February 10, 2012

LPL-AXA Extend Clearing Deal

The independent broker-dealer retains a key client in the custom-clearing space

LPL Financial (LPLA) said Wednesday that it had extended its clearing and custody deal with AXA Advisors, which as more than 5,000 advisors in some 145 offices. The deal began in 2007.  

"We are delighted AXA Advisors has decided to extend their clearing relationship with our firm," said David Akellian, head of Custom Clearing Services for LPL Financial, in a statement.

"Since deciding to use LPL five years ago, our two organizations have worked in partnership to grow the AXA Advisors investment business,” added Akellian, who joined LPL in June 2011 from Stifel Nicholaus’ unit Century Securities Associates, after stints at Merrill Lynch and Pershing.

When Akellian came on board, LPL said it was working with multiple clients, including seven insurance companies and 4,000 of their advisors.

"AXA Advisors' broker dealer platform is a critical component of our retail distribution business," said Christine Nigro, president of AXA Advisors, in a press release. "This renewal is a natural extension of our ongoing efforts to provide clients with an innovative and robust investment platform."

Industry experts note that clearing work can help LPL strengthen its long-term financial results by diversifying its revenues, which it has done not only in clearing, but also in bank distribution and the retirement-plan business, they note.

"This is important business for LPL ... and suggests that they are a successful business-to-business player," said Chip Roame (left), head of Tiburon Strategic Advisors, in an interview. "They have the capacity not only to serve individual reps, who have limited power to make demands of LPL, but also have the ability to satisfy a larger institutional player that will have its own demands."

LPL Financial, which has about 12,800 financial advisors affiliated with its independent broker-dealer operations and some 730 financial institutions as clients nationwide. It reported fourth-quarter earnings late Tuesday that beat last year’s results but missed analysts’ expectations. Profits were $39.4 million, while sales totaled close to $829 million.

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