LPL reps on Pershing platform are seeking new B-D homes

Some 200 plan to migrate to other firms, but most are expected to stay

Aug 23, 2009 @ 12:01 am

By Lisa Shidler

In the wake of a decision last month by LPL to bring in-house the clearing function at three subsidiary broker-dealers, about 200 financial advisers at those firms have moved to other firms or are planning to do so.

Some 1,700 advisers at the three broker-dealers acquired by Boston-based LPL Investment Holdings Inc. in 2007 — Associated Securities Corp. of El Segundo, Calif., Mutual Service Corp. of West Palm Beach, Fla., and Waterstone Financial Group of Itasca, Ill. — use the technology and operations platform of Jersey City, N.J.-based Pershing LLC.

For reasons including a desire to remain on the Pershing platform, the client-related work that a platform change would require and frustration with LPL for seeming to renege on a commitment to Pershing made at the time of the acquisition, many advisers are looking to move to other Pershing-affiliated broker-dealers.

One independent broker-dealer that uses the Pershing platform — and asked not to be identified — reported that it has signed contracts with 100 LPL advisers who will make a switch.

In most cases, however, the -broker-dealers are attracting far smaller numbers of advisers.

For example, 20 LPL-affiliated advisers who generate more than $10 million in annual revenue are joining Securities America Inc. of La Vista, Neb., said Gregg Johnson, senior vice president of branch office development and acquisitions.

Summit Brokerage Services Inc. in Boca Raton, Fla., has landed about 20 advisers from Mutual Service, many of whom were familiar with the firm, said chief executive Marshall Leeds, who anticipates that more will join in coming weeks.

“Our phone is ringing. We have no outbound solicitation,” Mr. Leeds said.

“We have no cold callers,” he said. “Advisers are calling us.”

First Allied Securities Inc. in San Diego said it has been contacted by several advisers at Mutual Service and Waterstone, according to Matthew Bassuk, senior vice president of business development at First Allied. He predicted that his firm will attract 30 to 70 advisers.

About 30 advisers affiliated with Waterstone have moved to Ausdal Financial Partners of Davenport, Iowa, said John Hicks, chief marketing officer at the firm, who formerly worked at Waterstone.

“Relationships matter,” he said, noting that he knows many of the advisers who are moving to Ausdal. Mr. Hicks expects to lure more in coming weeks.

LPL contends that most of the advisers at the three broker-dealers will stay.

“The largely favorable feedback we have received since the integration announcement makes us confident that the overwhelming majority of advisers at our affiliates will choose to remain with LPL Financial,” Joseph Kuo, spokesman for LPL, said in a statement. “Equally important, we have a strong track record of effecting seamless adviser transitions, as well as making significant, continual reinvestments in our platform due to our industry-leading size and scale.”

In fact, while advisers have groused about LPL's decision, adviser Frank Congemi, who manages $100 million in New York and Deerfield Beach, Fla., and is affiliated with Mutual Service, thinks that many advisers will choose to stay.

He admits that he was frustrated with the company's decision but said that Mutual Service executives have worked closely with advisers to address their concerns.

“The relationship which was adversarial is now a real partnership,” Mr. Congemi said. “I believe in the integrity of management that they'll do whatever it is they can to give us what we're used to.”

E-mail Lisa Shidler at


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