$535M team returns to LPL after trying Wells Fargo's indie channel

After eight years at Wells Fargo's independent channel, a 12-person advisory team managing more than $500 million is returning to LPL Financial.

Harbor Lights Financial Group, a Manasquan, New Jersey-based firm managing $535 million in advisory, brokerage and retirement assets, left LPL in 2016 to join Wells Fargo Advisors' independent channel, known as FiNet. Doug Lockwood, a managing partner and founder of Harbor Lights, said the team is returning in large part because of the help LPL can offer in selling the practice when he and his colleagues want to retire.

"Their acquisition program was critical," Lockwood said. "When we're ready to retire, we can just push a button and get out of the business and sell it to our junior partners. That will ensure we get compensated and our clients and staff get taken care of in the long run."

Lockwood said he also talked to a litany of private equity firms about possibly buying Harbor Lights. Private equity buyers have been driving much of the consolidation in the independent advisory and broker-dealer industries in recent years.

"But we're growing our assets at 25% a year," Lockwood said. "So why stamp a number on us now in this market cycle, when you can later push a button and a sale would happen very quickly in-house?"

Scott Posner, LPL executive vice president of business development, said it's "an honor" that Harbor Lights chose to affiliate with LPL a second time.

"Our entire focus is to support advisors and make it easier for them to provide personalized financial guidance and differentiated service experiences to their clients," Posner said in a statement.

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Lockwood declined to comment about Wells Fargo, other than to say his team wanted to be somewhere where "they could work efficiently without having to fix their problems." Wells Fargo declined to comment.

Harbor Lights Financial Group was founded in 1994 and joined LPL the first time in 2008. It started by providing retirement planning to employees of large companies and has since gone on also to work with high net worth clients.

Lockwood said Harbor Lights left LPL in 2016 in part over concerns that he and his colleagues were going to need substantial help complying with an Obama administration rule that would have given most advisors managing retirement plans a fiduciary duty to look out for their clients' best interests. That rule was eventually vacated by a court decision.

Legal challenges are now raging over a similar fiduciary proposal the Department of Labor approved in April. Lockwood said his and his colleagues' compliance anxieties have become muted in recent years.

"We are all accustomed to the DOL now," Lockwood said.

Harbor Lights consists of its three founders — Lockwood, Rob Tendler and Ken Roberts — as well two other financial advisors, David Scureman and Jonathan Shippee, and Chief Operating Officer Steve Catapano. The firm also has five office support members on its staff.

Lockwood said he and his clients have been impressed by the growth LPL has shown in recent years. In its latest quarterly earnings, the largest U.S. independent broker-dealer reported having more than 23,000 advisor affiliates, a number up 7% year over year, and $1.5 trillion in client assets, up 21% year over year.

Lockwood noted that he's in his 50s and his partners are in their 60s. As they contemplate retirement, they want a home where they felt assured they wouldn't have to move again.

"We've hooked ourselves to their train because we think it will allow us to provide our clients with the best platforms, the best technology and give us the best opportunity to provide service at the highest level for the rest of our careers," he said.