LPL just announced this. Anyone have any scoop or thoughts on what happened that made them react so harshly with this?
Dear LPL Financial Advisor,
At LPL, we are focused on providing you with the tools and services to help you grow your business and manage complexity. In 2004, LPL introduced a program through Innovex Mortgage Company, which would allow you to offer mortgage services to your clients. Unfortunately, the face of the mortgage industry is changing, and experiencing financial and regulatory challenges. This changing landscape has forced LPL to make the difficult decision to discontinue our mortgage platform and focus our resources on providing you with other tools and services that will support your growing practices and the financial planning needs of your clients.
We will soon have in place a mortgage referral program that you can use to support any requests your clients may have to utilize mortgage services. More information on the details of that program will be communicated over the next several weeks. The last day that Innovex mortgage applications may be accepted is October 31, 2007, and all signed loan applications with supporting borrower documents must be delivered by November 2, 2007. The employees servicing the mortgage platform have all been given the opportunity to secure other positions throughout the firm.
If you have been paying a monthly subscription fee you will receive a refund to your commissions for fees paid through 2007, by the end of the year. If you have any questions about any current mortgage applications, please contact Amy Lewis at Innovex at ext. 7951.
We appreciate your understanding and remain committed to providing you with industry leading programs, service and support.
It's just a guess, but they probably found the risk/return unacceptable. I don't think it's a big part of their business (I've never used them), and the regulatory hassle is a pain and will probably get a lot worse in the face of the subprime mess. LPL may have decided that given the small volume, a referral program paying LPL referral fees is more profitable with less work.
My guess is that this is a non-issue for 98% of LPL reps, me included.
A number of firms have tried mortgages over the years, Ed Jones tried it twice if memory serves, and it always seems to flop. I wonder why any brokerages try it anymore? Even before the subprime mess, it just looks like a regulatory nightmare.