Anyone familiar with LPL's Bank Division (FIS)?

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May 23, 2009 8:10 am

Curious how this works, what the platform is like, etc. 


 
Have heard good things about LPL.
 
Not quite understanding how an Independent Contractor relationship would work in a bank, though, where the bank tends to control everything - i.e., they want to produce all marketing pieces (after all, it's their reputation), direct all prospecting activities (when and if seminars are done, on what topic, where), how, when, if the banks staff gets trained on referrals, what hours the rep needs to be at the bank, etc.
 
I don't quite understand how this applies as an IC, because controlling the work and how it is done constitutes an "employee" relationship not an IC relationship.
 
May 24, 2009 6:38 pm
newrookie:

Curious how this works, what the platform is like, etc. 


 
Have heard good things about LPL.
 
Not quite understanding how an Independent Contractor relationship would work in a bank, though, where the bank tends to control everything - i.e., they want to produce all marketing pieces (after all, it's their reputation), direct all prospecting activities (when and if seminars are done, on what topic, where), how, when, if the banks staff gets trained on referrals, what hours the rep needs to be at the bank, etc.
 
I don't quite understand how this applies as an IC, because controlling the work and how it is done constitutes an "employee" relationship not an IC relationship.
 
Frankly, if the bank is controlling all the aspects you describe, I don't see how on earth classifying you as an independent contractor would pass the smell test with any taxing agency that wants to collect employment taxes (social security, unemployment, etc.).  LPL does have a nice platform, IMO, but if you have a bank telling you when to show up, how to dress, who you can talk to, etc., you are an employee for all intents and purposes.  Have you actually talked to the bank about all these issues or are you speculating what their level of control will be based on what you've heard about bank programs in general?  I know that LPL runs more than one kind of program in banks.  One is very much an employee program with the bank exercising a significant level of control.  Another is where the rep actually acts as an independent in the bank with the bank providing space, warm leads and sometimes computer equipment as well for a share of the gross.  If you have a bank wanting to set your hours and otherwise exercise significant control, they should also pay half of your social security taxes.  Anything less is called having your cake and eating it too.  This is the kind of relationship that I believe congress is specifically trying to legislate away and for the life of me, I can't understand why a rep in such an arrangement would balk at that.
May 27, 2009 10:56 am

You are an independent contractor to LPL-  the bank is responsible for all of your W-2, benefit, employment issues.  The bank hires you, LPL makes sure you are U-4 clean.  For all intents and purposes you are an employee of the bank, with LPL holding your license.  You do the trades, LPL sends net revenue to the bank, the bank pays you.  Essentially, the bank has subcontracted the investment platform to LPL.

Also with LPL, I think you will be going through Uvest, which is a subsidiary of LPL.

Hope this helps.


 

May 27, 2009 10:11 pm

Not sure what your situation is but the fee-only RIA crowd have established solicitors agreements with financial institutions whereby they share the advisory fees with the bank, credit union, etc.  You do not need a Broker-Dealer to do this and is quite popular, at least within the ranks of the Advisors I know in the RIA channel.  Something to ponder.