"I don't think this move is about platform capability, it's about running a business," says Doug Dannemiler, senior analyst at Aite Group, who adds that both LPL and Pershing have top-notch offerings. "Going into this, advisors at these firms should have known it's highly unusual for a self-clearing firm to continue operating on another platform. There's almost always consolidation."
But Dwyer says LPL isn't completely severing its ties to Pershing. He notes that roughly one-quarter of the 780 financial institutions that LPL supports on its platform currently clear through Pershing, and that the majority will continue to do so.