Tampa, Fla.-based Independent Financial Partners, one of the largest OSJ offices for LPL Financial, announced plans to leave LPL and form its own broker-dealer.
IFP's decision to leave LPL and launch its own hybrid RIA/B-D runs counter to a trend established in recent years of small B-Ds deciding to close their doors and join larger brokerage firms so they could off-load increasingly expensive responsibilities for compliance and technology. Apparently, IFP executives had their own ideas about technology and were convinced that the benefits of building their own platform were worth the costs.
In a statement late Friday, IFP CEO William Hamm said that growth of the hybrid firm created a “need for us to transition to an environment where we can control our own destiny and address our more complex needs.”
One such need is a proprietary technology project underway to integrate many third-party and emerging software programs, the company said. Given its extensive network of reps and substantial assets under advisement, IFP eventually might have far more value as a standalone entity than as a super OSJ affiliated with the nation's largest independent B-D.
The firm plans to have its B-D up and running within the next 12 months. IFP advisors have about $40 billion under advisement, according to the firm's ADV filing as of December 31.
Beyond the desire to build its own platform, IFP's motivation wasn't clear. Late last summer, LPL reportedly sought to renegotiate terms of its agreements with super OSJs to LPL's advantage.
If that move played a role in IFP's decision they weren't talking about it. Indeed, both parties only had kind words for each other in prepared statements.
“LPL has been a great partner over the past 11 years,” Hamm said.
LPL executives were equally postive. “We appreciate our partnership with IFP over the last decade and are delighted to have been a part of their growth,” said Andy Kalbaugh, managing director and divisional president at LPL Financial, in a joint statement. “In discussing our respective futures, it became evident that our firms’ directions are not strategically aligned. We wish them all the best in this new venture.”