LPL Financial

LPL Financial Holdings Inc (commonly referred to as LPL Financial) was founded in 1989[2] and is considered the largest independent broker-dealer in the United States. As of 2018 the company had more than 16,000 financial advisors,[3] over $681 billion in advisory & brokerage assets,[4] and generated approximately $5.2 billion in annual revenue for the 2018 fiscal year.[5]

LPL Financial Holdings Inc
TypePublic
NASDAQ: LPLA
Russell 1000 Component
IndustryFinancial services
Founded1989 (1989)
HeadquartersBoston, Massachusetts, United States
Key people
Dan Arnold (President & CEO)

Matt Audette (Managing Director & CFO)

Andy Kalbaugh (Managing Director & Divisional President, National Sales and Consulting)

Sallie Larsen (Managing Director & Chief Human Capital Officer)

Michelle Oroschakoff (Managing Director & Chief Legal and Risk Officer)

Scott Seese (Managing Director & CIO)

Dayton Semerjian (Managing Director & Chief Customer Care Officer)

Rich Steinmeier (Managing Director & Divisional President, Business Development)

Burt White (Chief Investment Officer & Managing Director, Investor and Investment Solutions)
Revenue US$5.2 billion (2018)
Number of employees
4,658 [1] (2020)
SubsidiariesLPL Financial LLC
LPL Insurance Associates, Inc.
Fortigent LLC
The Private Trust Company,
Websitewww.lpl.com

LPL Financial was formed in 1989 through the merger of two brokerage firms—Linsco (established in 1968) and Private Ledger (established in 1973)—and has since expanded its number of independent financial advisors both organically and through acquisitions. LPL Financial has main offices in Boston, Fort Mill, and San Diego.[6] The company is a member of FINRA and the SIPC.

LPL's subsidiaries are LPL Financial LLC, LPL Insurance Associates, Inc., Fortigent, LLC, and The Private Trust Company, N.A.

Acquisitions

On December 3, 2018, LPL Financial Holdings Inc. reported its acquisition of AdvisoryWorld, a technology company and leading provider of digital solutions serving the wealth management industry. LPL Financial advisors will gain access to the solutions from AdvisoryWorld at no cost, and AdvisoryWorld products will still be available for purchase as a stand-alone product. AdvisoryWorld offers a suite of tools designed to help advisors attract and retain more assets, turning prospects into clients while servicing existing clients with advanced analytics and modeling. Founded in 1987, the company’s products include proposal generation, portfolio and investment analytics and portfolio modeling capabilities.[7]

On August 18, 2020, LPL Financial Holdings Inc. reported its purchase of E.K. Riley Investments, LLC, a broker-dealer and registered investment advisor (RIA) based in Seattle. E.K. Riley served more than $2 billion of client assets and expected approximately 90% of its advisors to join LPL. LPL continues to anticipate a transaction multiple of ~6x post-synergy EBITDA.[8][9]

On August 20, 2020, LPL Financial Holdings Inc. reported it has completed its purchase of the properties of San Diego-based Lucia Securities, a broker-dealer and registered investment advisor (RIA). The deal was arranged as a acquisition of properties, which completed on 18 August 2020. LPL is starting to expect a maximum ~6x EBITDA post-synergy deal.[10][11]

On October 27, 2020, LPL Financial Holdings Inc. announced its acquisition of Blaze Portfolio, a Chicago-based fintech firm founded in 2010. LPL will continue to offer Blaze Portfolio's services as a stand-alone product, as well as bringing the trading capabilities to all LPL Financial advisors. The transaction was signed and closed on Oct. 26, 2020. LPL Financial paid approximately $12 million and agreed to a potential contingent payment of up to $5 million subject to milestones and customary purchase price adjustments.[12][13]

Statistics

Key facts regarding LPL Financial include the following:

  • 4.5 million funded accounts[14]
  • 17,168 financial professionals[15]
  • Approximately 4,500 technology, custody, and clearing service subscribers[16]
  • Approximately 700 financial institution partners[17][14]
  • $810 billion in advisory and brokerage assets as of September 2020[18]

On May 2, 2018, LPL Financial agreed to a $26 million settlement arising from unregistered securities.[19][20][21][22]

