Switching BDs in a Pandemic: How One Team Did It

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.”