LPL to shut start-up aimed at mass-market investors

Resources for NestWise to be diverted elsewhere as training of new financial professionals remains costly, difficult.

Aug 28, 2013 @ 4:01 pm

By Bruce Kelly

LPL Financial LLC has pulled the plug on a new venture that promised to train young advisers and work with clients with less than $100,000 in assets, known in the industry as the “mass market”.

On Wednesday, the company told the 37 employees it was closing the unit, a registered investment adviser called NestWise LLC.

LPL launched the business in April 2012 with much fanfare. LPL chief executive Mark Casady said he expected banks and credit unions looking to expand their offerings of securities products as being potentially receptive to younger advisers, despite a relative lack of experience.

“LPL Financial has made a strategic decision to close its NestWise business unit, effective Sept. 1,” LPL spokeswoman Betsy Weinberger wrote in an e-mail to InvestmentNews. “LPL Financial believes financial resources earmarked for NestWise can be more effectively deployed in other areas of the business, and will be redeployed into our core business consulting activities for both advisers and institutions for training development.”

NestWise employees and advisers were told that they are welcome to apply for other positions at the company, Ms. Weinberger added.

Last year, LPL shifted some key personnel to NestWise. Longtime LPL president Esther Stearns was moved to take over as chief executive of the subsidiary. Another longtime LPL executive, former head of marketing Kandis Bates, was NestWise's chief administrative officer.

NestWise had only 120 clients and $130,000 in assets under management, according to the firm's Form ADV.

NestWise is being closed as LPL firms up its plans to outsource as many as 130 back office jobs this fall and early next year.

The expense of training new advisers has sharply curtailed such programs on Wall Street in recent years. LPL's launch of NestWise appeared to buck that trend but its closing reinforces the difficulty large firms like LPL have in finding the next wave of financial professionals.


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