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Apr 3, 2007 3:45 pm

Another  LPL thread. At least this is not more about Jones.


I'm looking at them as b/d. Any general comments appreciated.


It seems like they are now growing exponentially. Not necessarily a good thing, but the fact that the payout was increased suggests economy of scale, efficiency, success. And they don't manufacture investment products.


Any thoughts you would be willing to share about LPL as business partner?

Apr 3, 2007 3:59 pm
LPL Financial Services
9785 Towne Centre Drive, San Diego, CA 92121
(858) 450-9606
(858) 546-7851
joinlpl.com
CEO: Mark Casady
Head of recruiting:
Bill Morrissey, EVP, Branch Development, [email protected]
Director of marketing:
Kandis Bates, EVP, Corporate Marketing, [email protected]


Description:
LPL Financial Services is the largest independent-brokerage firm in the United States. LPL provides unbiased research, leading-edge technology and non-proprietary products to independent financial advisers and financial institutions, positioning them as the premier providers of investment advice and services.
 

Raymond James Financial Services, Inc.
880 Carillon Parkway, St. Petersburg, FL 33716
(800) 998-7537
(727) 567-8136
advisorchoice.com
CEO: Richard G. Averitt III
Head of recruiting:
William C. Van Law III, Senior Vice President, National Director of Business Development, [email protected]
Director of marketing:
Mike White, Vice President, Director of Marketing, [email protected]


Description:
Description: Raymond James is different from other firms. We offer a culture of independence in which knowledgeable and caring advisers are uniquely free to thrive. At RJFS, advisers have all the resources of an NYSE firm, leading technology and payout options that fit an individual's business goals. We offer sophisticated marketing support, continuing education and professional development and a host of supporting resources. Advisers also know that Raymond James is a company with strong financials and a management team they can depend on. In this environment, advisers are free to take control of both their business and their lives.
 

Securities America Inc.
7100 West Center Road, Omaha, NE 68106
(800) 989-8441
(402) 384-7589
securitiesamerica.com
CEO: Steve McWhorter
Head of recruiting:
Gregg Johnson, Vice President of Branch Office Development, [email protected]
Director of marketing:
Debra Hansen, Director of Marketing, [email protected]


Description:
Securities America is the only rep-centric independent broker-dealer that can help you acquire and retain ideal clients using proven client acquisition, wealth management and practice management programs. We are continuously developing and rethinking ways to help you run your business more effectively and profitably. See why nearly 1,800 of the nation's finest advisers have chosen us as their business growth expert.
 
http://209.104.135.85/investmentnews/bdprofile/edit/2007/dir ectory.asp?letter=L#L

May the Force be with you
Apr 3, 2007 4:16 pm
silouette:

Another  LPL thread. At least this is not more about Jones.


I'm looking at them as b/d. Any general comments appreciated.


It seems like they are now growing exponentially. Not necessarily a good thing, but the fact that the payout was increased suggests economy of scale, efficiency, success. And they don't manufacture investment products.


Any thoughts you would be willing to share about LPL as business partner?




Only about 2% of the reps qualify for the recently-upgraded payout of 98%.


Purchasing other B/D's, selling off parts to banks, incenticizing reps with $$$ and payout increases, etc...


Big neon sign flashing "FOR SALE" in the near future...

Apr 3, 2007 5:16 pm

It should be noted, Yoda, that the "Description:" is provided by the marketing department of the firm profiled.


One should not think that Investment News made those value assessments.

Apr 3, 2007 5:19 pm
Sampson:
silouette:

Another  LPL thread. At least this is not more about Jones.


I'm looking at them as b/d. Any general comments appreciated.


It seems like they are now growing exponentially. Not necessarily a good thing, but the fact that the payout was increased suggests economy of scale, efficiency, success. And they don't manufacture investment products.


Any thoughts you would be willing to share about LPL as business partner?




Only about 2% of the reps qualify for the recently-upgraded payout of 98%.


Purchasing other B/D's, selling off parts to banks, incenticizing reps with $$$ and payout increases, etc...


Big neon sign flashing "FOR SALE" in the near future...



Actually Sampson, they increased payouts for all reps doing over $200K.  But I'd be willing to bet that less than 2% qualify for the 98% at this time.  Most other b/d's are cutting advisors payouts, so I'd say LPL is doing something rght.


I haven't heard of them selling any divisions off to banks, but they did sell some of their stock to a couple of private equity groups a year and a half ago.


