LPL Financial Holdings is shaking up its high-net-worth consulting group, Fortigent Holdings Co. Inc., and moving its operations to LPL's campus in Charlotte, N.C., from Rockville, Md.
LPL estimates it will incur a
$9 million charge this quarter in connection to the move, which is expected to be completed this fall, according to company spokesman Brett Weinberg. It expects to see $3 million in cost saving per year after the restructuring is complete.
LPL acquired Fortigent with much fanfare in 2012, extolling the wealth management firm for its investment savvy, client proposal generation and technology. At the time, the firm worked with 90 investment advisory firms that used its platform for the reporting of $50 billion in client assets. It was to be LPL's exclusive entry into providing services for independent advisers who work with high-net-worth clients with at least $5 million to invest.
Three years later, a lot has changed at Fortigent. In the fall, its chairman emeritus and former chief executive, Andrew Putterman, left to start a new firm. Over the summer,
Scott Welch, co-founder and chief investment officer at Fortigent, left. About a dozen Fortigent investment professionals were added to LPL's investment team under Burt White, LPL's chief investment officer.
Mr. Weinberg said fewer than 10 people at Fortigent were let go as part of the restructuring. Fortigent has about 100 employees. Two senior analysts on its alternatives team, Chris Maxey and Ryan Davis, were among those leaving. Mr. Weinberg would not comment on the reasons they left.
The Fortigent brand is staying in place, but LPL is also launching a new platform for its advisers called LPL Private Client, said Matt Enyedi, executive vice president of registered investment adviser and high-net-worth solutions at LPL. Fortigent has offers out to hire investment professionals in Charlotte, he said. By eliminating overlap and bringing the Fortigent operations to Charlotte, LPL can ultimately grow the Fortigent business and extend it to LPL's advisers, Mr. Enyedi said.
LPL's $9 million restructuring charge includes $4.5 million in employee severance, $2 million in relocation costs, $1.3 million in lease restructuring charges and $1.2 million in noncash impairment charges, according to a filing Wednesday with the Securities and Exchange Commission.
