Due to a new industry regulation, LPL Financial LLC (“LPL”) is eliminating their independent reps’ ability to act as their own supervisors and imposing a fee increase on those 2,200 one-person shops. In particular, the latest restructuring of compliance and oversight at LPL will add a $4,800 fee increase in 2015 for reps who choose to be supervised by LPL’s home office. Alternatively, reps can choose to be supervised by an existing, qualified office of supervisory jurisdiction (“OSJ”). Those reps will pay 4% to 30% of gross fees and commissions.
2013 has not been the best year for LPL in terms of compliance and oversight. In February, LPL agreed to pay a $500,000 fine and $2.2 million in restitution for failing to properly supervise brokers selling non-traded REITs. Also, in May, FINRA fined LPL $7.5 million for e-mail violations, the largest ever fine meted out by the regulator over e-mail compliance. LPL Spokeswoman, Betsy Weinberger, stated that a coming rule revision by FINRA is one of the factors pushing LPL to make this change.
