Leaders of LPL Financial's largest affiliated firms say the departure of CEO Mark Casady provides a smooth transition to a successor, Dan Arnold.

"I see good things going on," says John Hyland, managing director of LPL's largest office of supervisory jurisdiction, Private Advisor Group, with 620 advisers in Morristown, New Jersey. "Dan's got a great strategic mind and is great at execution. That's not to say that Mark isn't. It's just that sometimes you've got to hit the refresh button."

Arnold, Casady and Andy Kalbaugh, an LPL managing director, called Hyland this morning to discuss the change, Hyland says.

Read More: 2 key challenges await LPL's next CEO

"I love the consistency of leadership," he says, expressing a sentiment reflected by many of his fellow OSJ leaders.

A STOCK TUMBLE
Casady leaves after a rocky stretch in which LPL's stock price tumbled back to near its IPO in late 2010.

On Dec. 1 of that year, the stock was trading at $36.37 compared to $30.96 on Sept. 30 of this year. In the past two months, the stock price has recovered, although it slid below $40 yesterday. LPL also engaged in an expensive stock buyback last December. The company repurchased about 4.3 million shares at an average cost of $44.50. The price then fell to a low of about $16.50 in February. It has risen over the course of this year but still trails the levels of March 2014, when the stock traded for more than $55.

These problems aside, "Mark has been a good CEO," says Chip Roame, managing partner of Tiburon Strategic Advisors.

"He has transitioned LPL from a modest size to be the dominant independent broker-dealer," Roame says, pointing out that Casady oversaw its growth from several thousand advisers to about 14,000 today. "This transition was critical to its future success."

Casady will serve as non-executive chairman of the board until March 3.

"I am thrilled that Dan will take up the mantle of LPL’s profound mission," Casady said in a statement. "I will be able to retire knowing the company is in good hands and with bright prospects for the future."

SEAMLESS TRANSFER OF POWER
Other LPL leaders echoed Hyland's satisfaction with what they see as a seamless transfer of power.

"I think Dan is already running the show," says Gary Campbell, CEO of LPL super OSJ Financial Advocates of Olympia, Washington, which has nearly 200 advisers in banks and credit unions. "In my mind, I think it's a logical step."

With Casady as the public face of LPL since becoming CEO 14 years ago, Campbell says Casady's role had evolved into one that more closely resembles a chairman. While Casady spoke about the company's ever-changing strategies in the face of so many changes, such as the Department of Labor's fiduciary rule, Arnold had taken over regular calls with LPL advisers, he says.

"Mark was on stage, but, at least at my level, I didn't see him in our meetings and having discussion with us. That is where the rubber meets the road and where the work is done, and that is where Dan is," Campbell says.

Arnold became president of LPL in 2015 "and has been responsible for driving the development of the firm’s long-term strategy for growth," according to a statement. “As president of LPL, he has led the firm’s focus on business development, existing adviser and institution growth, the client experience, research capabilities and sponsor partnerships."

Arnold joined LPL in 2007 when it bought Uvest — a broker-dealer that provides investment services to banks and credit unions — which he led as president and chief operating officer. Prior to becoming LPL's president, he served as its CFO.

A TOUGH ROAD AHEAD?
Campbell thinks Arnold is well-equipped to handle a future likely to be increasingly difficult for LPL to navigate.

"You look at compressing margins. You look at all the different ways that technology is coming into play," he says. "I think Dan is looking at those things. I think Dan is the next generation's leader. As a leader, he's direct, which I like. It's so much easier to work with someone who is very direct. He's easy to communicate with. He's clearly got a great business mind."

Sal Zambito, COO of Global Retirement Partners, a hybrid firm affiliated with LPL, with 150 advisers in San Rafael, California, thinks Arnold's experience as a CFO will prove key to his success going forward.

"I'm happy to hear that Mark has decided to move on to pursue personal endeavors, and I'm optimistic about a new leadership with a finance background to maximize shareholder wealth," Zambito says.

Like the current OSJ leaders at LPL, Andrew Ahrens praised Casady's leadership at LPL. Ahrens ran a 10-adviser OSJ at LPL until last year, when he left to launch his RIA, Ahrens Investment Partners, in Baton Rouge, Louisiana.

Casady "did a really good job … but I think he probably was feeling the heat from the investors and shareholders, and sometimes a change at the helm is good. … Sometimes someone comes in fresh and reinvigorates everybody," says Ahrens.

Casady's departure will put to rest recent reports that LPL could be on the block and looking for an outside buyer, Hyland predicts.

Or maybe not.

As LPL's new CEO, Arnold could make the company an even more attractive acquisition target, possibly for a large European finance or insurance firm looking for a presence in the U.S. market, Campbell says.

"There are not many options for a buyer that would be a good fit," Campbell says, "but I think that, when it comes to a buy-sell, nobody is better than Dan to navigate and negotiate that type of thing."

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Ann Marsh

Ann Marsh

Ann Marsh is a senior editor and the West Coast Bureau Chief of Financial Planning. Follow her on Twitter at @Ann_Marsh.