LPL Financial’s top recruiting executive will retire later this year, to be replaced by the chief digital officer at UBS Wealth Management USA. The leadership change comes at a time when LPL, the No. 1 independent broker-dealer, faces heated competition for hiring and retaining advisors.

Bill Morrissey, the president of LPL’s business development division, helped LPL’s headcount grow from 6,500 advisors in 2005 to more than 16,000 this year. He recently led the firm’s retention efforts after its acquisition of National Planning Holdings.

LPL headcount Q1 2018

Effective in mid-August, Morrissey will retire and hand the firm’s recruiting reins over to Richard Steinmeier of UBS, LPL announced on June 25. Steinmeier managed the wirehouse firm’s rollout of its digital advice platform under its partnership with developer SigFig.

LPL’s profits nearly doubled to $94 million in the first quarter on the strength of the acquisition, but the firm struggled to meet its headcount goals. Of NPH’s 3,200 advisors, only 1,900 opted to remain with LPL after the acquisition. LPL had previously predicted about 2,000 would make the move. CEO Dan Arnold also said last month that the firm had boosted its recruiting offers.

At the same time, at least seven major hybrid RIA practices have left LPL since it unveiled a change in policies requiring incoming advisors to have at least $50 million on the corporate RIA. Arnold has promised investments in both the corporate and hybrid platforms moving forward.

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Morrissey, who is 53, will retire to spend more time with his young family, according to LPL, which did not make either of the executives available for an interview. In a statement, Arnold wished him well and said his “hard work and commitment over 14 years contributed to the company’s success in a variety of different ways.”

Steinmeier brings a “wealth of experience and a stellar reputation in our industry,” Arnold also said. “Rich’s digital experience and strategic agility will help us optimize the way we attract new advisors to our firm and to existing advisor practices, unlocking new value across the ecosystem.”

The UBS executive has spent the past six years with the wirehouse, moving up to chief digital officer after joining the firm as the head of UBS’ emerging affluent segment and its Wealth Advice Center. He previously served as an executive, including the director of business development, at Merrill Lynch.

Richard Steinmeier, LPL
Richard Steinmeier will take over in August as LPL's head of business development.

“This is an exciting time to join LPL as the company looks to continue its growth — both organically and through strategic M&A,” Steinmeier said in a statement. “LPL has reached a point in its journey where it can begin to engage differently with prospective clients from all market segments.”

Representatives for UBS didn’t immediately respond to a request for comment on his impending exit.

Some 1,300 advisors opted for rival firms over LPL during the NPH onboarding, despite LPL committing to spending $160 million in onboarding costs and financial aid. The firm has also lost several recruiting executives over the past several months, whether to independent recruiting practices or rivals.

Morrissey, who came to LPL in 2004 after a 17-year tenure with Fidelity and a prior stint at Merrill Lynch, had acknowledged the tough recruiting fight. The firm, which has been the No. 1 IBD for 18 years running, has made the case to advisors that its size and scale set it apart from its increasingly close competition.

“Our size and capital structure allow us to invest in things and in ways many of our competitors can’t,” Morrissey said in an interview in early March. “Now, the challenge is we need to make sure that we shrink the firm for our clients and maintain a personal relationship with them.”

LPL’s client brokerage and advisory assets have jumped 22% in the past 12 months to $660 billion, the firm said last week, noting some $72 billion in new client assets from NPH’s four IBDs.

In a note following the announcement, Keefe Bruyette & Woods analyst Ann Dai noted a lingering headwind around lower cash balances but predicted a strong rise in the firm’s earnings-per-share.

The EPS growth will come “from a combination of rate sensitivity, the shift from brokerage to fee-based advisory, a greater proportion of assets utilizing its centrally managed platform and good expense control,” Dai wrote. “In addition, we continue to believe incremental acquisitions could be very accretive to earnings power and our view of the M&A landscape remains positive.”