LPL rose to the top for many reasons, primarily because of their commitment to supporting advisors like us so that we could run our business not as staff, but as true independents.- James Costabile
James Costabile started working with his current partners, Michael Bonevento and Craig Laday, long ago at Ameriprise, back when it was known as American Express Financial Advisors. After running the gamut of roles at Ameriprise, from having his own practice to being an employee and then a leader and mentor to other advisors, Costabile joined his two long-time colleagues in forming the independent practice of Intellectual Capital Group (ICG).
Throughout all his many years and different roles at Ameriprise, Costabile came to realize how much he enjoyed the entrepreneurial aspects of running the business, and how he longed for the freedom and flexibility to build out a team the way he saw best. He and his team freely acknowledge that Ameriprise was wonderful for growing and learning and was an excellent training ground for the team, but they all agreed: they were ready to stretch their wings and work outside the franchise model to explore true independence.
When Costabile and Laday joined Bonavento at ICG, they all agreed they’d outgrown their former partner, and in order to grow the business the way they intended, they’d need to find a way to scale. They began the search for a partner that would support them in the growth they wanted while providing them the support they needed to make ICG the independent firm they envisioned.
“Although we all had great history and gained tremendous experience at Ameriprise, we all hungered for true independence where we could run things our own way,” said Costabile. “The way we see it, the industry is evolving and changing, and we want to go where we believe it’s headed.”
As the ICG team explains, advisors historically were sole practitioners, and clients were attached to their advisor for advice on a variety of financial matters. But the playing field has become much broader and more complex, and a single advisor often doesn’t have the expertise in every area a client might be interested in.
“If you look at each prospect as a lifetime client, you have to be prepared to advise them on investment planning, tax planning, estate planning, retirement plans, insurance and more,” explains Costabile. “And you need to be ready with advice for their kids, who likely have a very different perspective as newer investors.” So ICG is focused on building a more diverse team—in terms of age, expertise and resources—so they can stay relevant through all generations, and every client can be a lifetime client.
The ICG team could see that just as clients and their needs are evolving, so are the capabilities of advisors. Technology has to be part of the picture with clients at any age, as even older clients have some degree of computer literacy and expect to be able to access their information online when they wish. Some technologies like eSignature and mobile access are just a given. That was one of the things that interested the team in LPL—the commitment to investing in technology.
The partners at ICG agreed they wanted to take the team independent, but we weren’t in a hurry, so they took their time investigating the opportunities. “LPL rose to the top for many reasons,” said Costabile, “primarily because of their commitment to supporting advisors like us so that we could run our business not as staff, but as true independents.”
Another strong driver was the investment in technology and already having things in place like DocuSign to save paper and eliminate the need to fax documents. The ICG team immediately saw the advantage of technology that was easy and intuitive for their clients, both their younger, more tech-savvy investors as well as older, established ones. The team relies on the simplicity of a website dashboard that mirrors what investors are seeing, so they can now remotely guide clients through their portfolios.
Change can be hard, but Costabile and his partners knew they needed to change to grow. Fortunately, the LPL team led ICG through the transition, step-by-step. LPL paid attention to every detail, even having prepared emails to go to ICG clients and taking other steps to make sure clients weren’t disrupted.
“The morning we went live at LPL, we started making outbound calls, and the biggest question we got from clients was if we would continue to work together,” said Costabile. “Within 30 to 45 days, most of our clients had moved along with us, which we think makes for a very smooth transition for such a large client base.” Costabile says the attrition rate at this point is under two percent, and he expects it to stay low as time goes by.
"To start, we plan to deliver what clients have grown to expect and more in the way of technology and ease of accessing information," said Costabile. "And our longer-term goal, and one where we're going to rely on help from LPL, is to scale our business up." Part of the plan at ICG is to grow the practice by attracting new, young, and diverse talent to replace retiring advisors adn to work with LPL to find mutually beneficial mergers and acquisitions to grow the business and expand its areas of expertise within the next five to ten years. According to the team, transitioning to LPL is just the beginning, the future looks brigher than ever.
The views and opinions expressed by the LPL financial advisor(s) are as of the date of this publication. These views may not be representative of the views of other financial advisors and are not indicative of future performance or success. Neither LPL Financial nor the LPL financial advisor can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Intellectual Capital Group and LPL Financial are separate entities.