March 18, 2013

LPL’s Latest Shot in Tech ‘Arms Race’: Naming Ex-IT Exec to Board

Former Xerox CEO Anne Mulcahy should join the IBD as a board member in May

LPL Financial (LPLA) said Monday that Anne Mulcahy (left), a former chairwoman and CEO of Xerox (XRX), will join its board of directors, pending stockholder approval, in May. Mulcahy will also serve on the board’s audit committee.

"We're delighted to welcome Anne to our board of directors, and we look forward to having an independent director with her stature and experience strengthen our board and broaden our perspective on management and leadership," said LPL Financial Chairman and CEO Mark Casady, in a press release.

Several experts are wowed by Mulcahy’s new role at LPL, which comes three months after the independent broker-dealer hired ex-Dell executive Victor Fetter as its chief information officer and made Fetter managing director of its Business Technology Services business unit.

“Anne Mulcahy brings so much to LPL's board, including technology prowess, large-company managerial experience and public company governance experience,” said Chip Roame, managing partner of Tiburon Strategic Advisors, in an interview with AdvisorOne.com. “This is a great addition.”

Mulcahy was CEO of Xerox from 2001 to 2009 and chairwoman of the company from 2002 to 2010. She is currently a board director of Johnson & Johnson, Target and the Washington Post Co. She is also chair of the board of trustees for Save the Children.

"I was immediately drawn to this opportunity with LPL Financial, because the company is a true industry innovator with all of the attributes necessary to continue to grow and redefine the financial services space," said Mulcahy, in a statement.

The addition of a former IT executive shows that LPL clearly knows the importance of technology in the business, says executive-search consultant Mark Elzweig.

“A board appointment like this shows that LPL is willing to do what it can to ensure that its IT capabilities are first rate,” Elzweig said in an interview. “The fact that they're a public company and one of the largest players in the independent space gives them the heft to do so.”

Technology is becoming a key point of differentiation in the advisor business, he notes. “There's something of an arms race going on as firms roll out their next generation offerings.”

But at least one expert believes that hiring an ex-Xerox leader isn’t necessarily good for LPL’s IT strategy and focus.

“LPL has been committing capital to key technology positions of late but I’m not sure if a former chairman of Xerox would reflect a strong positive—when you consider that Xerox is a shell of their former self, failing to capitalize on technologies that companies like Apple profited from,” said the recruiter Jon Henschen in an interview.

Still, LPL’s success at adding advisors, acquiring firms and improving its IT platform has produced very powerful results of late, according to Roame, which (hopefully) Mulcahy can help the firm further capitalize on.

“The evolution of LPL is amazingly impressive," he said. "A decade ago, almost all IBDs were small-siloed private firms which lagged behind industry trends and never led much of anything. LPL has transformed itself into a multichannel, successful, leading-edge firm under the direction of Mark Casady.”

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