About a year and a half ago, much of LPL Financial’s recruiting efforts favored its corporate registered investment advisor platform, with higher incentives for its recruiters to bring on advisors and a sweeter transition package for those who joined the corporate RIA versus a hybrid office of supervisory jurisdiction (OSJ).
But the firm has recently shifted toward what some OSJs say is a more balanced approach to recruiting, increasing its support and opening up lines of communication to hybrid firms. In fact, branch recruiting is up 45% year over year, according to Rich Steinmeier, managing director and head of business development at LPL. The firm has established a new team dedicated to OSJ recruiting, led by Richard Harvey, vice president of business development.
LPL is developing joint growth plans with hybrid firms, hosting monthly calls to share market intelligence and holding recruiting bootcamps.
“LPL had done kind of a hard right turn away from supporting hybrids in recruiting and had shifted all the focus back to the corporate RIA and left the recruiting game very much to the individual hybrid RIAs to figure out on their own,” said David Soliman, CEO of 360 Wealth Management, an LPL OSJ with 87 advisors and $2.4 billion in assets under advisement. “I think they’ve realized that the large enterprises are a good driver of growth for LPL, and that we have been good partners over the years.”
Soliman says Harvey’s team has been focused on learning more about his firm’s business model and story, to make sure the hybrid is better positioned by LPL recruiters. The team has also helped connect 360 Wealth Management with leads in the area.
“For a large enterprise that spans over a couple of different states, building relationships with multiple recruiters and different areas and things of that nature, it was a little more difficult,” he said. “They act as almost a centralized point of contact to help us coordinate across multiple states and markets to get the right message out.”
Independent Advisor Alliance, a Charlotte, N.C.-based hybrid with 204 advisors and $8.6 billion in client assets, has also seen a shift in LPL’s philosophy. CEO Robert Russo believes it was a wise decision by the broker/dealer, given that the hybrids act as boots on the ground, and the b/d can leverage that.
“[LPL has] somebody that's not on their payroll spending time to help grow their business, and they've already lived in the world,” Russo said. “LPL has less of a burden on training and on some of the support shifts to the local office. I think where they've really executed it well is by creating this team that they never had before that is specifically geared to support us, and those folks do not recruit advisors directly.”
IAA’s pipeline of new recruits is higher than it has been in past years, he added.
The market intelligence that the firm shares on monthly calls is particularly useful, Russo said. It covers such things as potential programs that other firms are rolling out; things that might be perceived as negative by advisors at competing firms; mergers and acquisitions, such as Advisor Group recently being acquired by private equity firm Reverence Capital Partners; publicly announced changes at other firms; advisor compensation trends; and whether any b/ds are growing quickly and could be viewed as a legitimate competitor in the marketplace. The monthly calls also cover how hybrids can take this information and position it with what LPL offers, such as perhaps LPL is adding services where a competitor is pulling away.
Branch offices also receive a PDF with recent media coverage of LPL, so they’re not blindsided by anything that’s out there in the public domain.
“LPL has the size and scale to get all this data; they have all these numbers, and they know which firms, which people are coming over,” Russo said. “They know all of this stuff, whereas if you're a five man shop somewhere in middle America, for you to pull all this data that they're able to give you in a one hour call, you couldn't do it.”
“Rather than them having to do that investment to stay up to speed on all of the different dynamics in the marketplace, we’ll do that with them, synthesize it for them, share it with them and then let them ask questions,” Steinmeier said.
Robert Sandrew, senior vice president of business development at Integrated Partners, a hybrid office, also saw LPL pivot in the right direction and become more engaged with firms like his in recent months. But before the firm made that shift, Integrated decided to build out its own recruiting infrastructure.
“Part of that pivot was working with the major custodians,” Sandrew said. “They've been great partners, and we look at it like, ‘OK, perfect. We've got great partners on the custodial side,’ and LPL is now starting to move in that direction as well. It's fantastic to look across our partnerships, and have growth strategies, or initiatives, with all of our respective partners.”