It seems reasonable to expect that they'll go public at some point, if that's your "FOR SALE" sign.  I doubt they'd be bought by another b/d, though.  All the reps are indy, and it wouldn't be too tough for them to find another firm if LPL started making negative changes or were bought by a wire.

Apr 3, 2007 5:21 pm

Two guys on here you should definitely talk to are Indyone and Joedabrkr.  Those guys have both gone to LPL within the last couple of years.  Indyone wrote eleventy kabillion posts about the his whole due diligence process.


Joe, that "eleventy-kabillion" was for you, buddy!

Apr 3, 2007 5:25 pm

Two guys on here you should definitely talk to are Indyone and Joedabrkr.  Those guys have both gone to LPL within the last couple of years.  Indyone wrote eleventy kabillion posts about the his whole due diligence process.


Yeah, and don't forget to ask Spaceman Spiff about Jones while you're at it!


Apr 3, 2007 5:51 pm
FreedomLvr:
Sampson:
silouette:

Another  LPL thread. At least this is not more about Jones.


I'm looking at them as b/d. Any general comments appreciated.


It seems like they are now growing exponentially. Not necessarily a good thing, but the fact that the payout was increased suggests economy of scale, efficiency, success. And they don't manufacture investment products.


Any thoughts you would be willing to share about LPL as business partner?



Only about 2% of the reps qualify for the recently-upgraded payout of 98%.


Purchasing other B/D's, selling off parts to banks, incenticizing reps with $$$ and payout increases, etc...


Big neon sign flashing "FOR SALE" in the near future...



Actually Sampson, they increased payouts for all reps doing over $200K.  But I'd be willing to bet that less than 2% qualify for the 98% at this time.  Most other b/d's are cutting advisors payouts, so I'd say LPL is doing something rght.


I haven't heard of them selling any divisions off to banks, but they did sell some of their stock to a couple of private equity groups a year and a half ago.


It seems reasonable to expect that they'll go public at some point, if that's your "FOR SALE" sign.  I doubt they'd be bought by another b/d, though.  All the reps are indy, and it wouldn't be too tough for them to find another firm if LPL started making negative changes or were bought by a wire.



Exactly.  That tends to keep 'em honest in my opinion.

I've been extremely satisfied with the quality of service and execution on transactions.  The firm's technology is amazing.

Very satisfied.  It's good to be free!

Apr 3, 2007 5:56 pm

I've been with LPL for 7 weeks...moving from Jones.  It has been a very humbling experience.  I thought with 4 years experience in this industry, I would know something.  But this platform is way above what I was using(not a dig, just the truth).  I believe it will be a year before I fully grasp what is offered.  Great support..Great Technology..Makes me feel as if I'm wearing big kid shoes now!!

Apr 3, 2007 9:39 pm

Actually Sampson, they increased payouts for all reps doing over $200K.  But I'd be willing to bet that less than 2% qualify for the 98% at this time.  Most other b/d's are cutting advisors payouts, so I'd say LPL is doing something rght.


That is a really positive trend.


I haven't heard of them selling any divisions off to banks, but they did sell some of their stock to a couple of private equity groups a year and a half ago.


At least some of the rep producers received compensation as part of the move to private equity. 60% is private equity and 40% owned by the founder, but I understand it is a unique arrangement where the founder has some control over the direction. Of course, nothing is permanent.


It seems reasonable to expect that they'll go public at some point, if that's your "FOR SALE" sign.  I doubt they'd be bought by another b/d, though.  All the reps are indy, and it wouldn't be too tough for them to find another firm if LPL started making negative changes or were bought by a wire.


Unless they plan to start manufacturing products, it is hard to see why they would want to kill the golden goose. It seems they are a low cost producer, and of course they are the largest independent - that is the niche, public or private. Financials are already public.


So I guess there are no negatives to LPL, from the readers. Thanks for you insights. 15% growth every year for a number of years is a good thing. The differential in payout/risk/reward for going RIA vs. LPL seem to favor going b/d, unless one wants to make a moral issue out of affiliating with b/d vs. RIA. As far as most clients are concerned, that will be up to their advisor's due diligence.


LPL appears to be a winner.

Apr 4, 2007 12:45 am

This summer will be two years for me and I'm still sipping the Kool-Aid.  I haven't found much of any significance to be disappointed in.  LPL lets me grow the business as I see fit and that suits me just fine.  The recruitment process was fair and honest...if anything, my payout is higher than my recruiter projected...probably because I pay more attention to what I'm doing since I'm paid off the net instead of the gross.  My net last year was 85.34% of gross and this year, thus far, it's running 86.46%, so apparently, things are getting better.  I feel like there is a lot on ythe platform I still don't know, an dthey just keep adding things.  Compliance is reasonable...about the only thing I noticed, particularly early on when you need every dollar, is that it seems like you get nickled and dimed for everything...I lose about 5% of my gross to various charges, subscriptions, E&O, etc.  As I ramp up, this is less important to me, but in the beginning, it was a source of irritation.


