We do the deep dive. We do it so that you don’t have to do it. We spend our days analyzing what’s happening around the world that could influence the economy and markets. And we do it so that you can leverage these insights and spend your days with your clients, focused on your business.

- Dr. Quincy Krosby | Chief Equity Strategist, LPL Financial

Financial advisors choose their level of investment management at LPL

Trends show that investors are asking for more from financial advisors and institutional wealth management programs than ever before. Investors expect financial advice to address their bigger financial picture and that their strategy integrates more aspects of their journey.

Samantha Davison

Hello, and welcome to LPL live. I'm Samantha Davison, the freedom to customize strategies for your client's financial goals starts with the foundation of flexibility. Being able to pick and choose investment choices that help you create those strategies. LPL Research is your partner and helps you gain insights and information to make sound investment choices for your clients. And that's what we're going to be talking about today. Here with me is our Executive Vice President of Wealth Management Solutions. Rob Pettman. We have Marcus Zabicki, our Chief Investment Officer, and we have Jason Hoody, Head of Manager Research. Thank you all for being here. So today's conversation is about the value of research, how advisors and institutions can really rely on your expertise and the expertise of your team to make great decisions. And so, Rob, I'd like to start with you, and we're going to start with the basics, which LPL is committed to supporting advisors and institutions throughout their journey with us. And research is such a key component of that strategy. So talk to us about

Rob Pettman

That. Well, that's right. I mean, looking back research has always been a strategic pillar of the company. It's part of the value of affiliation with the firm and it's something we're very proud of as you think about what we are focused on with the team. It's a couple of different areas that I'd highlight first. It's about having a deep bench of professionals that are delivering a great experience. And when they're out there delivering market commentary where your clients can see them, perhaps in the media, you've got a group of folks that you're proud of, that you can say, Hey, those are the resources that I have access to. And these individuals are credentialed they're market leaders, and I'm proud to be affiliated with them. So having this professional experience and a group that's supported is really important as one of the first tenants for research.

Rob Pettman

But it's not just about that too. It's also about delivering practical content things that are relevant to you and your practice that you can easily share with your clients. And as we think about that, it's not just even about the content itself. It's also about how easy it is to access it and how you can actually really strengthen that bond between you and your clients. You really amplify your brand because the research team is really designed to be a partner in your business and a resource. And then last but not least as we move through professional and practical, we want to think about personal too, because we have a number of different services and we want to make sure that we're actually delivering the services that matter most to our clients. And part of that is actually understanding what our clients want and making sure that we're delivering the things that are actually relevant to them. So as you look across those three areas, that's really how we think about serving our client base, and having that research model truly be that strategic pillar and experience within the firm.

Samantha Davison

So let's dig in and talk about how the LPL Research team is positioned to be a really great business partner with advisors and institutions, Marc.

Marc Zabicki

Yeah, Sam, this is something I believe really at my core. I, I think it's important to that. There's an evolution in broker dealer research, frankly. What does that mean? That means that there's it's no longer good enough to just be a thought leader. It's no longer good enough to be an asset allocator. We're striving to be a business partner for advisors help them run a better investment process, help them run a better overall practice. And what do we mean by that effectively? It's when we provide content for advisors, whether that's, you know, a model decision or whether that's a piece of commentary or a video, we want to ensure that we're providing, you know, what's going on, why is it going on and how to think about that so they can implement that directly in their practice.

Samantha Davison

So how is LPL different? What makes us different from maybe others? Rob?

Rob Pettman

Well, we've talked about a couple of different things, but there's this whole notion of you started with flexibility. Let's talk about that for a second, because this is a team that has a tremendous wealth of services that they offer and advisors have that flexibility to choose, which of those services best meets the needs of their practice and having that spirit of flexibility and choice within that is truly unique. The other part that I've mentioned though, too, and Marc hinted at this a little bit, and we think about this whole notion of being a business partner and, and you think about where does that come from and what is that culture that really comes from a culture of a company that's just focused on financial advisors. We don't manufacture products. We don't go direct to, to consumers. We just focus on financial advisors and when a partner in their business to help their end investors. And if you think about those two things that flexibility and that focus on our clients, that's what creates this unique experience and this unique team.

Samantha Davison

Yeah. And then Marc, how do you make those investment decisions?

