The independent broker-dealer business model is apparently too "broken" for LPL's top producer to make it happen. Ron Carson is coming home with his $2.7 billion in assets.
Carson left LPL in May to start his own RIA and eventually a broker-dealer of his own.
People are citing "technology" here but that's probably only part of the equation.
The technology Carson wanted was to support his goal of creating at least one in-house investment fund for his clients. He wanted a proprietary portfolio product as a differentiator -- something HNW investors couldn't get anywhere else.
LPL has been aggressively building out its overlay management technology, so it may once again be able to provide Carson everything he wants.
With that proposition in mind, starting a new one just to provide a full in-house platform just doesn't make sense.
Carson could see that, which is why he's refusing to buy an existing firm to get the capabilities he wanted. As he says, there's no point in inheriting the liabilities of an established operation -- and at this point, the advantages aren't that compelling.
This is being reported as a family reunion. It is that, but in the bigger picture, it's also a story of a channel approaching a crisis point. We'll probably see more bad news for independent broker-dealers in 2012, and at least a few closures.