LPL Drops 401(k) Match and merit increases

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Dec 30, 2008 1:33 pm

Any other firms out their cutting benefits?

Dec 30, 2008 1:54 pm

Jones has enhanced some benefits recently, but have not dropped anything I am aware of.  I am sure the profit sharing contribution will be reduced for 2008, but it's generally always the same % of profit of the firm.  Last year it was 5.8% of your income (dollar for dollar, no cap), but I am guessing that it will be more like half that this year (similar to 2001/2002 time period).  They also added additional bonuses for branch admin staff this year, which I am sure they will not take away.

Dec 30, 2008 2:36 pm

B24-

 
You are omitting the most influential tool the GP's have. The bonus brackets are at 0.
 
Yesterday LPL announced a 10% reduction in staffing. I am not suprised that they would drop the match. LPL emphasizes fees and with the market drop they must have figured that 2-300M less in income warrants moves like this.
 
From a service standpoint it wasn't the best, now it probably will get worse. In the indy world there probably is no better than LPL, so we will become multi-taskers while we wait on the phone...
Dec 30, 2008 2:47 pm
footsoldier:

B24-

 
You are omitting the most influential tool the GP's have. The bonus brackets are at 0.
 
Yesterday LPL announced a 10% reduction in staffing. I am not suprised that they would drop the match. LPL emphasizes fees and with the market drop they must have figured that 2-300M less in income warrants moves like this.
 
From a service standpoint it wasn't the best, now it probably will get worse. In the indy world there probably is no better than LPL, so we will become multi-taskers while we wait on the phone...
 
Very true.  Big producers get penalized for falling profits of the firm.  Not sure the GP's really "control" the bonus bracket, as it is more a function of the firm profit overall.  But I think it's an incentive to keep costs low in STL. 
Dec 30, 2008 3:15 pm

Wow,
 Here's what a rube I am, I got conned into coming on board as an LPL FC (and OSJ) for just a 92% payout (and a small transition check). I've never even participated in "LPL's 401(k) Plan" (for FCs), much less never received a matching contribution from LPL. I feel so used.
 I'm sure some of the non-indy's here were made to feel better, if briefly, about their own, real, shitty situation by reading that headline, though.

Dec 30, 2008 3:16 pm

Considering I only talk to LPL maybe 5x's per week, I  doubt I will even notice the cutbacks... I see this trimming as part of the overall market conditions.  I guess I could use this to ask my assistant to forgo her raise this year and put more in my pocket...Hmmm...Use this seemingly dire time to cut costs, trim fat, and enhance my bottom line..I like it.

Dec 30, 2008 3:36 pm

I assume we are talking about LPL's 401k for home office employees, as there is no 401K for advisors (that I'm aware of).  We are independent, which is why we can start our own 401k, SEP, Simple, etc.

Dec 30, 2008 3:56 pm
[/quote]
 
Not sure the GP's really "control" the bonus bracket, as it is more a function of the firm profit overall. [/quote]
 
 But WHO creates/owns the formula that determines how much flows to the bonus pool (vs. GP distributions, etc)??  I think that is the definition of control.  The GPs share of net income was certainly not zero---nor should it be, as they are the owners.  But they most definitely have control of the bonuses they choose to pay out to their employees/FAs.
 
LPL must have a tricky balance between paying enough staff to keep their clients (FAs) happy and maintaining the high payouts, etc to keep their clients/FAs happy.  They seem to do a pretty good job at it though.
Dec 30, 2008 5:30 pm

Hey B24-

 
Do they still charge you the same for the T1 as the satellite? They manipulate the shit out of the expenses and absolutely control 100% of the bonus pool. Cmon dude...
Dec 30, 2008 6:16 pm

I think it's funny when I read statements like some of the ones about that refer to "the GP's" that control everything.  Which ones would it be that control everything?  Would it be the one in charge of the Mutual Fund department?  Or maybe the one in charge of the Peoplesoft team?  Or maybe it's one of the ones in the field that pull those strings.  Now, are there GPs in charge of the financial data?  Yep.  Do I believe that he is capable of manipulating the expenses? Yep.  Do I believe he does?  Nope.  Perhaps though, my glasses are a little greener today than usual. 


 
Oh yeah, the old "communications" line item on the P&L has been reduced by $100.  It's now titled "equipment and access" and they break it down farther than before.  It's now shows as data charge, terminal and software charge, voice and video charge, quotes and other market data, and other equipment charge.  All of that for the low, low price of only $1250 a month.   
Dec 30, 2008 6:57 pm
now_indy:

I assume we are talking about LPL's 401k for home office employees, as there is no 401K for advisors (that I'm aware of).  We are independent, which is why we can start our own 401k, SEP, Simple, etc.