Marc Zabicki

Sure. It really starts with our Strategic and Tactical Asset Allocation Committee. It is a body of the most senior investment professionals we have at LPL Research. That group gets together to create our house view if you will, which, which basically that house view trickles down into all four corners of the research advice that we provide within LPL Research. And that means, you know, the market commentary that we create, the videos that we generate and also the models that we manage are all affected by the decisions that we make within that asset allocation body,

Samantha Davison

Jason, as part of the support that the research team provides, you can really be very involved in an advisor's business or program. Talk to us about those resources and that support that's available.

Jason Hoody

That's right Sam. Our goal is to help our advisors and institutions provide the best advice to their clients. And we have four key pillars that it falls under. The first is asset allocation and capital market research. And that feeds right into number two, which is our market strategy commentary third is global manager research, and then fourth is our discretionary services through model management.

Samantha Davison

All right. So let's pick on one of those and that's manager research, which you head, talk to us about that and what that, that means for advisors

Jason Hoody

Institution. That's right. I lead that group and there's three key tenants. First is our process. Sam, I've been doing this nearly 20 years now, and I can say that we do what large investment consulting firms do when it comes to process. Second is the independent and objective way we do this. We are looking for the best in class managers. And then third is accessibility. We aggregate all of our research into a flagship report, but then we also offer customized solutions to our advisors in terms of helping them with their practice and what they need when it comes to manager research,

Samantha Davison

Let's talk about manager research. What does that process look like? Give us some real life experiences when you're thinking about the choices and the decisions that you make.

Jason Hoody

Sure, Sam, as I'm sure many advisors have. We, talk with managers all the time on their process and they tell us what it is, but we have a lot of the leading edge tools to look at the portfolio itself, really being the same seat as a portfolio manager. So, one example I can give you is the manager will say that we're very high quality. We're looking for high quality names, and that's part of their process. Our job is to validate that. They're saying in the narrative, what we're trying to do, we can then look using the data to say that the balance sheet isn't as protected as they say it is from the data, the income statement isn't as profitable as they say in the data. And then we can question how they're not providing what they say they're doing.

Samantha Davison

And talking about all the content that's available out there, and your team creates a lot. There are videos and podcasts, which you've, you've mentioned. Talk about some of those things, maybe some of the key ones that advisors should think about.

Jason Hoody

Sure. I I'll start with my group. We produce our flagship report, which is our recommended list. That's available to our advisors and institutions through the Resource Center. We also provide a daily market update and that's a daily email and service that our advisors and institutions can subscribe to through ask research.

Marc Zabicki,

And Sam, I just want to touch on what's available on lpl.com. If I could. The daily market update is, great. I think it gives us that day-to-day insight about what's going on, but also on lpl.com, you can find the weekly market commentary, which is a longstanding flagship flag-ship piece here at LPL research. And that provides a weekly construct of what's going on in capital markets. What's going on in economics. It's often authored by either myself or Jeff Roach, our chief economist, Jeff Buchbinder, our Chief Equity Strategist. And it really provides that very timely look at what's going on. And more importantly, how to think about what's going on.

Rob Pettman

And also, you know, there's a large media presence as well, and also within social media on top of that. So we've got a number of different podcasts. If you think about Dr. Quincy Crosby's podcast called The Talking Point that she puts out every Monday, which is really just built to say, Hey, here are the talking points that you might want to think about sharing with your clients this week about what's going on in the market. And then certainly, you know, we have our, market trends podcasts with Dr. Jeffrey Roach and a whole host of other media appearances that ultimately help also the brand to get the message out of what LPL Research is doing and what they think.

Samantha Davison

And also the feedback that we hear from advisors and institutions, we develop content based on that. We want to provide you what you need and how you need it. So, any final thoughts?

Rob Pettman

Well, look, I think. We highlighted a couple of things as it relates to flexibility and this whole notion of choice, and we've covered that a lot, but I want to get back to something that Jason said too, because Jason said something that's really important that we haven't really touched on. And that's a key pillar of this firm as well, which is about independence, right? This firm is an independent firm, but what's also unique about this research team is that this is an independent research team. They are not constrained by a product agenda. They are offering guidance and advice that they feel is in the best interest of investors. And that's a real resource. That's incredibly valuable. That's differentiated in the market that we're proud of.

Marc Zabicki

Yeah. And Sam, just back to the business partner element just for a second. There's three things that we hope advisors walk away from given the services that LPL research provides, and that is we can lean on LPL Research to save time. We can lean on LPL Research to help them differentiate their practice. And then finally just run a better investment process. I believe if you're running a better investment process within an advisory practice, it helps you in fact gather assets.

