A new lawsuit from a former
LPL Financial adviser in New Hampshire who was fired in 2016 highlights a variety of alleged back office and service problems at the mega firm as it continues to pursue potential acquisitions of major broker-dealer rivals.
The adviser, Marilyn Genery, in a complaint filed in Rockingham County Courthouse last month alleged defamation, breach of contract, economic duress, as well as other complaints, against the firm which she joined in March 2015 and was then fired from in November 2016. On Tuesday, Ms. Genery's complaint was moved to federal court in New Hampshire.
LPL advisers for years have grumbled at the firm's service as the firm has grown in fits and starts to become a behemoth,
now with over 15,210 brokers and advisers. And LPL is looking to continue its growth;
last August, it bought the four National Planning Holdings IBDs and many on Wall Street and the financial advice industry are keeping a close eye on
LPL's potential ambitions to buy rival Cetera Financial Group.
Ms. Genery did not return a call to comment at her new firm, Oakmont Partners, a registered investment adviser. A spokesman for LPL, Jeff Mochal, declined to comment.
Ms. Genery's lawsuit paints a portrait of an LPL back office that is out of step when moving an adviser to the firm.
Registered with Commonwealth Financial Network since 2002, Ms. Genery generated approximately $550,000 annually in income when she was "exploring establishing" a working relationship with LPL in the first few months of 2015, according to the complaint.
That's when LPL bungled her transition, the complaint alleges. Before she agreed to engage LPL as her broker-dealer, "LPL informed [Ms. Genery] that LPL had wrongfully disclosed to [Commonwealth Financial Network] that [Ms. Genery] would be terminating her contractual relationship" with Commonwealth, according to the complaint.
"Such a disclosure, prior to her making such a decision, had catastrophic consequences," the complaint alleges. Commonwealth Financial Network now had the ability to terminate Ms. Genery and hold her license for 30 days, giving the firm time to pick off her clients. She then allegedly signed on to register with LPL "under duress."
Once at LPL, where her income eventually climbed to $675,000, she and her advisory firm, Genery Wealth Management, encountered a lack of training in firm policies and procedures and discovered "the woeful state of LPL technology, starting with the simple tasks of form generation through the securities trading platform," according to the complaint. Those issues resulted in an alleged loss of clients for Ms. Genery.
Her problems at LPL culminated in the fall of 2016 when Ms. Genery reported a broker under her supervision for forging a client's signature, resulting in the firing of that broker, who had "significant connections in the securities industry," according to the complaint. In November 2016, LPL fired Ms. Genery for "violations of the firm's document signature policy,"
according to her BrokerCheck profile.
"The combined effect of not providing proper notice of termination and the false reporting with regard to LPL's signature policy caused [Ms. Genery and her firm] to lose all of their clients," according to the complaint.
