March 31, 2003

A New Hand on the Tiller at LPL

New LPL President Mark Casady promises more tech i

Mark Casady has been named president of Linsco/Private Ledger (LPL) Financial Services, the independent broker/dealer based in San Diego. Casady, who remains COO, succeeds David Butterfield, the former president, who has assumed the title of vice chairman.

"The transition of titles is just validating the day-to-day work that had already been going on," Casady says. Since joining LPL nine months ago from Scudder Investments, Casady says his "life has been about making sure [LPL] has the service levels, research, and technology projects underway; it's really been [about]... managing the company day in and day out."

Casady, who works out of LPL's Boston office, says he decided to join LPL because it provides a "platform of unbiased advice and no proprietary products." LPL's reps have the advantage of providing "unbiased investment advice," he says, "and no matter how you look at it, given the scandals on Wall Street and mistrust of investment advice generally speaking, unbiased advice is a very real value proposition to clients."

To enhance its advice capabilities, LPL has been adding research analysts and its scope of research. "We now have 18 analysts, and have research on variable annuities and a whole range of fixed-income issues that we didn't have a year ago," Casady says. "We're going to continue to round out our investment research, and will go broader and deeper."

LPL also pulled in 525 new reps last year, which Casady characterized as "significant growth." LPL started 2002 with 3,900 reps and ended the year with around 4,400. Most of the new recruits came from independent broker/dealers that sold out to larger financial services firms, as well as from the big Wall Street firms, he says. Reps are leaving their B/Ds that have been acquired by bigger firms, he says, because the firms "aren't providing the service or technology investment they should. So reps feel their business is slipping as a result." As for why brokers would abandon Wall Street firms, Casady says some of the firms' brands have been tarnished. "Brands that used to help support the rep's business isn't there anymore."

Nearly four years into a bear market, Casady says some independent B/Ds are "really investing in their business and are able to handle all the new recordkeeping requirements from the government. But there are those that are cutting back services and cutting back on technology." LPL's strategy, he says, "has been to continue to build very aggressively our technology advantage, and it's paying off. We're seeing it in recruiting and growth in the business."

New technology initiatives include the LPL Organizer, which will be released to reps later this year. The technology "will allow us to automate the notification process to the reps of any exceptions," Casady says. For instance, "if there's a missing piece of paperwork or a corporate action that needs a decision, in the past, you either had to call or fax the rep, but the new technology will act as an early warning device," he says. "What that means is that the rep can sign on every day and get a notice about all the things that are outstanding and then they can work on them online." This is just one example of technology that LPL will be offering to save reps time and allow them "to focus on building their business."

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