to approximately 12,800 financial advisors and approximately 730 financial institutions nationwide. In addition, LPL Financialsupports over 4,000 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms, and technology solutions. LPL Financial and its affiliates have approximately 2,700 employees with headquarters in Boston, Charlotte, and San Diego. For more information, visit www.lpl.com.

Securities offered through LPL Financial, Member FINRA/SIPC.

About Fortigent

Fortigent, LLC, delivers a fully integrated and customizable business-to-business outsourced wealth management solution to banks, trust companies, and independent advisory firms. Services include an “open architecture” investment platform with particular expertise in alternative investments, a flexible unified managed account program, and consolidated wealth reporting. Fortigent’s web-based portal interface allows access to proposal and rebalancing tools, client portfolio reporting and accounting, as well as industry articles, research papers, and other practice management and business development resources. For more information, visit www.Fortigent.com.

Source: LPL Financial

Posted by Steven Maimes, The Trust Advisor.

Permalink:   http://thetrustadvisor.com/headlines/lpl-financial-fortigent

[stextbox id="info"]Related from LPL Financial: Outlook 2012 (PDF report)[/stextbox]


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LPL Financial Adds 500 Advisers, Closing in on 13,000

For the second year in a row, LPL Financial said it had added 500 net new advisers. That brings it close to crossing 13,000 in the total number of affiliates for a company chief executive Mark Casady calls an “outsourcing agent” for financial advisers.

LPL Financial provides an integrated platform of technology, brokerage and investment advisory services to independent financial advisors and financial advisors at regional and community banks and credit unions across the country.

When it went public in November of last year, LPL said it planned to add about 400 net new advisers a year, according to Casady.

Last year, it achieved that by adding 288 advisers organically, the company said in its annual report for the year, and adding 206 from the acquisition of National Retirement Partners, in December. That brought the 2010 total of net new advisors to 494. That put the year-end overall total at 12,444.

In a presentation Wednesday at the Nasdaq OMX Investor Program held in London in conjunction with Morgan Stanley, Casady said the company had added more than 500 net new advisers in 2011.

That was through the end of September, suggesting that the firm may already have crossed the 13,000 mark, in its universe of advisers.

The company had 7,006 advisers at the end of 2006. A series of broker-dealer acquisitions pushed that to 11,089 at the end of 2007. Casady said the 500 additions puts LPL “at number two” in the industry in 2011, behind Merrill Lynch. Last month, Bank of America said its “financial solutions” business had reached its goal of adding 1,000 advisers this year.

The additions of the new advisers, though, preceded LPL’s announcement that it was raising fees it charges to advisers for the services it provides.

“We just announced a couple of fee changes recently, one where we’re cutting charges for transactions and equities in our advisory business, from $15 down to $9,’’ Casady said. That cut in the transaction fee should lead to a “nice increase in volume,’’ he said, which would benefit advisers and “overwhelm the cut in fees.”

Meanwhile, he acknowledged the company is raising standing fees it charges to advisers, by about $1,000 a year. The increases, he noted, included hikes in affiliation fees as well as errors & omissions insurance.

The fee changes, which take effect on the first of the year, include:

  • Affiliation fees. An increase from $125 a month to $175 month, for adviser in branches with four or fewer advisers. In offices with five to 11 advisors, a fee of $600 a month is being replaced by a fee of $125 an advisor. In branches of a dozen or more advisors, the fee increases from $50 a month per head to $100.
  • Errors & omissions insurance. This will increase to $2,750 a year per adviser, from $2,500.
  • Compliance fee. Up $200, to $600 a year.
  • Outside business activity fee. Up $100, to $600 a year.

“Importantly, we’re able to raise fees on our advisers about $1,000 per adviser for the entire system,’’ Casady said at the London investor program. “So, roughly 13,000 people have seen essentially an inflationary increase that’s come as a result of our examination of our costs and the need to charge a bit more in a number of areas, like affiliation fees, E&O insurance, in areas where we see costs going up.’’

Taking in $1,000 more from each of 13,000 advisers represents a boost of $13.0 million next year to LPL’s annual revenue. For the nine months ending September 30, 2011, the company reported net revenue of $2.7 billion.

Source: americanbanker.com

Posted by Steven Maimes, The Trust Advisor.

Permalink:  http://thetrustadvisor.com/headlines/lpl

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