“When you have firms buying and selling and merging, they’re always doing it for the firm,” says Nash. “They really aren’t considering the advisors and they’re not entirely considering the clients.”
Smaller representatives might also feel lost after the deal, says Ressler. While reps bringing in $100,000 to $400,000 in revenue were among the best producers for NPH, at LPL these same representatives would find themselves in the middle of the pack.
Not all of the NPH advisors are upset about the deal, says Morrissey.
“We’ve been receiving some very positive feedback from advisors,” says Morrissey. “Jackson National made a strategic decision to exit the broker-dealer space, they did a significant amount of due diligence to find the right partner or the right broker-dealer to steward their advisors and their clients, and I think the vast majority of the feedback we’ve gotten has been very positive.”
Yet others have also been concerned that Finra’s process for approving the block transfers was opaque and lacked proper accountability. One National Planning Corp. advisor producing more than $700,000 in annual revenue, who asked to remain anonymous, said that the sale’s accelerated time lines enable the participants to obscure details of the transaction from reps and shareholders.
Some onlookers argued that Finra might be having funding issues as broker-dealers go to lower fee structures or become advisory firms. As it receives less money, Finra has more to gain from creating barriers to moving client assets to other industry segments.
OSJ Autonomy Threatened?
The NPC advisor also feared that the sale to LPL would destroy the autonomy of her OSJ.
“The short time line that has been provided to all NPC reps was done with the sole intent to maximize retention -- put another way, to not allow independent business owners the time to make their own decision,” she said. “When that OSJ makes the decision to not transition to LPL, LPL is taking an aggressive position in competing against OSJs.”
Anecdotally, sources close to the deal say that their representatives are already being targeted by LPL.