Samantha Davison

That's great. All right, Rob, Marc, Jason, thank you so very much for sharing your insights and expertise. LPL is all about helping advisors deliver great advice and run a thriving business. Growth is a key part of the strategy for many advisors and scaling to expand is essential. In this segment of LPL Live, we will talk about how advisors can grow by scaling certain aspects of their business, but let's start by talking about a trend we're seeing that advisors can capitalize on the rising client demand for a personalized financial plan. Kraleigh Woodford Senior Vice President Planning at Advice Services joins me now. Kraleigh, thank you so much for being here.

Kraleigh Woodford

I'm so glad to be here, Sam. Thanks for having me.

Samantha Davison

So share your thoughts on the value of financial plans.

Kraleigh Woodford (11:24):

Absolutely. Look, I think there are a couple of things that we're hearing from investors. The first is that they're actually feeling less confident in their financial decision making and kind of thinking about the future. And that's to be expected with all that is going on in the world and the volatility that we're seeing. But the other thing they're saying is they actually have a lot less time in their daily lives to navigate that complexity on their own. And as a result, what we're seeing is, the number of people actually seeking financial advice has reached an all-time high. Think about this Sam, a decade ago, 35% of investors said it was important to have a written financial plan. Today, that number is only 60%. But in reality, when you look, it's only about 40% of investors who actually have a personalized financial plan in place, and that's a huge opportunity for our industry and advisors in particular, I think the differentiator here is actually this idea of personalization. We're seeing that everywhere. And as a consumer, it's something we've begun to expect. Whether it's the way we communicate digitally, the way we shop, you know, having customized recommendations based on our tastes and preferences. We know clients actually want their advisor to create a financial plan for them that is developed with their own personal dreams and aspirations and circumstances in mind.

Samantha Davison

So what are some of those opportunities that all of this can have?

Kraleigh Woodford

Look, I think there are a couple of things. First, we know that planning actually creates longer term relationships. And what that does, is enable advisors to actually help clients execute on their plan over time and results in them being there during life's most important moments. Imagine if every current investor actually had a financial plan customized for them, or even if we just moved the needle from that 40% to 60% of investors having plans, what would happen if those investors actually started talking to their friends and family about their personalized plan, we could actually reach a point where we begin to see even more and more investors asking for a financial plan. And if we're thinking big picture and aspirationally, we might even be able to see or begin to see people starting to think about working with an advisor for the very first time. So advisors services would suddenly be even more in demand than they've ever been. I think that's actually, a pretty powerful image, this idea of a large group of Americans taking charge of their financial future and feeling really confident as they do so.

Samantha Davison

So with this public demand for financial planning growing, what can an advisor do?

Kraleigh Woodford

I think it varies based on the advisor's practice and what they're doing today, right? We know that many advisors already do financial planning and they cover critical topics for their clients in a variety of ways. They're providing advice that stands out from the competition that actually builds strong relationships and results in asset consolidation, which is another trend that we're seeing. For advisors who are highly adept at creating financial plans and already have that as part of their business, they might want to scale up and do even more financial planning look for ways to, you know, either do it more frequently or for more clients. Then there are also advisors who might create a few plans each year. And I think the opportunity there is for them to expand their planning knowledge and actually grow that side of their practice. But what we're hearing is they might actually need some advice on how exactly to do that. And then for those advisors who maybe aren't utilizing planning today, for whatever reason. I think there's an opportunity for them to begin to consider offering those services for the first time. And that's really given us an opportunity to think about how we can help support each of these advisor personas here at LPL.

Samantha Davison

So in your conversations with advisors Kraleigh, what would you say are some of the most common challenges you hear?

Kraleigh Woodford

Oh, Sam, this one's easy it's time and capacity, right. So when you think about an advisor and what they're being asked to do every single day for the investors that they served often they see an opportunity and see a need to deliver more planning. It just becomes how so sometimes, you know, they may have an interest in tapping one of their team members to kind of take on planning services, but that might mean that something else would need to change or there's an opportunity to hire staff. But maybe it's not the right time in their practice, maybe the advisor or the advisor team. Isn't sure how to sell a financial plan or has an opinion on kind of the plan and a perspective, but wants some trusted council or guidance on other opportunities. I think those challenges are what has led us here at LPL to think about introducing some new services.

