$1B enterprise picks LPL after spurning it four years ago

About four years after choosing a rival brokerage over the nation’s largest independent broker-dealer, a billion-dollar enterprise moved to LPL Financial.

Elite Financial Network, a Huntington Beach, California-based office of supervisory jurisdiction with 30 financial advisors and $1 billion in client assets, left Advisor Group’s Securities America to rejoin LPL, the firms said on Jan. 5. Founding advisor Dan Cairo, co-owner and Chief Financial Officer Cindy Cairo, as well as Managing Partner Craig Wong, lead the firm. Elite had picked Securities America rather than remaining with LPL in 2017 after its acquisition of the shuttered National Planning Holdings Network.

LPL and its competitors are ramping up their transitional services to large teams in an effort to reduce the disruption of switching firms. Its $325 million deal for NPH in 2017 and Advisor Group’s $1.3 billion acquisition of Securities America’s parent firm in 2020, along with a non-COVID health scare early last year involving his heart, prompted Elite’s founder to think about planning for stability into the future, Dan Cairo said in an interview. LPL has dispatched a team of five to Elite’s office to assist with the transition over the next three weeks, he noted.

It’s “a totally different firm than I recall four years ago,” Cairo said, praising the technology, marketing and compliance services from LPL’s corporate office as offering growth potential without the possibility of surprise M&A announcements about the brokerage changing hands.

“What I didn't want to get caught up in is having to do this again because it's forced upon me,” Cairo said. “I don't need bumps in the road hitting my car unannounced.”

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As is typical in an OSJ transition, a portion of the enterprise’s business is staying with Securities America.

“We wish Elite Financial Group the best in their transition,” Advisor Group spokesman Chris Clemens said in an emailed statement. “We look forward to continuing to help drive growth and success for the financial advisors formerly with Elite Financial Group who have chosen to remain with our firm.”

Many large practices and enterprises have been switching their brokerages recently in search of greater flexibility with respect to products and enhanced layers of support with services such as estate planning, legal and tax strategies, according to Nancy DiBattista, Commonwealth Financial Network’s senior vice president for transition and field development operations. She leads a new team out of the LPL rival’s headquarters called its Virtual Transition Support unit.

“We're seeing a lot of bigger practices making a move,” DiBattista said in an interview last month. “We've got a team that fully supports all of our advisors, and it's just a matter of a phone call.”

LPL’s mastery of such recruiting logistics has been paying dividends in the marketplace for talent. Out of 29 M&A and recruiting transitions of at least $1 billion in client assets in the independent brokerage sector in 2021, LPL gained nine teams, firms and enterprises and lost only one. In contrast, Securities America saw two of the mega teams leave and didn’t add any.

Elite’s move represents at least the second major enterprise to come back to LPL’s fold in the past six months after spurning it a few years earlier, as well as a demonstration of the difference between the firm of today with an industry-leading headcount of 19,627 advisors and the one that acquired NPH in 2017. After LPL’s acquisition of NPH, it retained about 70% of the firm’s business. When it purchased Waddell & Reed last year, the firm kept 99% of the midsize brokerage firm’s client assets.

“We are pleased to be their partner of choice as they continue to evolve their practice and deliver more value to clients,” LPL senior vice president of business development Ken Hullings said in a statement about Elite’s move. “We look forward to a long-lasting and successful relationship with Elite Financial Network.”

Cairo praised the leadership of LPL CEO Dan Arnold, who took over the role at the beginning of 2017. Elite formally affiliated with the firm on Dec. 15, according to FINRA BrokerCheck. As an advisor himself in addition to being the OSJ manager, Cairo looks forward to LPL’s staff handling accounting and compliance through its brokerage and corporate RIA teams. A 35-year industry veteran who will turn 61 years old next month, Cairo shut down Elite’s hybrid RIA two years ago to cut down on such tasks, he said.

“I just want to do what I do well, which is talk to clients, help them reach financial goals, speak to my advisors,” he said. “Life's good after that.”