That is exactly right....the cuts in headcount, comp, and 401k match were for home office staff.  LPL has NOT cut payouts to advisors.

In fact, when they announced that they were canceling incentive trips for next year, they replaced it with stock options for those advisors who qualified for the canceled trips.

Furthermore, I would rather be an LPL employee who had a job with no 401k match than to be a Bear, Lehman, or WachAGEdwards home office employee who was left waiting in the unemployment line.

Finally, it should be noted that they specifically stated that they cut bonuses at the top levels of the firm before they ever started talking about cutting back overall headcount.

They are far from perfect, and I'm concerned about deterioration in service due to the cutbacks, but they do think and act and communicate differently than the big Wall Street firms in my first hand experience.


Dec 31, 2008 7:58 am

Edward Jones has not reduced any benefits to employees, and may be enhancing some?

 
gulp gulp gulp, up to your eyeballs the kool-aid flows. 
 
Health insurance had basically been stripped away from FAs back in 2004, high deductible plans only please can I have another? 
 
GPs control everything, especially the Home Office GPs.  A sketchy angry bunch when I was there, I don't know if Weddle has calmed them down any.
Dec 31, 2008 9:05 am

Good Times.
Any time you meet a payment.
Good Times.
Any time you need a friend.
Good Times.
Any time you're out from under.

Not getting hastled, not getting hustled.
Keepin' your head above water,
Making a wave when you can.

Temporary lay offs.
Good Times.
Easy credit rip offs.
Good Times.
Scratchin' and surviving.
Good Times.
Hangin in a chow line
Good Times.
Ain't we lucky we got 'em
Good Times.

Dec 31, 2008 10:07 am

Spiff-

 
It's been a long time since we had dialogue. Happy New Year.
 
My communication costs;
 
ATT 200
Comcast 95
Software 350
 
645 per month.
 
I keep 100% of my profit. What about you?
You don't control anything other than revenue. Not because you can't, because they won't let you. Economies of scale don't help you, I wonder why...
Dec 31, 2008 10:54 am

Foot, you also bought your computer, printer, fax, phone, etc.  You have to pay someone to fix your PC, fix your phone, fax, printer, whatever.  That's all included in our monthly cost.

 
Foot, I know what goes into it.  They now break out all the tech costs line by line.  Yes, it's a lot, but it's all accounted for.  There's also software in there like the Quote monitor, financial planning software, etc.  I'm not saying they couldn't do it cheaper or better.  The problem is, when a B/D has to provide for over 10,000 advisors, some of the stuff is necessary for some but not all.  It's not perfect.  But it is what it is.  It's no different at SB or Merrill or another captive broker.  It's just that we get to see the details in our P&L, so we get annoyed with it.   
Foot, I think you need to stop acting all self-riotious and understand that many of us understand that we pay for stuff in our P&L.  We know that there are owners getting paid a lot of money at our firm.  But we KNOW that.  We're big boys and can handle our own.  If we don't like it enough, we can leave.
Dec 31, 2008 12:42 pm

B-

 
Sorry if you feel I was self-rightous (proper spelling) I do apologize if it came off that way. My intent was to illustrate that as good as you guys are ( I was with Jones for 9 years) in the field they are taking much too much, disguised in many ways like overcharging for communications/software.,etc.
 
In 2008 my revenues were higher than at Jones and my net is 70%. If I had stayed I am sure the revenues would be higher than independent but my net would have been at least 25% lower. So where do those hard-earned dollars go? To the people who deserve it the least. And since you are a big boy (your words) I guess you have figured out why that is OK with you. It just never ever passed the smell test for me.
Jan 1, 2009 12:41 am
footsoldier:

B-



Sorry if you feel I was self-rightous (proper spelling).





Um, I think it is self-righteous (proper spelling, but at least you were much closer).

Jan 1, 2009 5:16 pm

Yeah, I was about as far off as you can get.

Jan 1, 2009 5:41 pm

Maybe, unless you really meant riotious...and those ex-Jones guys do tend to seem ready to riot at times!

Jan 2, 2009 9:36 am

Makers mark and coke. As soon as I hit return on the ol keyboard I realized how stupid I am...sometimes!

 
I guess ex-Jonesers can't spell either. Maybe my five year old can hep me!