Flexible tools for running a thriving business

When LPL financial advisor, Marc Freedman, joined Freedman Financial, it was his father’s business. It was a great opportunity for Marc to learn and see how the role of a financial advisor evolved. And when his father retired and Marc took over the business, they were managing $150 million with a team of six.

Today, with still only six people, Marc’s firm manages $650 million.

The difference? He leaned into the flexibility and capabilities of LPL Financial to help grow his business efficiently.

In this video, you’ll hear Marc’s story and ideas from LPL leaders how the expansion of services and support helps financial advisors and institution programs grow, including:

LPL Tools and Options for Growing Your Business

Samantha Davison: First, let’s talk with you Marc Cohen. Thank you again, all of you for being here. Let's talk about the marketplace. What's happening there and how what's happening there impacts advisors and institutions.

Marc Cohen: Well first, Sam, thanks for having us back here at LPL live. It's great to be back yet again. I remember back to 2019 when we were back together in person for the first time. But yeah, in the marketplace, there's a lot of things that are changing, and we're seeing some really interesting occurrences

for the first time, probably in the history of this industry. Two particular phenomena coming together and colliding that is driving a lot of activity in this marketplace.

Marc Cohen: The first is something we've talked about for probably about 10 years, and the buzzword of success and planning has been around forever. Well, we've known for a while we were driving towards a cliff, that cliff is getting pretty close. We're seeing for the first time, now last year, more than 50% of all client assets in the country that are managed are managed by an advisor over 55 years old. More than that, we're seeing, and Cerulli telling us about a third of all advisors. It's 300,000 advisors in the industry, about a third of them, 100,000 advisors managing $8.5 trillion in assets are likely to retire before this decade is out.

Marc Cohen: Clearly, there's a need for us to be able to help and understand how are we going to transition the management of that wealth. Only 25% of those advisors who are planning to retire know what they're going to do. So, you've got $6 trillion, 75,000 advisors who need some help to figure it out. The other side of it is, there's no secret, every day you look in the media, and there's two, three, four new M and A announcements coming about, and so you start to ask the question of why. And the reality is over the last several years financial backers, private equity firms have started to really take a really keen interest in what we're doing in this marketplace.

Marc Cohen: If you think about their business model, they're looking for a few things. They're looking for some predictability, they're looking for some growth, and this marketplace really provides that

as we've shifted over the last, I don't know, 20 years or so from brokerage to advisory, you've really built up a recurring revenue stream where you wake up on January first, you've got a good amount of predictability as to what your revenue's going to be for that year.

Marc Cohen: You add on top of that the fact that most advisory fees are then tied to and are correlated to the marketplace. And you look at the last 100 years, the market has grown 8% to 9% pretty consistently.

Now, yes, we're in a weird environment today. But if you look on average over that period, 8% to 9% growth, so that means that the private equity firms are able to benefit from that as well. They can't see that anywhere else. You don't see that in subscription revenue, in tech or anywhere else. So wealth management's really interesting for them.

Samantha Davison:  But my question with all of that that's happening, how do advisors navigate that and then still remain competitive?

Marc Cohen: It's a great question, and the reality is you need help. And as we heard about from the main stage earlier with Dan, we've got a robust amount of services to be able to help with that. In fact, Carter leads a team for us that is specifically focused on consulting through your options around succession planning and understanding the marketplace around M and A, representing buyers, representing sellers and understanding and pursuing the opportunities that are available to them. We've made meaningful investment into that this year, quadrupling the size of that team since the beginning of this year, to be able to make sure that we have the staff,and the resources and expertise, to help you guys out where it's necessary.

Samantha Davison:  Okay, so then let's talk about the team, let's talk about the services, what is LPL doing to help advisors take advantage of what I hear is amazing opportunity?

Carter Gibson: Yeah, absolutely Samantha. Just what Marc was highlighting. When we look at the opportunity out there with all these transitioning advisors, all these assets in motion,we don't want to show up and say, "Hey advisor, go wear another hat.” “Go figure out how to be an M and A expert.”

“Go figure out how to write your own succession plan.” “Go figure out how to market your practice."

Carter Gibson: We want to help step up with the solutions, the services, and the professional support to go help them achieve their goals, whether you're an independent advisor, whether you're part of an institution, whatever you're doing, we want to help you achieve your goals. And we want to show up with that right support at the right time. So that means, as Marc said, as we grew the team standing up specific buy side support teams.

Carter Gibson: So you're ready to grow? Great, we have professional support that can help you do that, and services to help you find those right advisors. Maybe you're on the selling side, planning your legacy.

Well, we have succession planning here to help you plan it, and then a seller support team, if you want to monetize it. So it's all about bringing the right services and solutions to help our advisors right when they need it the most.

