The exodus of firms from the National Planning Holdings (NPH) network in the aftermath of its sale to LPL Financial continues, as Scarborough Capital Management, has switched its broker-dealer affiliation to Independent Financial Group from SII Investments.
Hybrid firm Scarborough is based in Annapolis, Maryland. It had had SII as its broker-dealer since 2008. Principal Greg Ostrowski said the firm will continue to operate its own registered investment advisor.
The other principals are Ian Arrowsmith, Jay Sprinkel, Ryan Ansted and Shawn Walker. Scarborough has 10 advisors.
'It was basically a forced option,' said Ostrowski. 'Either become LPL or not. We did a pretty extensive search of broker-dealers and were more comfortable with a smaller, more nimble broker-dealer than the big box approach.'
He said the principals looked at over a dozen possible broker-dealers before going with IFG 'but I don't want to name names.'
Ostrowski said that with IFG his firm will have direct access to the principals of that firm. 'It's the kind of environment we had been used to with SII for the past decade.' He said that in Scarborough's history the firm had only had one other broker-dealer since its founding in 1989, Royal Alliance.
He said before the sale of NPH was announced, Scarborough had no intention of looking for a new broker-dealer.
Scarborough's business centers on helping individual investors with their 401k plans.