Thursday, December 1 2022

LPL Financial is launching a “partial book sale” service that helps advisers control their clientele and focus on those who will fuel the growth of their practices, firm executives said Wednesday.

The service will help move accounts that are smaller, less profitable or potentially ill-suited to an advisor’s practice into a digital relationship that LPL manages and is part of the broker’s overall strategy to add new advisors and deepen their relationship with its existing advisers. .

The company is embarking on a “horizontal expansion strategy” to expand its addressable market through its multiple affiliate models as well as a “vertical integration strategy” to provide solutions that help advisors manage their practices more efficiently, said the President and CEO Dan Arnold Wednesday.

Speaking at LPL’s 2022 Investor Day yesterday, Arnold said the company’s plan to expand across all types of advisor models allows the company to ‘potentially’ compete for all 300 000 advisors to market by creating more flexibility and options, so an advisor can create the perfect practice for themselves on our platform.

LPL has six Affiliate Models as listed: Business Advisor under Shared Form ADV, W-2 Model, 1099 Model, Registered Investment Advisor Option, Hybrid RIA Option and Financial Institutions Channel .

Deepening the tools, systems and support advisors rely on will help LPL stand out and “ensure that this advisor can run a successful platform better on our platform than anywhere else,” said said Arnold.

LPL launched accounting services and paraplanning services earlier this year.

Last week, LPL began rolling out a service to help advisers — regardless of their client’s demographics, size or specific needs — looking to reshape their business portfolio, according to Aneri Jambusariaexecutive vice president of the company’s services group.

“We have created a partial book sale offering where LPL will acquire these typically smaller accounts from our clients as a service to them and then we will provide these end clients with personalized advice and services from our team of investor-focused solutions, which is hosting a virtual advisory team,” Jambusaria said at the Investor Day. Accounts will generally be those with less than $100,000 in assets, and LPL will pay 1.5 times recurring revenue to advisors who pass it on, according to an Investor Day slideshow.

Companies that subscribe to these services tend to grow 28% faster than their peers, according to the presentation.

The transfer process is enabled by “an end-to-end digital experience that helps advisers identify, process and transfer these households to LPL digitally,” she added.

The partial book sales service added this month, accounting added in September, and paraplanning service added in April join LPL’s other outsourcing offerings, including M&A support, digital office, insurance plans, marketing solutions, CFO solutions and administrative solutions. This litany of services has grown since 2018, when LPL first added marketing support and CFO. The same goes for the number of advisers who use them. By the end of the third quarter, approximately 2,900 advisors, or 14% of those who work with LPL, had signed up for the services, the pitch deck says. This is an increase from 150 advisors in 2018.

LPL’s strategic priorities for 2023 for the services it offers are to grow its customer base, launch new services and scale existing ones, and deepen relationships with the advisors who use them, according to Jambusaria.

Jambusaria says customer growth is LPL’s top priority. “One of the main ways we will achieve this is our second priority, which is to launch new services. We believe that continuing to develop new services within this portfolio will help us unlock additional customers in our ecosystem and drive the third priority, which is deeper relationships with those customers,” she said during Investor Day.

“We will focus on expanding the value propositions of our existing services as well as ensuring that advisors and businesses that use our services have the ability to leverage multiple services where it makes sense,” said she added.

Advisors who discover LPL will play a key role in achieving these goals, according to Jambusaria. She said the company offers exciting opportunities for newcomers.

“One is the affiliate models: especially for advisors who come to LPL and are looking for a more supported version of independence, we embed our services into that experience,” Jambusaria said.

“Separately, we also see the experience of joining LPL as a great point to start adopting services, whether it’s paraplanning or doing a partial book sale or starting to use the accounting service. We We are increasingly positioning our services at the point of transition to the LPL, and our perspective is that this will help drive adoption,” she said.


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