Freedom is correct in saying that there is a long thread somewhere on here about my due diligence process between Raymond James and LPL.  In the end, it was a fairly easy call for me, and as far as I can tell, the gap between the two has only gotten larger since I made the call.  Most recently in my mind is RJ's haircutting on VAs.  VAs are only about 10% of my book, but I don't like when a B/D makes a grab for a bigger share of my production in the name of compliance and I suspect it's cost RJ some good producers.


I'd tell you to look at both of them and maybe Commonwealth too...those were the names given to me by several independent sources, bur I'm well satisfied with my decision...good luck with your search.

Apr 4, 2007 10:14 am

I am with LPL been here almost 5 years. Came over from Securities America.


The tech side of LPL seems to keeps up with the times.  


The only problem our office has! Is the the service center some times gives us wrong info for paper work. So we will gather the paper work they tell us to and send it in only to get a notifcation telling us to send in additional paper work. This sets me off!


As far as going public. This is going to happen when I do not know but it does have me a little concerned. But there is nothing I can do about it. If they sell out to any wire house or an insurance company I would leave. NO DOUBT ABOUT IT!  


I would suggest looking at Common Wealth and LPL if you are considering going Indy.   RJ is still a wire house in my opinion.


Good luck.

Apr 4, 2007 2:55 pm

Thank you kindly for your generosity.


due diligence process between Raymond James and LPL.  In the end, it was a fairly easy call for me,


This is valuable, I think LPL not being a product manufacturer is a big plus.


As far as going public. This is going to happen when I do not know but it does have me a little concerned. But there is nothing I can do about it. If they sell out to any wire house or an insurance company I would leave. NO DOUBT ABOUT IT!  


Yeah, let's say LPL sells out to Ameriprise, that would be ironic, you leaving SIA. It seems that would be killing the golden goose, as most every LPL rep is proud of the b/d flexibility, product flexibility, and high payout, even relative to RIA, especially for a mature solo practice ( 40 - 50 m AUM ).


Commonwealth is small, lower payout, maybe more personal. LPL is market leader with higher payout and bigger firm issues.


But, if LPL goes public, and is not aquired by some scmuck outfit, I can't think of any particular downside, other than shareholder pressure, and there must be some of that under the current arrangement.



Apr 5, 2007 8:06 am

I've been with LPL for 3 weeks. Best move I ever made. Great tech, and I really do feel like a client to the firm. Thankful I didn't buy into the RJ pitch. They are so wirehouse it isn't funny.


RJ made a big blunder trying to stay ahead of the compliance game with annuities. After 3 years of threats I don't see a big change in the annuity business. This will cost Rj about 20 mill to the bottom line. Big mistake.

Apr 5, 2007 10:29 am

Even in their advertising, RJ seems very corporate. It just feels like annuities and Florida.

Apr 5, 2007 11:41 am

Silouette, I work my book through RJ and use very few annuities. I love the fact that our business is not focused on the annuity side. If you see the post Yoda provided you will notice almost HALF of LPL's brokers earn less than 100 GROSS. 


I know you have very high intellectual skills by reading your posts. How do you explain those numbers? From a country boys perspective,  we call that the shotgun approach. Almost like Edward Jones.  I know 8 successful or seem to be successful LPL brokers, some I would do business with, some I wouldn't. Fact is LOW producers will drag a company down over time.


My reasoning is you can be successful at many firms. But some Indy firms want to attract a certain client. RJ just raised its minimums effective later in the year to 90 gross minimum. They will not reach 8000 brokers before LPL and may never. But they will be able to narrow there expertise to a certain client.


LPL and RJ are the two top Indy firms in my opinion. I chose RJ for their fundamental analysis on stocks, I then screen using technical analysis (X O's).  So it has been a great fit for myself. Although I would understand someone who uses annuities often not picking RJ.


It's Great to have choices in life. But when people raise there hands and say, "I." That persons business model may work best with that firm or it could be the only firm that would hire him or her.

