“They’re coming to my biggest representatives first,” says a manager at one former NPH OSJ. “They’re talking to them at various national conventions, saying things like ‘You want to go to LPL in a direct relationship, don’t you?’ so they don’t violate the anti-recruiting rules, but still have an opportunity to lure a rep away and take them on a direct basis.”
The NPC advisor said that she was offered triple retention money to affiliate with LPL directly instead of remaining with her OSJ.
Morrissey denied that LPL was attempting to poach representatives affiliated with former NPH OSJs.
“We want to make sure that the OSJs and the advisors that are part of NPH are making an informed decision about their options,” says Morrissey. “We are not going around the OSJs and direct to their advisors. If an OSJ wants to go in a different direction and decides to join a different broker-dealer, that’s their choice and we respect their decision -- we also want to make sure that their advisors are making an informed choice.”
Still, several onlookers argued that the decision to grant block transfers to LPL could backfire on LPL and Jackson National as many advisors and OSJs are trying to avoid the transfer to LPL.
At least one source, who asked to be unnamed, told Financial Advisor that LPL might transfer as few as 50 percent of the NPH customer accounts.
“I think they’re going to lose half the reps,” he said. “I would say that about half of the representatives caught in this deal make between $100,000 and $200,000 annually and don’t fit LPL’s profile. They make a nice living, but they’re not going to fit in at LPL. The other ones are being targeted by major players like Cetera and Cambridge, who have already announced that they have picked up substantial groups from this deal.”
Ressler says that it may be at least two years before attrition from LPL begins to slow down.