A data leak revealed last week at BlackRock Inc. exposed names, email addresses and other information of about 20,000 advisors who are clients of the asset manager, including 12,000 at LPL Financial, the largest U.S. independent broker dealer.
“BlackRock inadvertently posted a small number of sales-related documents, which were up for a short period of time, and promptly removed,” the company said Monday in an emailed statement. “The information related to a very limited number of wealth management platforms impacting approximately 20,000 independent advisers in the U.S.”
LPL informed advisors over the weekend that BlackRock posted details about some of them on its website. The leak affected advisors who do business with BlackRock’s iShares exchange-traded funds unit.
“After being informed by BlackRock of this issue, our first priority was to reach out to our advisers to make them aware of the situation and share the details we had learned,” Jeffrey Mochal, a spokesman for LPL, said Sunday in a statement. “We will continue to stay in close communication with BlackRock as they research the incident and will share information with our advisers as it becomes available.”
ETF Business
BlackRock and LPL are the latest financial firms to be ensnared in a data issue affecting a key part of their business. ETF sales are crucial to BlackRock, which runs the world’s largest ETF business. Such products account for one-third of the approximately $6 trillion in assets BlackRock oversees. Registered financial advisors who work with brokerages such as LPL are a key channel for getting ETFs into individual investor portfolios.
BlackRock didn’t identify the other platforms affected. The company said it “recognizes the seriousness of the error and we deeply regret that it occurred. We always seek to treat the information entrusted to us with great care.”
Bloomberg News reported on Friday that BlackRock accidentally released information on thousands of financial advisors on its website. The data appeared in several spreadsheets, some of which included designations such as "club level." LPL categorizes advisors with such tiers, including a so-called "Chairman’s Club" for some top performers.
In its statement, BlackRock said the disclosures resulted from human error. “There was no security breach and no compromise of BlackRock systems,” the firm said. Sales-related information for an internal customer relationship management-related system was inadvertently posted on iShares.com, the company said.
‘Limited Scope’