Podcast Center
Video Center
Webcasts
Resource Center
Events
December 05, 2016 at 09:59 AM
LPL Financial’s Mark Casady will step down as CEO on Jan. 3, 2017, the firm said Monday.
Casady, 56, who has run the Boston-based independent broker-dealer for 10 years, will stay on as non-executive chairman through March 3.
President Dan Arnold will take over as CEO. Arnold has served as LPL’s president since March 2015, having joined the firm in 2007.
“The board extends its deep appreciation to Mark for his outstanding leadership and careful stewardship of the LPL mission over the past 14 years, and we wish him the very best in his retirement,” said Jim Putnam, the board’s lead director, in a statement. “In selecting Dan Arnold, the board has demonstrated its confidence in a proven senior leader who has played an integral role in creating a talent-rich organization that is gaining momentum within a promising business environment.”
Casady said in an interview with The Wall Street Journal on Monday that he felt it was the right time for a transition with big industry changes ahead, adding, “I had two choices: Retire now knowing you got a great leader in Dan in place or stay and see it through that phase.”
Industry watchers and recruiters gave differing views on the significance of the move and its impact on LPL’s 14,000-plus affiliated financial advisors.
“Dan Arnold takes the reigns from Mark Casady at a challenging time for both the industry and for LPL. There have been rumors that the firm is for sale, and they have lost some big teams while they have hired others,” said executive-search consultant Mark Elzweig.
(Related: 12 Best & Worst Broker-Dealers: Q3 Earnings, 2016)
Recently, Ron Carson said Carson Wealth Management will be moving from LPL, where it had about $2.6 billion of assets, to Cetera Financial Group. Meanwhile, LPL said it recruited a group with about $4 billion of assets and 135 advisors from Lincoln Financial Advisors.
As for the Department of Labor’s new fiduciary rule, it could “particularly whack the bottom lines of independent broker-dealers,” Elzweig explains, though President-elect Donald Trump and others are looking to “mitigate some of the damage to brokerage firms” from such rules.
Compliance Costs
On Friday, a regulator in Massachusetts charged LPL Financial-affiliated advisor Roger Zullo with fraud due to his sales of “unsuitable variable annuities to retirees and older clients” and the IBD with supervisory failure.
The regulator’s office says that Zullo and LPL received more than $1,825,000 in variable annuity commissions over three years. About $1,791,000 of that came from commissions on the same product, the Polaris Platinum III (B Shares) variable annuity.
“Mark Casady was quite clear that the compliance issues were behind them at their [September 2016 national advisor] conference and that other broker dealers were going to experience what they’ve been through in FINRA scrutiny,” said Jon Henschen of Henschen & Associates, an independent-advisor recruiter. “Since the conference the compliance issues have continued with the most recent VA-fraud advisor news piece being an especially damming incident, that I think was the tipping point for new leadership.”
LPL spent a total of $36 million in regulatory charges for 2014 — four times what it incurred in the previous two years for risk management and compliance issues, according to Casady’s 2014 Letter from the Chairman.
