Oppenheimer Says It Purges Problem Producers
Oppenheimer & Co’s broker headcount fell 7% over the past 12 months, reflecting what the New York-based company characterizes as a pruning of brokers with compliance issues.
Oppenheimer, which in recent years suffered a spate of regulatory fines and disciplinary actions, ended its third quarter with 1,177 brokers, down from 1,262 a year ago, according to its earnings report issued Friday. In the three months ending September 30, it lost a net 22 brokers.
“The decline in financial advisor headcount has been a result of the company’s attention to productivity and compliance, leading to attrition of less productive advisors and the elimination of financial advisors who could lead to future compliance-related issues,” the company wrote.
The purge follows a second-quarter shakeup in which Oppenheimer replaced 14 of its 90 retail branch managers after a “major review” by its board’s compliance committee. The company also knocked chief executive Albert “Bud” Lowenthal’s salary down to $1.36 million from $3.95 million. Though Oppenheimer is publicly traded, Lowenthal and his family control policy through their ownership of voting shares.
Securities Litigation and Consulting Group, an expert witness consulting firm, ranked Oppenheimer seventh on a list of “firms most harmful to investors” earlier this year, based on the percentage of brokers with regulatory “disclosure events” or histories of being fired.The study found that 12.45% of Oppenheimer’s registered representatives since 2000 had at least one disclosure event while 4.15% had been hired despite being terminated by another broker-dealer.
“I have heard that our study and [a separate one by economists at the University of Chicago and the University of Minnesota] has had an impact [on] bad firms like Oppenheimer,” Craig McCann, owner of SLGC, wrote in an email.“There are lots of bad brokers left at Oppenheimer.”
An Oppenheimer spokeswoman declined to comment.
A review of the Financial Industry Regulatory Authority’s BrokerCheck database found several Oppenheimer advisors with multiple complaints . One in Fort Lauderdale, Fla. had six disclosures and two terminations over his 31-year career,.
Another in Saddle Brook, N.J., accrued six disclosures over 26 years, including a termination as recently as last year by Wells Fargo Advisors.