A hybrid RIA practice with $446 million in client assets joined Securities America from National Planning, pushing exits following its parent firm’s deal with LPL Financial to more than $11.5 billion.
Partners Barbara Williams, Gloria Foote and Kate Hewell brought Financial Focus, which also includes advisor Jerrie Carli, to Securities America in Carlsbad, California, the firm announced this week. Securities America has poached at least two other National Planning firms since LPL acquired its assets.
LPL, the No. 1 independent broker-dealer by revenue, also purchased the assets of three other firms owned by NPH. At least 274 advisors with $11.5 billion in client assets have left the four BDs since the giant Aug. 15 acquisition, according to recruiting announcements by LPL’s rivals.
Securities America, the largest IBD in the Ladenburg Thalmann network and ninth overall, has alone grabbed advisors with roughly $2.9 billion in client assets — the most of any of LPL’s competitors. Recruiter Louis Diamond has arranged six placements of NPH advisors with Securities America, he says.
“Their internal people seem to be all over this, far ahead of everyone else,” Diamond says. “The directive is: ‘This is our opportunity. Even if it’s outside our parameters, let’s get these people in.’ And it’s clearly working.”
Financial Focus officially moved to Securities America from its BD for the past 17 years on Oct. 24, according to FINRA BrokerCheck. A spokeswoman for NPH and a spokesman for LPL declined to comment on the practice’s departure.
LPL CEO Dan Arnold expects roughly 70% of production from National Planning and another BD owned by NPH to go to LPL next month in the first wave of the transition, he said last week. Executives knew there would be a “competitive environment” for recruiting after the deal, Arnold says.
He cited “economic incentives” beyond LPL’s price range as one factor that may have prompted advisors to look elsewhere. LPL plans to spend up to $160 million for onboarding, transition assistance and upfront loans to the roughly 3,200 NPH advisors with $120 billion in client assets.
Securities America provided Financial Focus with a five-year, $503,270 forgivable loan in connection with the BD switch, the practice’s latest Form ADV filing shows. The disclosure marks an additional step of transparency to get ahead of upcoming changes to ADV form requirements, Hewell says. The enhanced reporting rules for RIAs also includes more detailed listings of assets under management by client type, branch offices within an RIA and social media accounts.
The loan, which Securities America will forgive if the practice remains with it for five years, will help pay for “moving expenses, leasing space, furniture, staff and termination fees associated with moving accounts” but Financial Focus “does not confirm the use of these payments for such transition costs,” the ADV says.
Williams and Foote launched the San Diego-area practice in 1984. Hewell, who worked for LPL for five years, came aboard as part of a succession plan three years ago. The firm counts roughly 750 households as its clients, and its RIA listed $104.3 million in assets under management on the ADV form.
The partners wanted a smaller IBD than LPL, and the acquiring firm’s new hybrid RIA policies would not have been a good fit for the practice, she says. Starting next year, advisors joining LPL must place $50 million in advisory assets in LPL’s custody to create their own RIA or to join one using only LPL's separate hybrid platform.
Financial Focus will retain Pershing as its custodian for its brokerage assets and Charles Schwab for the RIA’s assets. The partners chose Securities America out of 10 initial options in an effort to make the practice “as similar as we could” to its prior format, says Hewell.
“This wasn’t something we would have done had we not been forced to make this move,” she says. “What it came down to was trying to do the best thing for our clients.”
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access