Mark Casady will step down as CEO of LPL in January, to be replaced by president and former CFO Dan Arnold, the company said. The company cast Casady’s unexpected departure as a retirement, adding that he will continue as non-executive chairman until March 3.
The changes come amid a variety of challenges for LPL, including increasing competition, pressure to boost its stock price and regulatory scrutiny.
Casady, 56, had been with the company since 2002. During his long tenure, he's taken the company public, and overseen LPL's growth to roughly 14,000 independent financial advisers and $495 billion in brokerage and advisory assets, according LPL.
Casady forecast many more years at LPL in an interview with Financial Planning in 2013, saying: “I’m all of 52 years old. I have a baby face. I have four children. I plan to be working for a long time.”
But the nation’s largest independent broker-dealer has struggled recently. In the past two years, it has been hit with regulatory fines and sanctions, notably by Massachusetts securities regulators.
The company's revenues have also sagged. For the third quarter, the company said that revenues declined 4% year-over-year to $1.017 billion from $1.054 billion for the year-ago period. Profits rose 27% to $51 million, largely boosted by a 41% drop in taxes to $16 million from $27 million.
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LPL also engaged in an expensive stock buyback last December. The company repurchased about 4.3 million shares at an average cost of $44.50 per share from TPG Capital, a private equity firm.
The share price then fell to a low of about $16.50 in February. It has risen over the course of this year to about $40 per share as of early trading Monday morning. And it still trails the levels of March 2014, when LPL shares traded for more than $55 per share.
Last month, reports surfaced that the company could be for sale.
Arnold, 51, has served as LPL's president since March 2015, and has been at the company in other roles since 2007.
When LPL Financial's presumed heir apparent, President Robert Moore, left the company that month, tension had been building in the executive suite, insiders said at the time. And Moore's departure, they added, seemed to be the result of an internal rivalry with Arnold, who had served as LPL's CFO since 2012.
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Arnold will be taking over the company at a critical time. The firm is working on a digital advice platform to better compete with increasing pressure from low-cost robo advisers. It is also preparing for the implementation of the Department of Labor's fiduciary rule.
Jim Putnam, lead director of the board, said in a statement that Arnold was chosen in part because he was a "proven senior leader.”
