LPL Financial has launched a new affiliation model for high-net-worth-focused advisors. LPL Private Wealth Management is an employee model, and it aims to provide the resources and structure that a wirehouse advisor would typically have, at a higher payout.
“We are launching LPL Private Wealth as an employee advisor affiliation model because we see a market need to provide an alternative for wirehouse advisors working with high-net-worth clients,” said Anna Howard, senior vice president of Private Wealth at LPL, in a statement. “We never tell advisors how to run their practice or the types of clients they have to work with. LPL provides elite levels of service and an open-architecture platform without sacrificing our advisors’ ability to customize and without compromise.”
The payout in this model ranges from 64% to 70% for qualifying advisors, Howard said.
The independent broker/dealer currently has about $130 billion in high-net-worth assets. This unit will provide advanced estate and philanthropy planning, income tax strategy, trustee services, an alternative investment platform, banking and lending solutions and complex life insurance planning.
The firm has been planning a move into the private wealth market for more than a year. At last year’s Investor and Analyst Day, LPL CEO Dan Arnold said it’s the next growth opportunity for the firm. He outlined plans to bring more sophisticated investment and banking services to HNW clients.
The firm has built out more services to support the business of HNW advisors, including partnerships with investment banks to give clients direct access to capital markets. There are specialized lending partnerships for yachts, aircraft and art, and an expanded unified managed account platform. The firm also continues to build out access to alternative investments and support for more complex multi-generational planning. The firm is also exploring banking and lending "as a service."
Since 2019, LPL Financial has expanded its affiliation models beyond the traditional registered reps, small banks and credit unions. Executives launched Strategic Wealth Services, designed as a low-friction path for wirehouse liftouts, its Linsco channel for advisors employed by LPL, and its RIA custody service. Larger financial institutions have recently become a focal point of the firm's growth strategy.
During the third quarter of 2023, the firm’s traditional independent advisor model accounted for $13 billion of recruited assets, while its newer affiliation models, including Strategic Wealth Services, its employee advisor model and its RIA support business, all had their strongest quarter yet, with $5 billion in recruited assets. Its bank and credit union channel recruited $1 billion.