LPL Financial Lures Securities America Firm Said to Oversee $3 Billion
(Story updated with comment from Securities America CEO.)
Independent broker-dealer Securities America’s largest office of supervisory jurisdiction has shifted its affiliation to LPL Financial in a move involving $3 billion of customer assets, according to LPL.
Connealy said in an e-mail that he was worried about the sustainability of Securities Americas’ service culture following the sale of its parent company, Ladenburg Thalmann, in February to Advisor Group, which is owned by private equity firm Reverence Capital Partners.
“We were concerned with the uncertainty,” he wrote of private equity firms’ reliance on debt to accelerate short-term exit strategies. “The leverage of PE balance sheet, and potential inability to reinvest in technology and services, were of primary concern.”
JFC includes 17 in-house employees and about 100 independent brokerage practices that contract with it for supervisory and other support services. Advisor Group had offered Connealy and other large producers at Ladenburg’s five affiliated brokerage firms limited partnership interests but no retention bonuses.
Jim Nagengast, Securities America’s chief executive, said a “significant” number of JFC affiliated advisors who represent “a majority of its revenue” remain with the Advisor Group broker-dealer.
“JFC’s advisors recognize the value our firm has always delivered to their businesses, and the crucial role we have served in directly driving the growth of JFC over the years,” he said in an e-mailed statement. “We wish the remainder of JFC all the best.”
Connealy, who was affiliated with Securities America for 19 years of his 32-year brokerage career, moved his registration to LPL last Thursday, while some of his OSJ relationships have been transitioning since mid-January. He said he had been talking to LPL for a year, adding that its investments in broker workstation upgrades and digital account-opening technology are proving themselves as he moves customers.
“The little things add up, like one click versus four clicks, and we’ve already seen a significant time savings,” he said in a prepared statement.
JFC has added 12 new OSJ relationships this year, half of whom had been with Advisor Group, according to Connealy, who is using LPL’s corporate registered investment advisor and custodian platform as well as its brokerage services. He said he is looking for an additional 25% growth rate in each of the next few years with the help of LPL’s internal recruiters.
He did not comment on transition assistance, but LPL has enhanced packages and created new services, including a channel for wirehouse brokers. Recognizing first-quarter market volatility, it is also offering forgivable transition loans based on end-of-2019 trailing-12-month production, according to published reports.
Connealy, who began his brokerage career in 1987 with American Express Financial Advisors, has no disclosure events on his BrokerCheck record.
LPL, which added 299 advisors during the first quarter, last week agreed to acquire Lucia Securities, a San Diego-based broker-dealer and RIA with 20 advisors managing $1.5 billion of client assets.