Apr 5, 2007 2:26 pm

The only caution I would add on LPL is the conception that they don't have proprietary products etc... certainly this is true but what they do have and contrary to what all of you may say, they definitely incent you to use their proprietary platforms.   Good bad or indifferent, it's an individual decision.  I personally have been very happy here and have no real complaints.  But lately, and maybe it's because of all the acquisition etc things that been happening, the service center has slipped both in accuracy of info and in time to answer.  I am a bit concerned as they continue to grow they will also become a bit more restrictive on things - you can only manage and supervise so much and I can already see where they have built a sand box that they want to keep us all in to ease that part of business, trying to get out of that is when you run in to a bit of trouble. 


But again, I have been very happy and offer no real complaints. 


Just out of curiousity Bamzor - what does 50% of advisor doing north or south of 100k have to do with what I am doing locally?  I look at that in two ways: 1.  LPL is not telling me who I have to bring into my business if I wish to grow horizontally or vertically (like RJ and Commonwealth are) 2.  They are profitable because of their business model on reps that are doing below $100k which to me is pretty telling on how efficient that can be for me who is doing close to 5x that!


Hey if it works for them, doesn't affect what I do on a day to day and local basis - it's just make up on a pig then.

Apr 5, 2007 3:34 pm

Couple of great companies, LPL and RJ.


Wow, couple of great posts, Bam and CS.


Bamzor, you did shake me into wakefulness, I feel I need to do some due diligence on RJ for THIS reason, as inferred a bit in the previous two posts:


Being left alone by your b/d is one thing. In fact, my current b/d does a pretty good job of that, in fact, payout is not the big issue either.


Rather, how can one become inspired  and motivated to achieve full potential, while taking full responsibility.


So something clicks a little here, and RJ "feels" (based on almost no knowledge - just general industry exposure over many years) a little more " type A " - frankly ( and for solely for the benefit of any other reader who ponders the big question) - now I am intrigued, because really I am a little more laid back, but also type A.


And as I think about it, what I would really like to do is come into the office for several hours each day, like I do now, and just talk to clients on the phone. But coming from a "planning" background, we are not talking wirehouse, so much as maintaining this quasi independent status.


CS, good stuff.


You mention LPL apparent efficiency, and I think that is key, since margin compression is a huge fact of life in our industry now.


Service is everything, so if it slips, due to growth, or some kind of cost cutting ( appease future shareholders and so on) you lose the benefit.


Sure, we can all move our books - don't imagine we want to do that too often.

Apr 5, 2007 4:12 pm
csmelnix:

Just out of curiosity Bamzor - what does 50% of adviser doing north or south of 100k have to do with what I am doing locally?  I look at that in two ways: 1.  LPL is not telling me who I have to bring into my business if I wish to grow horizontally or vertically (like RJ and Commonwealth are) 2.  They are profitable because of their business model on reps that are doing below $100k which to me is pretty telling on how efficient that can be for me who is doing close to 5x that!


Hey if it works for them, doesn't affect what I do on a day to day and local basis - it's just make up on a pig then.



Csmelnix, Both my granddad's were farmers (independents) and members of the same CO-OP (Firms), both mainly used rice, soybeans, cotton. My mothers dad had 90% of his crops with irrigation. My fathers dad had about 50% of his crops with irrigation, the other 50% without relied on rain and pumping out of ditches or creeks. My mothers dad had a lot less worries, especially during drought years. While my fathers dad would at least pay the bills with that 50% having water, but that side that didn't have water caused a lot of worries, especially on drought years (the creeks and ditches would be dry).


So what does this have to do with you? Nothing, you have water for your fields. But as a company LPL is like my granddads. One side is like my mothers dad, he didn't have to worry that much. The other side was like my fathers dad. He worried a lot.


I promise you my Fathers dad would have given he left nut to have water on the other side.  As a growing company I would definitely want to have water for my new fields.

Apr 5, 2007 4:52 pm

Nice analogy.


I love a good story.


Speaking of growing things, I tell clients and prospects (my focus is golf and money):


" I protect and grow money for my clients. Money is a lot like grass.


The golf club is in the grass growing business. It takes watering, fertilizing, and lots of cutting. You can grow good grass in mainly just sand in those conditions.


You need a good greenskeeper just to protect the grass - not overfertilize, plug and sand at just the right time the spring, it comes down to good planning and flawless execution, but it is basically a simple business.


Of course, we need to protect your money, first and foremost. For your money, not only is there plenty of water, fertilizer and cutting - but also, lots of organic matter, rich, natural fertilizer - that would be my experience! We also call that diversification ....


Protecting and growing money is simple, but not easy. Best case scenario, you'd find an advisor you could work with over many, many years - kind of like a really good golf teacher or greenskeeper your best foursome buddies ...