LPL Financial announced July 15 that it was moving the 1,700 representatives from Mutual Service Corp., Associated Securities, and Waterstone Financial Group from the Pershing clearing platform onto LPL's own platform. Bill Dwyer, president, national sales and marketing for LPL Financial, the largest independent broker/dealer, said the move came as the final piece in the firm's strategic review for 2009. That review has included moves to "streamline our operations, remove complexity, and eliminate duplicative efforts," Dwyer said. The decision to integrate the three B/Ds was occasioned, he said, by visits of many reps to LPL's San Diego home office–representing about 40% of the production of those B/Ds–who came to see the benefits of LPL's scale, and led LPL management to ask "Why not put these firms together? We can afford to make a substantial investment on the platform," as Dwyer recalls the discussion, and "we won't be supporting multiple platforms."
However, Dwyer was quick to express respect for Pershing, saying "we've always had a great relationship" with the clearing firm, pointed out that another relatively recent broker/dealer acquisition of LPL's, Uvest Financial, will continue to clear through Pershing, and that "roughly 65% of the client accounts that we have will remain at Pershing."
The three broker/dealers were acquired by LPL from Pacific Life in spring 2007. At the time the three had 2,200 reps and revenue of $353 million, and Dwyer said then that allowing those firms to continue to clear through Pershing would help LPL retain reps. Uvest, which focuses on providing brokerage services to the regional and community bank and credit union markets, was acquired in August 2006.
Dwyer said that advisors from the three B/Ds would receive official word of the shift on July 16 via a "robust welcome package," and while he acknowledged that the change would be difficult for some, "our goal is to retain as many advisors as possible," and that he expected that "the lion's share will move."