Some advisors have jumped ship from independent broker/dealer Securities America for LPL Financial (NASDAQ: LPLA) following news that parent Ameriprise Financial (NYSE: AMP) would sell SAI. Most recently, a $420 million team in Cornelius, N.C., Cornerstone Financial Partners, which includes four partners, have made the move and formed their own registered investment advisory firm under LPL’s hybrid platform.

Bobby White of Reliance Financial Group in Birmingham, Ala., and Donald Patrick of Integrated Financial Group in Atlanta, Ga., also made the move recently. White, who has about $54 million in AUM, according to Meridian-IQ, also formed his own RIA under LPL’s hybrid platform. Patrick's firm has about $1 billion in assets, with about $12 million in GDC.

This year, Securities America has been mired in litigation and claims against it related to allegedly fraudulent private placements from Medical Capital Holdings and Provident Royalties the company sold to investors. However, a court recently approved a $150 million class action settlement with investors, which hopefully brings the debacle to an end. Following the private placement lawsuits, Ameriprise announced its intent to sell Securities America in April.

When Ameriprise made the announcement, industry sources predicted that advisors would scatter, especially larger producers, before a buyer was revealed. Since then, a number of reps have departed for other firms.

Aside from LPL, Commonwealth Financial Network and Cambridge Investment Research have picked up some large producers. Since April, Cambridge has lured SAI advisors representing production of $3.8 million, and it expects to add other SAI reps with a total production of $8.5 million by the end of the third quarter. Commonwealth, meanwhile, announced it added former SAI advisors from Tonkinson Financial, Capital Wealth Management, and Smallwood Capital Management, who manage over $400 million in assets combined.

Larry Papike, founder of Cross-Search, said there are more reps in the pipeline going to LPL. LPL, Commonwealth, and Cambridge are the three players in the marketplace that are doing well in capturing SAI advisors. LPL has been aggressive with its transition package, and has even lowered its transaction charges recently to $9 from $15, while SAI’s ticket charge is $25, Papike said. The fact that LPL is a large, stable, and public company that’s been around for a while also helps to lure advisors, he added.

Craig Rubrecht, a partner at Cornerstone, which produces $5 million annually, said his team had been talking about starting their own RIA for a while, and when SAI got involved in the lawsuits, they started looking around for another b/d that could support the firm’s own RIA as well as its b/d business. LPL was a good fit, not only for its hybrid platform, but also for its size. Rubrecht said the team wanted to be with a large player, one that would likely be on the side of buying a firm, rather than being acquired. When the sale was announced, their Plan B became their Plan A. The SAI leadership team was focused on putting out fires, and rightfully so, Rubrecht said. With all that change going on, it was time to go.

“We decided we’d rather be in control of the change, rather than someone else being in control,” Rubrecht said.

That said, SAI has been easy to deal with, and is still paying out the firm’s commissions, he said.

White said he had decided to start his own RIA about two years ago, but that was put on hold because SAI was not as RIA-friendly. After doing his due diligence on hybrid platforms, he found that LPL was the best fit, primarily because the process of going hybrid was more seamless, as it’s all under one platform. The bad press around SAI did speed up the process of moving to another firm, he said. Also, White’s team was one of the largest at SAI, while at LPL, there’s room to grow and the firm has had lots of experience transitioning large teams. “They’ve been there, done that.”

There has been no definitive word yet on who will be the buyer for Securities America, but Ameriprise has said an announcement is coming in the near future.