The US financial advisory sector is digesting the news that the president and CEO of the country's largest broker-dealer has been sacked following comments he made to staff that the firm said breached its code of conduct.

LPL Financial, the country’s largest broker-dealer, stunned the financial advisory industry late yesterday afternoon when it fired its president and CEO, Dan Arnold, for “violating LPL’s commitment to a respectful workplace.” 

Arnold was “terminated for cause on the recommendation of a special committee of directors in the course of an investigation by an outside law firm, which found he made statements to employees that violated LPL’s code of conduct,” according to a statement issued by the company’s board of directors.

“LPL’s code of conduct requires every employee, no matter their title, to foster a supportive and professional workplace and show respect to each other, our stakeholders and the broader community,” James Putnam, chair of the board of directors, said. “Mr Arnold failed to meet these obligations.”

Steinmeier in
Rich Steinmeier, 50, the company’s chief growth officer, was named interim CEO effective immediately. 

Prior to joining LPL in 2018, Steinmeier held senior leadership positions at UBS Financial and Merrill Lynch and also worked as a consultant for McKinsey & Company. He has an economics degree from the Wharton School at the University of Pennsylvania and an MBA from Stanford University.

Arnold, 59, joined LPL in 2007 as a divisional president of institution services after spending 12 years leading UVEST, a broker/dealer that was acquired by LPL. He was named LPL’s chief financial officer in 2012, president in 2015 and succeeded Mark Casady as CEO two years later. 

No severance benefits
Arnold received total compensation of $16.9 million in 2023, including a base salary of about $946,000 and stock awards totaling $11.9 million, according to company filings. 

As a result of his termination, Arnold isn’t entitled to receive severance benefits, and his outstanding equity awards, whether vested or unvested, are also subject to automatic forfeiture, according to a filing with the Securities and Exchange Commission. Arnold has also resigned from LPL’s board of directors.

Arnold’s popularity among the company’s 23,000 advisors and record of business success made his ouster all the more shocking. LPL’s stock gained more than 480 per cent and LPL's total return to shareholders was 537 per cent during his seven-year tenure.

Arnold also presided over unprecedented growth, fueled in part by acquisitions, including National Planning Holdings, Crown Capital Securities and Boenning & Scattergood.

Just yesterday the company announced that it had closed an $805 million acquisition of rival brokerage Atria Wealth Solutions, adding around $100 billion in client assets and 2,400 advisors.