SAN DIEGO -- Broker-dealer giant LPL Financial Corp. quietly bought XCU Capital Corp., the credit union-owned broker dealer that served more than 30 credit unions, in August 2007.
According to SEC company filings, LPL Holdings Inc., a wholly owned subsidiary of LPL Investment Holdings Inc., entered into an institutional transfer agreement with XCU Capital on Aug. 9, 2007, to transfer and assign existing institutional relationships for a total purchase consideration of $3.62 million.
LPL Financial Corp, an independent broker-dealer, is considered to be the largest of its kind in the country with more than 800 clients and $235 billion in assets under management.
Founded in 1987 by then Xerox FCU, (now Xceed Financial CU), Carlsbad, Calif.-based XCU Capital served 30 credit unions with approximately $2 billion in assets under management. Xceed subsequently sold its stake in the company and remained on as a client. Several high-profile credit unions were XCU Capital clients, including the $6.6 billion The Golden 1 CU and $1.3 billion SAFE CU, which was also a shareholder. XCU Capital offered CUNA Mutual Group's debt cancellation products.
Heather Randolph Carter, vice president of corporate marketing at LPL Financial, said 23 credit unions converted to LPL Financial from XCU.
Former XCU Capital CEO Mark Hoaglin is now the senior vice president over credit union relationships for LPL Financial. Hoaglin said the acquisition was "in the best interest of [XCU]'s clients.
"With approximately 200 credit union partners, LPL Financial has a demonstrated commitment to the credit union industry that was very appealing. They have since furthered this commitment by establishing a credit union advisory council for these important clients," Hoaglin said.
For LPL Financial, he added, "the transaction was an excellent way to further establish its leadership in the credit union market segment while gaining some very successful new credit union partners."
One credit union CEO, who spoke on the condition of anonymity, said the credit union chose not to stay on as a client because it didn't know much about LPL.
--msamaad@cutimes.com
