LPL CEO Mark Casady speaks at the firm39s annual conference in San Diego on Monday

LPL CEO Mark Casady speaks at the firm's annual conference in San Diego on Monday.

LPL's CEO Says Regulatory Scrutiny is "Toughest I've Seen."

LPL is now the fourth largest broker/dealer in the U.S., with over $500 billion in advisory brokerage assets, president Robert Moore told attendees of the LPL Focus conference on Monday. In what roughly resembled a short pep talk, Moore assured advisors that the firm was perfectly positioned to collectively be the very best in the industry, with a “laser-like focus” on service and operations.

“I’m aware of the headwinds and challenges that face us and I recognize that we have to do more to adjust to these changing circumstances and respond to those conditions,” Moore says. Namely, low-interest rates have cost LPL $100 million in revenues, and that meant the firm had to make some "course corrections" and "adjustments" in the firm’s pricing strategy. 

“But those changes are largely done and now we’re ready to move forward,” Moore adds. He told attendees that there will not be any structural changes to the firm’s pricing for 2015. He said the firm is eliminating the prospectus delivery fee and annual maintenance fee for all alternative investment positions. 

CEO Mark Casady says the regulatory environment is one of the largest challenges facing the industry. “We know the bar has changed for all of us—it’s going up and up and up,” Casady told attendees. In recent years, the firm has faced multi-million dollar fines from both FINRA and state regulators. More recently, LPL paid a $2 million fine and agreed to $820,000 in restitution to settle charges from the Illinois state securities regulator the firm had inadequate records processes. 

“We know we’re asking more from you with the documentation, the background information and so forth, but make no mistake, I believe in what it is we do,” Casady says. “We want to make sure we’re protecting you, your clients and the firm.”

FINRA in particular is expanding its operations, Casady added. “Their audits are getting more and more intense. I have to say it’s the toughest environment I’ve seen in my over 30 years in the financial services industry,” Casady said. 

“Last year, we had an 11 percent error rate on tax reporting. Not acceptable. Not the kind of moment you want to happen with your relationship with a client,” Casady said. To help solve for that, LPL work with a new vendor, not yet announced, starting this tax season.

LPL also obliquely addressed the recent personnel changes, including the former head of LPL Financial’s independent advisor services Derek Bruton, who left in April due to concerns over his interactions with other employees.

“The changes we’ve been making to our leadership positions has given us an opportunity to demonstrate the depth of our talent and to elevate those individuals into leadership positions to make a difference,” he told attendees. 

Recently LPL decided to bring its services and operations team together with the team working directly under Moore, he told attendees Monday. ‘That will undoubtedly improve your experience."

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