LPL Financial Discusses Financial Institution Services Evolution

When was the last time you visited your financial institution?

A recent WealthMangement.com post highlighted how the COVID-19 pandemic altered the frequency of customers going into the branch of their bank or credit union. That reduction in foot-traffic dramatically impacted the financial advisors that sit in financial institutions and the wealth management programs they provide. As an organization that has long supported the program managers and financial advisors in banks and credit unions, WealthManagement.com reached out to LPL Financial’s Shawn Mihal about the firm’s strategy to further help financial institutions grow their investment programs in this new environment. The former president of Waddell & Reed, Mihal now leads LPL Financial’s Institution Services.

“We have been dedicated to the institution space, but when we think about the future and how businesses continue to transform, the needs of those businesses will continue to transform and will change over time,” Mihal said to WealthManagement.com. “My role was to come in and really help understand those businesses as transformations and help connect all those support and services that we have internally and make sure we continue to evolve to address the needs of our institutions and how they are becoming more complex here in the future.”

This was Mihal’s first media interview since joining LPL and he had a great deal to say about how his team is addressing the needs of financial institutions. “We've been focusing on pulling in more of our internal partners to put deliberate approaches in how we engage with institutions. In early 2021, we organized an institution business strategy department that's focused on how we think about the evolution of the institutional space and the needs of our institutions. We're also pulling in our business development folks in the institutional space. There's a considerable amount of consolidation and acceleration of growth that's happening through M&A; we're looking to how we can partner with other institutions to help them in their M&A efforts and ensure that as they do those transactions that they're getting a transition experience like no other in the business.”

LPL provides comprehensive tools and delivers a unique approach

LPL provides a comprehensive tools and resources for financial institution investment programs, including:

• Program manager and advisor resources: Access to business support and development resources plus in-depth research, training, and technology.
• Scope and scalability: Our technology provides your institution and advisors with competitive flexibility and adaptability.
• Self-clearing and enhanced advisory platforms: Fast and efficient trading, combined with extensive product and service offerings, can engage and maintain investor accounts of all sizes.

To help program managers at banks and credit unions, Mihal believes LPL delivers a unique approach. “There's been a transition in the industry toward more holistic financial planning. In an industry where things tend to be a little bit more transactional-focused, we spent a considerable amount of time bringing in our resources and our wealth solutions teams to help our institutions as they transition through to more holistic financial planning. Whether that's doing more in the way of securities business, insurance business, advisory, bringing in the financial planning components of it. They’re focusing on deepening the client relationships through financial advice and creating those opportunities for more of the advisory-based experiences.”

In addition to developing strategies to help financial institutions expand their investment programs, LPL remains true to their roots: supporting advisors. Advisors sitting in banks and credit unions are equally important to LPL. “When we think about the institutional experiences, those are probably areas where we try to differentiate a little bit,” Mihal said. “We’re spending a considerable amount of time on the relationship side to understand the differences between the institutions that we support and making sure that we are building and working with them to build their growth and strategy plans for the future. And then, as we build those plans, we’re helping them connect to those internal resources.”

Financial institutions: A growth source for LPL

The WealthManagement.com article also shares insights about how serving financial institutions have become a growth source for LPL of late. LPL currently serves about 800 institutions across 3,000 advisors. In 2021, they added BMO Harris Bank and M&T Bank, and the CUNA Mutual Group will transition its wealth management business to LPL later this year. “LPL has built a scale business, which is able then to deploy into institutions like the BMOs and M&Ts,” Mihal said. “We believe that we're well positioned to support those institutions and ultimately drive down their cost of transacting this business. So, we see this as an ability for us to bring the scale play of LPL into institutions that are looking for opportunities that alleviate some of the cost and to compete in this space.”

Learn all the ways LPL Financial collaborates with and empowers financial institutions as well as their program managers and financial advisors.

Disclosures

The views and opinions expressed by the LPL Financial representative are not indicative of future performance or success. LPL Financial cannot be held responsible for any direct or incidental loss incurred by applying any of the information offered.