On October 30, 2018, LPL Financial agreed to pay a $2.75 million fine and perform a look-back review of certain complaints primarily related to anti-money-laundering (AML) reporting and customer complaint reporting.[23]

On June 26, 2019, LPL Financial settled with the Commonwealth of Massachusetts at a cost of $1.1. million and a review of certain internal controls. The Massachusetts Securities Division (MSD) had investigated and charged LPL over compliance matters related to licensing of advisors/supervisors and late reportings.[24]

On December 26, 2019, LPL Financial paid a fine of $300,000 as part of a settlement with FINRA primarily related to its systems and procedures related to Uniform Gifts to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA) accounts. The settlement was based on internal controls and was not related to any investor harm.[25]

On December 30, 2020, LPL Financial paid a fine of $6.5 million as part of a settlement with the Financial Industry Regulatory Authority (FINRA). As part of the settlement, LPL Financial consented to the findings that they had failed to supervise and failed to maintain adequate records. FINRA alleged that inadequate recordkeeping had exposed customers to losses through a Ponzi scheme created by one of its representatives. [26]

References
  1. "Corporate Snapshot". LPL Financial. September 30, 2020. Retrieved November 2, 2020.
  2. "Our History". www.lpl.com. Retrieved 2020-11-02.
  3. "Recruitment & Staffing". Investment News. Retrieved Apr 14, 2019.
  4. "Asset Breakdown". Investment News. Retrieved Apr 14, 2019.
  5. "Revenue Breakdown". Investment News. Retrieved Apr 14, 2019.
  6. "LPL Financial Work Locations". www.lpl.com. Retrieved 2020-11-02.
  7. "LPL Financial Acquires Fintech Firm AdvisoryWorld". www.lpl.com. Retrieved 2020-11-02.
  8. "LPL Financial Closes E.K. Riley Asset Acquisition". www.lpl.com. Retrieved 2020-11-02.
  9. Research, Zacks Investment. "LPL Financial (LPLA) Closes Deal to Buy Assets of E.K. Riley". Zacks Investment Research. Retrieved 2020-11-12.
  10. "LPL Financial Closes Lucia Securities Asset Acquisition". GlobeNewswire. 20 August 2020. Retrieved 25 August 2020.
  11. "LPL Financial Closes Lucia Securities Asset Acquisition". finance.yahoo.com. Retrieved 2020-11-12.
  12. "LPL Acquires Fintech Firm Blaze Portfolio". finance.yahoo.com. Retrieved 2020-11-12.
  13. "LPL Financial snaps up trading platform Blaze Portfolio". InvestmentNews. 2020-10-27. Retrieved 2020-11-12.
  14. "LPL Financial LLC Past Performances and Asset Under Management". www.gurufocus.com.
  15. "About LPL". www.lpl.com. Retrieved 2020-11-02.
  16. Publishing, Value Line. "Value Line – The Most Trusted Name in Investment Research". www.valueline.com.
  17. Pope, Heidi (August 1, 2018). "Harbor Financial Joins LPL Platform With $360M In AUM". Financial Advisor. Retrieved April 19, 2019.
  18. "Corporate Snapshot". www.lpl.com. Retrieved 2020-11-02.
  19. Kelly, Bruce (May 2, 2018). "LPL agrees to $26 million settlement with states over unregistered securities". Investment News. Retrieved April 12, 2019.
  20. "Order No. IC19-CAF-01" (PDF). Texas State Securities Board. Mar 28, 2019. Retrieved April 11, 2019.
  21. "2019 Division of Securities Enforcement Actions". Washington State Department of Financial Institutions. Mar 28, 2019. Retrieved April 12, 2019.
  22. "LPL Financial Reaches $26 Mln Settlement over Brokers' Sale of Unregistered Securities". AdvisorHub. 2018-05-02. Retrieved 2020-11-12.
  23. "LPL agrees to settlement with FINRA over historical compliance matters". www.lpl.com. Retrieved 2020-11-02.
  24. "LPL Announces Settlement with Massachusetts". www.lpl.com. Retrieved 2020-11-02.
  25. "LPL Agrees to FINRA Settlement Over UGMA/UTMA Practices". www.lpl.com. Retrieved 2020-11-02.
  26. "Letter of Acceptance, Waiver, and Consent Re: LPL FInancial" (PDF). finra.org. Retrieved 2021-02-01.
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