Samantha Davison

So let's talk about those new services to meet the challenges you're hearing from advisors. Talk to us about that.

Kraleigh Woodford

Absolutely. So earlier this year, we actually launched our paraplanning service, which is really designed specifically to help advisors enhance or scale their financial planning practice without having to hire more people. So we built up a very experienced team here at LPL full of planning experts, including CFPs to provide an end-to-end offering. Think of it as almost like an outsource solution, where our team will work with the advisor and the investor to collect the data, input it efficiently and effectively into the software of the advisor's choice. Our team will actually create that full financial plan and deliver it back to the advisor in generally one to two weeks, and as well as provide a custom executive summary and do a one-on-one review with the advisor to discuss the plan and actually help them prepare for a really thoughtful conversation with their client. We also offer three different plan types. So we can tailor the deliverable based on the complexity of the client need and the client situation, and also have several subscription options. So we offer maximum flexibility for advisors who are looking for some additional support here.

Samantha Davison

So Kraleigh, we talked about scaling your practice to handle more financial planning, or to even start doing some financial planning. But what if you want to hire your own staff to help with your financial planning business?

Kraleigh Woodford

It's a great question, Sam. We know that there are a lot of advisors who aren't looking to outsource. They want to keep planning in-house and it becomes an opportunity for them to expand their team. Whether it's a desire to bring in a more junior advisor specifically to help with planning or actually upscale an existing member of their team to deliver the offering here at LPL. Our Advisor Institute is a great service that can actually help accomplish both of those objectives. The Advisor Institute offers a variety of training programs, all the way from our signature program, which really is focused on those new to the industry advisors and includes planning specific modules throughout the year-long program, all the way to our brand new CFP, fast-track option, which offers an efficient and effective way to prepare for and obtain the CFP designation. So there's a lot of opportunity here as well.

Samantha Davison

So before we let you go, what's next for LPL advisors and institutions?

Kraleigh Woodford

Great question. Look, we're excited about our roadmap. I think one of the things now that we've got our paraplanning service up and running that we've realized is there's a need to actually go deep on specific planning topics. And so when we look into the future, what we are building are services that do just that. So think tax planning, estate planning, we're looking at other modules like executive compensation or insurance. Really kind of again, giving advisors even more flexibility, so that if all they need is an in depth, look at a very specific planning topic we can support that need as well.

Samantha Davison (20:08):

So more support, more resources. Kraleigh, thank you so much for your time and your insights.

Segment 1: The Philosophy

The LPL Research team discusses their approach to investment insight and how it has evolved over the past few years.

Samantha Davison

Hello and welcome to LPL live. I'm Samantha Davidson, the freedom to customize strategies for your client's financial goals starts with the foundation of flexibility. Being able to pick and choose investment choices that help you create those strategies. LPL research is your partner and helps you gain insights and information to make sound investment choices for your clients. And that's what we're going to be talking about today.

Here with me is our executive vice president of wealth management solutions, Rob Pettman. We have Marcus Zabicki, our chief investment officer, and we have Jason Hoody, head of manager research. Thank you all for being here. So, today's conversation is about the value of research, how advisors and institutions can really rely on your expertise and the expertise of your team to make great decisions. And so, Rob, I'd like to start with you and we're going to start with the basics, which LPL is committed to supporting advisors and institutions throughout their journey with us. And research is such a key component of that strategy. So, talk to us about that.

Rob Pettman

Well, that's right. I mean, looking back research has always been a strategic pillar of the company. It's part of the value of affiliation with the firm and it's something we're very proud of as you think about what we are focused on with the team. It's a couple of different areas that I'd highlight first. It's about having a deep bench of professionals that are delivering a great experience. And when they're out there delivering market commentary where your clients can see them, perhaps in the media, you've got a group of folks that you are proud of, that you can say, Hey, those are the resources that I have access to. And these individuals are credentialed they're market leaders and I'm proud to be affiliated with them. So having this professional experience in the group that's supported is really important as one of the first tenants for research.

Rob Pettman

But it's not just about that too. It's also about delivering practical content, things that are relevant to you and your practice that you can easily share with your clients. And as we think about that, it's not just even about the content itself. It's also about how easy it is to access it and how you can actually really strengthen that bond between you and your clients and really amplify your brand. Because the research team is really designed to be a partner in your business and a resource. And then last but not least as, as we move through professional and practical, we want to think about personal too, because we have a number of different services, and we want to make sure that we're actually delivering the services that matter most to our clients. And part of that is actually understanding what our clients want and making sure that we're delivering the things that are actually relevant to them. So, as you look across those three areas, that's really how we think about serving our client base and having that research model truly be that strategic pillar and experience within the firm.

