Displaying items by tag: IBDs

(Chicago)

Earlier this year LPL launch its new Strategic Wealth Services program. It is a special program designed to help advisors with all aspects of setting up their own business, including everything from finding an office to setting up a tech stack to executing payroll. Best of all, LPL promises to do this with “zero out-of-pocket costs for the advisors”. Despite the pandemic, the program seems to be doing well. Once advisors from a Wells Fargo team that recently departed for LPL commented on the program that “LPL’s new affiliation model really appealed to me. It allows me to be an independent advisor but solves for the business operational needs”.

FINSUM: This is a smart program. It appears specifically designed to address the multitude of anxieties advisors feel when moving to an IBD.

(New York)

LPL has been a true leader on the recruiting front in 2020. One should expect no less from the largest independent broker-dealer. As one of their new initiatives, they have just launched a program—called the “independent employee” model—to try to attract new advisors who want some of the benefits of being independent, but also want to be a W-2 employee. Such models have been around for a long time, and are most prevalent at Raymond James and Ameriprise, but LPL thinks there is an opportunity to scale it up. The program is designed to appeal to wirehouse advisors who like being W-2s but want to earn higher payouts. Payouts for the program range from 50-70%.

FINSUM: If an IBD is a halfway house between being a wirehouse advisor and being an independent RIA, then this is a one-quarter-way house. It does seem like this might be a smart move—W-2 benefits with higher payouts.

(New York)

COVID has affected the wealth management business as deeply as any other industry. Disruption has arrived, but opportunity has also come with it. But how will it impact the recruiting environment? By all accounts, it looks like the next six months or so will be an ideal time for advisors to move networks/companies. Firms are loosening purse strings and are jumping head first into recruiting again as periods of upheaval like COVID have usually led to increased movement among advisors. That means advisors are likely to get bigger checks for moving now than they would have earlier this year. The lack of conferences also means they are putting more money into other efforts to reach advisors.

FINSUM: Generally speaking, the COVID environment seems to have been beneficial for advisors. New efficiencies and work/life balance have been found as a result of working from home; deeper bonds with clients have been formed during the crisis; and there are increasing opportunities for recruiting. The speed of the market recovery has also been beneficial.

(New York)

New data is out showing which independents are gobbling up the most new recruits in the wealth management space. The overall picture emerging is that while April was a very slow month for changes, Raymond James and LPL are striding ahead of the competition through acquisitions and advisor recruiting. LPL has gotten 59 new recruits to join this year, while Raymond James has managed 20, worth $4 bn and $2.8 bn in AUM respectively. Some usual suspects have been absent so far this year. For instance, Advisor Group has lost more than 25 advisors to LPL in 2020 without announcing a single new advisor joining the network.

FINSUM: LPL and Raymond James have done a great job keeping their recruiting wallets open during this tough time. We expect the relationships they are building right now will keep their pipeline strong for the rest of the year.

(New York)

LPL has debuted a new model for breakaway advisors. The firm has decided to act on something long known—the logistics for setting up a new independent business are a major hurdle for wirehouse advisors who are considering breaking away. Accordingly, they have set up Strategic Wealth Services, which will handle all office set-up logistics for LPL and make sure there are zero out-of-pocket costs.

FINSUM: Kestra has also launched a similar service. Honestly, sounds like a smart play to smooth the transition, but watch for the “catch”, which isn’t apparent yet in what we’ve seen on this.