LPL Financial Reveals Presidential Transition

The LPL board has appointed Dan Arnold, current LPL president, to be president and CEO effective upon current CEO Mark Casady’s retirement. 

Investment advisory firm and independent broker/dealer LPL Financial LLC, a wholly owned subsidiary of LPL Financial Holdings Inc., announced that Mark Casady will retire from his role as chief executive officer, effective January 3, 2017.

At the same time, the LPL board of directors has appointed Dan Arnold, current LPL president, to be president and CEO effective upon Casady’s retirement. Arnold will also join the board at that time, and Casady will continue as non-executive chair of the board of directors until March 3, 2017.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Arnold has served as LPL president since March 2015 and has been responsible for driving the development of the firm’s long-term strategy. With LPL since 2007, he has more than 20 years of industry experience, having previously served as LPL’s chief financial officer and, before that, head of strategy and divisional president of LPL’s Institution Services business.

Jim Putnam, LPL’s lead director of the board, says the choice to go with Arnold as CEO coincides with the leadership team’s commitment to investing in the business, adding that the company will focus on “improving the adviser experience through technology, enhancing capabilities to support adviser growth, and driving operational efficiency” under Arnold’s leadership.

Arnold joined LPL through its acquisition of the UVEST broker/dealer—a provider of investment services to banks and credit unions—which he led as president and chief operating officer. As LPL chief financial officer, Arnold was responsible for formulating financial policy and ensuring the effectiveness of the organization’s financial functions. Most recently, he has led the firm’s focus on business development, existing adviser and institution growth, the client experience, research capabilities and sponsor partnerships.

Since joining LPL in 2002, he oversaw the firm’s transition from a primarily brokerage-based business to a significant provider in the retail investment advisory space.

Rollover and Retirement Transitions Must Be Improved

Little has changed over the decades in the way participants move between plans or complete rollovers into an IRA.

While few could argue the retirement planning industry has not made tremendous strides in getting people involved in regular savings, fewer advances have been made in helping individuals transition between jobs or into retirement, according to a white paper from DST Systems.

The white paper argues there is clearly a need for greater availability of advice and product in this area, yet providers also feel limited in terms of what they can offer.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

“Participants need simplified services to facilitate the transition between plans or to rollover individual retirement accounts (IRAs),” researchers argue. “They need continued follow-up to ensure assets are allocated to meet retirement goals.”

According to DST Systems, recordkeeper and plan sponsor support is essential during critical transition events that will inevitably come up during the typical plan participant’s working lifetime. These events include an anticipated or unanticipated job loss, a death or disability in the family, new relationships, the transition to retirement, etc. 

“Participants who become eligible for distributions from their retirement plans face numerous complicated choices—choices they are often ill equipped to make on their own,” the report explains. “The rollover process is often complicated, time intensive, and inefficient—resulting in bad decisions and worse outcomes.”

DST argues the distribution/rollover decision is the point where participants are perhaps the most vulnerable. In fact, approximately 5% of participants make the decision to cash out their plan balances when leaving a former employer—concentrated among those with smaller balances. This state of affairs “illustrates a need for more participant education about the value of staying invested in the market and of compounding growth of even small investments over the long term.”

The report goes on to suggest that, during life-change events, getting the rollover decision right is of vast importance for participants’ long-term outcomes.

“The choices participants make have long-term implications on their retirement savings … For instance, participants could face potentially serious tax issues if the disbursement of their retirement plan money is handled incorrectly,” the report warns. “Or, they could move their retirement assets into investments that are inappropriate for their risk profile and long-term goals. Others may utilize less effective and more expensive retirement vendors, accounts, or investment products which could dampen over the long term.”

The current structure of the rollover process does little to minimize or mitigate these concerns, the DST research concludes. In fact, the existing “hands-off” rollover model “creates a void of support during a critical moment of need … Where there should be simplicity and ease-of-use, there is frustration.”

The report urges providers to commit to innovation in this area.

“It is largely a manual process that is paper intensive and rarely streamlined,” the report concludes. “Recordkeepers, plan providers, and plan sponsors could lead this change to help improve the rollover and roll-in process.”

The full white paper can be downloaded here

«