SAN DIEGO — Ask any of the principals affiliated with XCUCapital Corp., a credit union homegrown broker-dealer andinvestment advisory firm, for the factors that led to its demiseand most agree on one reality: lack of scope and resources tocompete.

After a 20-year run, XCU Capital slipped under the radar andinto obscurity when in August 2007 it was acquired for $3.62million by LPL Financial Corp., an independent broker-dealer giantwith more than 800 clients and $235 billion in assets undermanagement (CU Times, May 7, 2008). All but one of its 24 creditunions made the transition over to LPL convinced that aligning withthe investment conglomerate would not only bring more technology,products and services but a proven track record of serving themovement with a current roster of more than 200 credit unionclients.

“As a broker-dealer, you're forced to spend money on technology.The most costly thing is ensuring you're in compliance withregulations from [Financial Industry Regulatory Authority] …. TheSEC requires you to monitor your business closely. All that fallson technology,” said Mark Hoaglin, XCU Capital's former CEO, whowas hired by LPL Financial Institution Services as senior vicepresident of credit unions, a new role created to oversee thedivision charged with building more alliances within themovement.

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