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LPL Begins to Onboard CUNA Mutual’s Wealth Management Business

LPL onboarded $11 billion of CUNA's client assets on May 21, with the remaining $21 billion expected over the next several months. It is one of LPL's largest clients.

CUNA Mutual Group has started to transition its retail wealth management business, which includes 550 advisors across more than 250 credit unions, to LPL Financial’s brokerage and advisory platform. CUNA announced plans to transition that business to LPL last June.

LPL onboarded $11 billion of client assets on May 21, with the remaining $21 billion expected over the next several months. Although CUNA advisors manage a total $36 billion, about $4 billion of that sits at third-party asset management platforms, which LPL does not include in its reporting.

CUNA Mutual’s advisors were previously supported by CUNA Brokerage Services, the firm’s in-house broker/dealer and RIA.  

CUNA Mutual, a mutual insurance company, will continue to be responsible for the front-office operations, which include sales management, culture, growth strategy and recruiting. LPL will handle all the back- and middle-office operations.

“With access to LPL’s economies of scale and innovative technology platform, combined with our advanced data capabilities and experience and leadership serving this market, we can accelerate growth for the advisors and credit union investment programs we are committed to and continue to support,” said Rob Comfort, president, CUNA Brokerage Services, in a statement. “Our strategic alliance with LPL Financial creates a transformative value proposition for the credit union industry that we believe will result in many more members receiving the critical help they need.”

LPL has recently made a more concerted effort to support banks and credit unions. Last June, the firm brought on Shawn Mihal, former president of Waddell & Reed Inc., the broker/dealer subsidiary of Waddell & Reed Financial, to lead institution services. And in early 2021, the firm launched the Institution Business Strategy department, focused on the evolution of financial institutions as they recover from temporary branch closures caused by slowly retreating pandemic restrictions.

Large financial institutions have become a new source of growth for the firm in 2021, with the addition of BMO HarrisM&T and now CUNA.

Advisor Group, a network of independent broker/dealers, also recently announced plans to acquire Infinex Financial Holdings, a broker/dealer that currently supports more than 230 community-based banks and credit unions, giving it a foothold in that market on a much larger scale.

Tim Kehrer, director of research at Kehrer Bielan Research & Consulting, which tracks the bank brokerage and insurance industries, said there’s an untapped opportunity for financial institutions to offer wealth management services.

Kehrer said the share of credit unions selling investments has been steadily growing over the past decade. And his research shows that just 25% of community banks are currently offering investment services, indicating there’s room for growth.

The largest banks own their broker/dealer, Kehrer’s research found, but costs and regulatory pressures are driving them to consider outsourcing.

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