(Bloomberg) — Dan Arnold appeared so completely odd on the helm of LPL Monetary Holdings Inc. that one business publication complimented him for his “vanilla imaginative and prescient.”
So the abrupt firing this week of the 59-year-old Arnold, who took over as chief government officer in 2017 and as soon as advised the agency’s monetary advisers that his mission was about “caring for you, so you’ll be able to handle your purchasers,” is proving a shock.
The corporate has mentioned little past a press release that charged him with violating LPL’s “dedication to a respectful office.” It declined to elaborate past that. Arnold didn’t reply to requests for remark.
With an entrepreneurial background and many years of expertise, Arnold championed the thought of placing prospects first, with long-term progress to observe. He began out as a managing director when his earlier employer was taken over by LPL and moved up the ranks, gaining a fame as an even-keeled chief who oversaw a close to tripling of belongings and a hovering share value.
“Our impression is that he was usually effectively appreciated internally and led the enterprise by means of a interval of success,” Residents JMP Securities LLC analysts led by Devin Ryan mentioned in a be aware to purchasers Wednesday morning, calling it “an unlucky state of affairs for the corporate” that can go away buyers asking questions.
The termination of Arnold — together with the lack of severance advantages and computerized forfeiture of excellent fairness awards, each vested and unvested — adopted a probe by an outdoor regulation agency and the advice of a particular board committee, which discovered he made statements to staff that violated LPL guidelines. The agency didn’t disclose what he mentioned.
“LPL’s code of conduct requires each worker, regardless of their title, to foster a supportive {and professional} office and present respect to one another, our stakeholders and the broader neighborhood,” Chair James Putnam mentioned in a press release. “Mr. Arnold failed to fulfill these obligations.”
Arnold earned a bachelor’s diploma in electrical engineering at Auburn College earlier than going to Georgia State College for his grasp of enterprise administration. He grew to become a co-owner of a bar in Atlanta whereas he was attending grad college, working there as a bartender with mates.
“As a result of we thought that was a cool thought — I’m not so positive it was,” he mentioned in a 2021 interview. “It was enjoyable.”
Firm Acquired
He joined LPL in 2007 after the agency acquired UVEST Monetary Companies, the place Arnold had served as president and chief working officer. He grew to become chief monetary officer at LPL in 2012 and was named the agency’s president three years later, given the duty of driving its long-term progress technique in addition to overseeing the corporate’s choices for its purchasers.
Courtroom information present no historical past of prison or civil proceedings towards Arnold in San Diego County, the place he lives, and the Monetary Trade Regulatory Authority’s BrokerCheck platform exhibits no complaints towards him.
Arnold raked in nearly $17 million in compensation awards final 12 months, together with a higher-than-targeted bonus. His whole compensation awards jumped 23% final 12 months, with the lion’s share in inventory incentives, in response to firm filings.
On the finish of February, Arnold had restricted and efficiency inventory awards value roughly $28 million at their goal stage, with the chance to earn greater than $50 million value of shares, in response to the phrases of the awards disclosed within the agency’s annual proxy assertion.
In response to public information, Arnold purchased a mansion within the San Diego neighborhood of La Jolla for $11.4 million in 2021. The seven-bedroom, 10-bathroom with Spanish tile roof has panoramic views of the Pacific Ocean, a pool and a sauna. The hillside house’s three tales are reachable by elevator.
Federal Election Fee receipts present that Arnold gave $5,000 final 12 months to LPL’s political motion committee, which has contributed to dozens of lawmakers on either side of the aisle. A June 21 donation of $5,000 went to the marketing campaign of Republican Home Speaker Mike Johnson, whereas a June 20 donation of $2,500 went for the re-election of Congresswoman Terri Sewell, an Alabama Democrat.
Agency’s Development
Whereas serving as CEO, Arnold steered important progress at LPL. The corporate’s whole brokerage and advisory belongings practically tripled from $509 billion within the quarter earlier than he took over as CEO to $1.5 trillion within the second quarter of this 12 months. He’s overseen a sixfold bounce in LPL’s inventory value since taking up at the beginning of 2017.
He additionally oversaw a rise in adviser rely of greater than 60% over the identical interval, and has typically spoken in regards to the significance of furthering the agency’s mission and sustaining a powerful firm tradition. LPL provides monetary advisers other ways to affiliate with the agency, and serves greater than 23,000 in response to the assertion asserting Arnold’s termination.
“I grew to become an actual believer that tradition eats technique for breakfast,” Arnold as soon as advised CEO Journal. “With a view to drive success over the long run, our technique and talent to execute have to take a seat atop a powerful cultural basis and be complemented by the most effective expertise.”
‘Quiet’ Demeanor
He’s additionally spoken in regards to the significance of creating a “mission-driven tradition” with an emphasis on placing purchasers and their wants first. His “quiet” demeanor has been seen as contrasting with the “boisterous” strategy of his predecessor, Mark Casady.
However in LPL’s most up-to-date earnings name, in July, Arnold made feedback that veered away from his staid fame, calling out a few of the agency’s collaborators. The corporate discovered that just a few corporations had been “strategically misaligned” with LPL’s mission as a result of “they had been limiting advisors’ means to decide on how and the place they do enterprise,” Arnold mentioned on the decision.
“That posture is in stark distinction to our core rules of advisor independence,” Arnold mentioned. “And in consequence, we now have resolved to separate from these relationships.”
A number of days later, Advantage Monetary Group LLC, a non-public equity-backed investment-advisory agency overseeing about $12 billion in consumer belongings, ended its relationship with LPL, in response to Citywire. A consultant for Advantage didn’t instantly reply to a request for remark.
Now Arnold is out of a job, and the corporate is left to seek for its subsequent CEO. In the interim, management duties will fall to Wealthy Steinmeier, who beforehand served as the corporate’s chief progress officer and was tapped on Tuesday to grow to be interim CEO.
“The board has each confidence in Wealthy and LPL’s seasoned administration group to make sure a easy and secure transition,” Putnam mentioned within the assertion.