Samantha Davison: Okay, so give us a few details about what are the benefits that advisors will feel

from taking advantage of the services and the opportunities that you have to offer.

Carter Gibson: Absolutely, and we work with quite a number of advisors. It's almost a thousand advisors a year now that we support through M and A and succession services. And so a couple examples. So we had an advisor up in the Great Lakes area, he's running a thriving business, had no intention of stopping, but then he suffered a health issue last year.

Carter Gibson: And he said, you know what? I want to step back from the business. And he had a partner that he thought he was going to be succeeding to, but when it came time to actually execute that plan, they found that they really weren't matched well, they weren't the right partner. So he came to us and said, "Hey, I need to sell my business, but I need to find the right partner, that's important to me."

Carter Gibson: And so our sales side team took him through a process to understand his business, understand what was important to him, and then to go find a buyer that had those same values

and that same philosophy. And we're excited to say that he sold his business successfully just a few weeks ago. So that was a great outcome for him. And that's on the legacy side.

Carter Gibson: When we think about the growth side, another practice that comes to mind, a great team

in the Tri-state area, they're looking to grow through acquisition. They built a really great model, a lot of support, and they're ready to scale, they just needed to find the opportunities. So they worked with our buyer support team, and we were able to help them grow by over 250 million in AUM, just in the last year. And they have a lot more opportunities on the horizon. But we're not just stopping there with the traditional M and A support.

Carter Gibson:  So we're looking at, "Hey, what are other opportunities that we see in the marketplace?" And so some that we've seen is, hey, when we have an internal team that wants to maintain their legacy, but they're also looking to offload a lot of the administrative burden of running a business and monetize their practice at a market competitive rate, that was really challenging to do. You typically had to completely sell your business. So we rolled out things like liquidity and succession solutions to help advisors do that. Just like our friend Marc here.

Samantha Davison:  Yeah, so Marc, let's talk about that. You are an LPL employee advisor. First of all, I'd like to understand exactly what that means and what was that transition like, and what have the benefits been with these transitions? That's a lot of questions I know, but….

Marc Freedman:  It is, and first of all, what a crowd here, huh?

Samantha Davison: I know, amazing.

Marc Freedman:  You'll be alive here in Denver and what a crowd. It's so nice to be back with everybody. You know, I joined LPL in 1991 when I was 24 years old. Now I didn't join just as a new,

I joined my father's practice who had been doing this for 20 years already. And it was really, really fascinating to grow and learn the business and see how things have changed, see how it's evolved. But in 2007, dad decided to retire at 65 years old and transition the business to me to own it. At the time, we had $150 million under management. Now, fast forward 15 years to now, we now have $600 million under management. But what's most interesting is the fact that we have the same number of employees. We had six employees in 2007, and six employees here we are in 2022.

Marc Freedman: And so you made the mention of me becoming an LPL employee. One of the things that I learned is that I had a choice over all of these years as we grew our business. I could try to hire people to handle a lot of the different functionalities of my business. Or I could keep the money in my pocket and try to do it myself. And selfishly, I think that's what I did. And the business grew and grew to the point where there was so much stuff that was weighing down on me on the weekends at nights of having to run my business. I was still serving my clients, but I was having to run my business.

Marc Freedman: And so I talked to LPL, and they gave me the opportunity where I no longer have to worry about my P and L, I don't have to worry about payroll, or registrations, or licensings, or marketing, or the lease on my car, or my, not on my car, on my building, the lease on the copier, on the postage machine, all of that stuff, I don't have to worry about it anymore. And it's made my life so much easier so that I can be more efficient and serve my clients better.

Marc Cohen:  Sam, if I could pull that through just a little bit more, I think there's really two different things that I just heard from Marc. The first is an opportunity for certain advisors who are so consumed with the operation of running their business. We can help them quiet that noise and really get back to their clients. He's not having to worry about benefits and managing real estate and how does all that work anymore? The second is lowering the risk profile of the business. He doesn't have to worry about the risk of that business, he doesn't have to worry about who am I going to transition this to anymore. Because LPL coming in as a buyer, we've taken that responsibility from him.

The views and opinions expressed by the LPL Financial Advisor(s) may not be representative of the views of other Financial Advisors and are not indicative of future performance or success.

Any Advisor firms mentioned are a separate entity from LPL Financial.

Securities offered through LPL Financial, member FINRA/SIPC.

For Public Use


The views and opinions expressed by the LPL Financial Advisor(s) may not be representative of the views of other Financial Advisors and are not indicative of future performance or success.

Any Advisor firms mentioned are a separate entity from LPL Financial.

Securities offered through LPL Financial, member FINRA/SIPC.

For Public Use | Tracking # 1-05314101

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