After LPL walks away from FSI, two large branches join the trade and lobbying group

The Financial Services Institute, the independent broker-dealer industry's largest trade and lobbying group, saw the largest company in the industry, LPL Financial, walk out the door earlier this year. FSI and LPL haggled over a discount to the cost of a FSI membership, and then LPL decided to beef up its lobbying presence in Washington. But that split hasn't stopped some of LPL's most notable financial advisers from signing up with FSI. In a first, FSI is allowing large branches, known in the industry as “super OSJs,” or offices of supervisory jurisdiction, that are licensed with broker-dealers that are not FSI members to join the lobbying group. Historically, being a member firm of FSI has been an option only for independent broker-dealers. FSI said on Tuesday that two such LPL branches have joined the trade organization: Advantage Financial Group, led by Joseph Russo, and Private Advisor Group, led by Patrick Sullivan and John Hyland. “With the impending [Department Of Labor] rule and the constantly evolving regulatory environment, we owe it to our network of 600 advisers to ensure we are staying ahead of the curve to provide a voice in Washington and solutions they can use in their practices,” Mr. Sullivan said in a press release. LPL in June opened a dedicated office in Washington for its team of government relations executives. Previously, those executives did not have a dedicated office. An LPL spokesman, Jeff Mochal, did not return a call seeking comment. Despite LPL's departure from FSI, the organization is continuing to grow. In a statement Tuesday, it said it has added 15 new firms, with most of the interest coming from firms looking for a partner to help with the DOL's fiduciary rule. FSI has a number of DOL fiduciary rule tools available to members, including a best interest contract exemption contract template and a compliance guide. FSI counts more than 100 member firms that are home to more than 160,000 independent advisers. (See: LPL Financial's problems keep piling up )