Payouts & Support – The Pain Points of Wirehouse Advisors

LPL Financial

A recent Nasdaq.com article profiles the frustrations of wirehouse advisors, causing them to breakaway to RIAs and IBDs. This article explores those pain points and possible solutions.

According a 2020 Cerulli Associates study1 wirehouse advisor productivity is up, but those same firms are losing financial advisors to Independent Broker/Dealers (IBDs) or to becoming a Registered Investment Advisor (RIA). Why? A recent article on Nasdaq.com looked into what’s behind those moves. Turns out, there are two big pain points for wirehouse advisors.

Advisor compensation is too complicated

The first pain point for wirehouse advisors is compensation. The Cerulli study found that advisors are growing tired of the “complicated and sporadically changing compensation grids.” Even though the average wirehouse advisor has $175m in AUM, the frustration over compensation grids is enough for them to explore their options.

Not enough support

While advisors can benefit from the wirehouse brand, that advantage does not help with the other advisor pain point: lack of support. Advisors are frustrated by the amount of resources and support staff they receive – especially if that support is tied to production. The more time advisors spend on operational and administrative tasks, the less time they have to spend supporting clients.

How LPL helps wirehouse advisors

As a nationally-leading independent wealth management firm2 LPL Financial offers solutions to help with the frustrations wirehouse advisors have over compensation and support:

High earnings – As a broker-dealer, custodian, and clearing firm all in one, LPL is able to provide highly competitive payouts at every service level. LPL’s scale often results in lower pricing and fees, a well.

No production quotas or compensation grids - Most of LPL’s affiliation models offer payouts between 90% and 100%.

Business model options.  Advisors can choose from affiliation models and define the level of support they want:

  • Full-service concierge. Advisors own their business. LPL runs it for the advisor.
  • Autonomous business owner. Advisors run operations their way. LPL provides the tools, platforms, and expertise to help advisors.
  • RIA. LPL is the #3 custodian for Registered Investment Advisors2, providing products and services for the unique needs of RIAs.
  • Employee model. Advisors join LPL as an employee advisor. They control their book and brand and receive a competitive payout.

Interested in learning more about breaking away?

Contact an LPL recruiter for a confidential conversation about what options LPL can provide wirehouse advisors.

1 Cerulli Associates, October 21, 2020, Wirehouse Lead Advisor Productivity Rates Among All Broker/Dealer Channels

2 A top RIA custodian (Cerulli Associates, 2019 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine June 1996-2020); No. 1 provider of third-party brokerage services to banks and credit unions (2019-2020 Kehrer Bielan Research & Consulting Annual TPM Report

Tracking # 1-05124062

Payouts & pricing

As a broker-dealer, custodian, & clearing firm all in one, we provide highly competitive payouts & low pricing & fees

Employee model

Through our employee model, you’ll own your clients, receive a higher payout, & have access to all our resources.

Advisor-focused service & support

Enjoy professional service & support for every area of your business – without production quotas.