Mark Casady is retiring as CEO of LPL Financial LLC and will be succeeded by LPL President Dan Arnold, LPL announced Monday. Arnold will remain president and join the LPL board of directors. Casady will remain on the board as non-executive chair until March 3. The transition is effective January 3.
The timing of Casady's retirement struck observers as strange because LPL, the largest independent broker-dealer and registered investment advisor in the U.S., is exploring strategic alternatives, including a potential sale. Companies that are restructured or sold frequently switch CEOs after the change occurs, but rarely implement it in the middle of the process. Indeed, the timing prompted some observers to speculate that the move might be triggered by a disagreement between Casady and other board members over the direction in which various strategic options should be evaluated.
LPL is working with investment bank Goldman Sachs Group on a sale process that has attracted other companies and private equity firms, Reuters reported in October. The move comes as LPL faces an adverse low-interest rate environment and higher costs for regulatory compliance, forcing it to lower commissions on some high-fee investment offerings and invest more in technology infrastructure and personnel.
LPL angered shareholders last year when it repurchased about 4.3 million shares from its largest shareholder, private equity firm TPG, at a premium of about $44 a share. Corporate America has initiated wave after wave of stock buybacks in recent years, but the vast majority have been conducted in the open market, benefiting all shareholders in theory.
Casady joined LPL in 2002 and took over as CEO in 2004, when it was acquired by two private equity firms, Hellman Friedman and TPG. The transition announced today is part of LPL’s succession plan, the company said.
"As a best practice, the LPL board of directors has had a leadership succession plan in place for some time. As part of that succession plan, the board has appointed current LPL President Dan Arnold to be president and CEO," the company said in its press release.
Arnold has served as LPL president since March 2015 and has been responsible for driving the development of the firm’s long-term strategy for growth, according to LPL. 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.
In February at a time when many independent broker-dealers were lobbying to short-circuit the Department of Labor's pending fiduciary rule effecting retirement accounts, Arnold told Financial Advisor that LPL was embracing the rule and incorporating it into its operations. Following the election of President-elect Trump, the rule's future is uncertain.
“In selecting Dan Arnold, the board has demonstrated its confidence in a proven senior leader who has played an integral role in creating a talent-rich organization that is gaining momentum within a promising business environment,” Jim Putnam, LPL lead director of the board, said in the press release.
Arnold joined LPL through its acquisition of the UVEST broker-dealer, a provider of investment services to banks and credit unions, where he was 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.
As LPL president, he has led the firm’s focus on business development, existing advisor and institution growth, the client experience, research capabilities and sponsor partnerships, LPL said.