I was wondering how the LPL payout grid works for SAM advisory business. All their website says is that it is paid out up to 98%. Are there any advisors out there that can shed some more light on this for me? Exactly how does it work? Also what is the breakdown of fees at LPL? The website only cites the monthly fee of $125...is that it? No E&O? Are there any additional mandatory or voluntary technology fees?
I also heard somewhere that it is highly encouraged that when you register your own office with LPL that you become an OSJ branch. Is there anyone out there who decided to office within an existing OSJ branch (or decided to use an existing LPL branch as an OSJ but still maintained your own office)? If so why did you decide to go that direction and what sort of payout reduction did you take for doing so?
First of all are you blind? If not are you mentally handicapped? If not you need to look better
Fees: They will vary by advisor, depending on what you use... E&0 is $2400 billed quarterly, $125/mo association, $50/mo lpl website, wealth managemnt($300/month) and all sorts of other stuff.
In order to be an OSJ you have to have the series 24 or pass it in 90 days.. In general if someone else is your OSJ, they take a percentage of your production 15-25%.
Are you an advisor? In order to be an OSJ your minimum t-12 has to be $125K.
The new movement in the indy world is flat association fees, for example instead of nickel and dimed for technology, association, planning, and then the 10-15% the bd takes, they charge you a flat fee every month..
Numbers are easy to compare, but differ greatly for each practice and that is where the b/ds have an advantage. Tickets charges, Managed money, commission, fee... all of those go into finding what b/d works best.
In my case... I was with a b/d had a 80% payout. But I run 70% discretionary fee accounts.
So for my practice:
$125 association fee
$25 technology fee
$45 S&P quotes
$30- some new software they were implementing for trade checking
$ticket charges(biggest variable ever)
$150/account - fee charged to fa for running fee account with Pershing
New firm charges flat $1165 and give 100% payout. Have a clearing firm that charges 20bps with unlimited trading and no tickets.
So I make 20% more and that is great because the 1165 is less than that. And now I have $0 in tickets. Much easier to control my business and expenses now.
Thanks chief123. I'm not mentally handicapped nor blind but I appreciate the compassion you have for those who are. The only thing LPLs website says about the advisory payout is, "Fees on the Strategic Asset Management account are paid out up to 98% after the LPL Financial administrative fee." Never having been at LPL, I can't assume what that's supposed to mean. That could mean the payout is anywhere from 1% to 98%. So, as a rookie doing research on LPL, I'm going to the rookie board so someone out there with LPL experience can help me figure this out...I'm not looking to berated.
So, again, how does it work? Is it paid at 90% and then you get production bonuses incrementally? Or is all advisory business just paid out at 98%. Also, has anyone on the boards decided against becoming their own LPL OSJ and why?
It depends on your set-up:
Option 1: Background: you have t-12 >$125K, and pass series 24, then your payout is 90% on most things(As your produciton(t-12) increases so does your payout, for example on $900K in t-12 my guess is that your payout is closer to 98%)
Regarding advisory: It depends what your charge on top of the other fees. So for example, client comes in has $200K, you put them in SAM platform and charge them 1.5%.. You lose 15bps(or 0.15%) as a program fee. So now you get 1.35% @ 90%= 1.21%. But you have to pay ticket charges depending on what you use.
Option II. Someone else is your OSJ. Same scenario, but your payout is now 60% instead of 90%(he uses the other 30% he is making off of you to outfit you with office, phones, marketing, and secretary help) so on 1.35(already subtracted the program fee of 15bps) you get 0.81% and you OSJ gets 0.40%.
Some reps don't want to be an OSJ because they don't want to have to worry about the business side(leases,secretary, etc). But 60% is more than they are getting where they currently are(sometimes 10-15% more).