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Switching BDs in a Pandemic: How One Team Did It

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After leaving Securities America to join the hybrid platform of LPL Financial, Chicago-based, family-run advisory firm Blyth & Associates is now facing the challenges of transitioning in the middle of the ongoing COVID-19 pandemic.

Those challenges include the fact that, due to LPL’s travel ban, most of the transition support has been done virtually while everybody at Blyth & Associates has been working from home for the past three weeks, according to Bill Blyth, president of the firm, which has about $350 million in assets under management.

After Advisor Group said it was buying Securities America parent company Ladenburg Thalmann in the fall, Blyth decided to “look at all the options” available to his firm, he told ThinkAdvisor on Tuesday. And there were many options because he had received calls from major firms, including LPL, “on a regular basis,”  he said.

“In January, we decided that LPL has the best combination of technology and people and they’re also the largest and they’re also one of the most financially secure” firms, he explained. LPL’s enhanced digital efficiencies “will free us up to spend more time with our clients” also, he noted. LPL, therefore, presented a “very strong value proposition for my clients and for us,” he told ThinkAdvisor, adding he also preferred the idea of teaming with a shareholder-based firm like LPL over being with a private investor-owned firm like Advisor Group.

The transition process started in January, his firm on Feb. 25 sent a notice to clients about the change to LPL, and the closing date of the change was March 27, he said.

It was business as usual in January, he noted. But lockdowns and shelter-in-place orders took hold in March in many major U.S. cities, including Chicago, as the transition was in full force.

“There was concern” that the Financial Industry Regulatory Authority and “our state regulators might be closed” — or at least not be able to function as normal — before the change could be approved by the regulators after all the necessary forms were completed, Blyth told ThinkAdvisor. However, “it turns out that a lot of it’s done electronically now” and “the transfer did go through without a hitch,” he said.

Typically during such a move, LPL representatives would come out and show how their systems and technology work, but “they couldn’t do that” now because of the pandemic, he noted.

“The first thing that’s been very interesting is they’ve been doing all this remotely,” he said. When technology “works and does what it’s supposed to, I’m surprised and pleased because a lot of times it doesn’t work” exactly as billed, he said, noting it has been working “very well.”

Luckily, some training and meetings happened in person before the shelter-in-place orders, he noted.

There is still “a ton of work” to be done, he went on to say, noting the book of business alone typically takes about 8 to 12 weeks to transfer to a new BD.

“This is going to take many weeks,” he said, noting many clients still need to be contacted and some paperwork still needs to be done.

One ironic aspect of the pandemic, however, is that it may end up saving some time because clients that need to be spoken to are now almost always home, he said, adding he also cannot visit clients in person right now. Gone are the “homemade cookies” his advisors might get from some clients during at-home meetings, he noted.

Blyth & Associates started as a small family business in 1994 when twin brothers Bill Blyth, a financial planner, and Robert Blyth, an estate attorney, teamed to launch a joint practice serving their clients’ financial and tax needs. “The team approach adds a broader perspective and provides increased benefits to our clients,” according to Bill, who noted that many consumers like the idea of a “one-stop shop” because it minimizes costs for clients and helps with intergenerational planning.

Over the years, the business has grown to include the Blyths’ cousin, Michael O’Malley, as operations manager, and Bill’s son, Daniel Blyth, as account manager. Other key members of the team include financial advisors Carla Nitz and Christopher Fudacz, with operations support from Moira Simeti, Rebecca Ahern and Andrew Nitz.

“We extend a warm welcome to the entire team at Blyth & Associates Financial Services, and we look forward to a long lasting partnership for years to come,” Rich Steinmeier, LPL Financial managing director and divisional president, business development, said in a statement. “We remain committed to investing in our advisors’ business to deliver the differentiated capabilities, integrated technology and innovative solutions that can help advisors be successful today and into the future,” he said.

Advisor Group did not immediately respond to a request for comment on Blyth & Associates shifting to LPL’s platforms.