Samantha Davison

So, let's dig in and talk about how, um, the LPL research team is positioned to be a really great business partner with advisors and institutions, Marc.

Marc Zabicki

There's an evolution in broker dealer research, frankly. Um, what does that mean? That means that there's, uh, it's no longer good enough to just be a thought leader. It's no longer good enough to be an asset allocator. We're striving to be a business partner for advisors, uh, help them run a better investment process, help them run a better overall practice. And what do we mean by that effectively? It's when we provide content for advisors, whether that's, you know, a model decision or whether that's, um, a piece of commentary or a video, we want to ensure that we're providing, you know, what's going on, why is it going on and how to think about that so they can implement that directly in their practice.

Samantha Davison

So how is LPL different? What makes us different from maybe others? Rob?

Rob Pettman

Well, we've talked about a couple of different things, but there's this whole notion of you started with flexibility. Yeah. Let's talk about that for a second, because this is a team that has a tremendous wealth of services that they offer and advisors have that flexibility to choose, which of those services best meets the needs of their practice and having that spirit of flexibility and choice within that is truly unique. The other part that I'd mentioned though, too, and mark, mark hinted at this a little bit, when we think about this whole notion of being a business partner and, and you think about where does that come from and what is that culture that really comes from a culture of a company that's just focused on financial advisors. We don't manufacture products. We don't go direct to, to consumers. We just focus on financial advisors and want a partner in their business to help their end investors. And if you think about those two things that flexibility and that focus on our clients, that's what creates this unique experience and this unique team

Samantha Davison

Yeah. And then Marc, how do you make those investment decisions?

Marc Zabicki

Sure. It really starts with our strategic and tactical asset allocation committee. Um, it is a body of the most senior investment professionals we have at LPL research. Uh, that group gets together to create our house view if you will, which, which basically that house view trickles down into all four corners of the research advice that we provide, uh, within LPL research. Um, and that means, you know, the market commentary that we create, the videos that we generate and also the models that we manage are all affected by the, the, the decisions that we make within the, that an asset allocation body.

Samantha Davison

Jason, as part of, um, the support that the research team provides, you can really be very involved in an advisor's business or program. Talk to us about those resources and that support that's available.

Jason Hoody

That's right. I say our goals are to help our advisors and institutions provide the best advice to their clients. And we have four key pillars that falls under the first is asset allocation and capital market research. And that feeds right into number two, which is our market strategy. Commentary third is global manager research, and then fourth is our, uh, discretionary services through model management.

Samantha Davison

All right. So, let's pick on one of those and that's manager research, which you head talk to us about that and what that, that means for advisors and institutions.

Jason Hoody

That's right. I lead that group and there's three key tenants. First is our process. Sam, I've been doing this nearly 20 years now, and I can say that we do what large investment consulting firms do when it comes to process. Second is the independent and objective way we do this. We are looking for the best-in-class managers. And then third is accessibility. We aggregate all of our research into a flagship report, but then we also offer customized solutions to our advisors in terms of helping them with their practice and what they need when it comes to manager research.

Samantha Davison

Let's talk about manager research ex what does that process look like? Give us some real-life experiences when you’re thinking about the decisions that you make.

Jason Hoody

Sure, Sam, as I'm sure many advisors have. We, we talk with, with managers all the time on their process. and they tell us what it is, but we have a lot of the leading-edge tools to look at the portfolio itself really be in the same seat as a portfolio manager. So, one example I can give you is the manager will say that we're very high quality. We're looking for high quality names and that's part of their process. Our job is to validate that they're saying in the narrative, what we're trying to do, we can then look using the data to say that the, the, the balance sheet is, and as protected as they say it is from the data, the income statement isn't as profitable as they say in the data. And then we can question that how they're not providing what they say they're doing.

Samantha Davison

And talking about all the content that's available out there, and your team creates a lot. There are videos and podcasts, which you've, you've mentioned. Talk about some of those things, maybe some of the key ones that advisors should think

Jason Hoody

About. Sure. I I'll start with my group. Uh, we produce our flagship report, which is our recommended list. That's available to our advisors and institutions through the resource center. We also provide a daily market update and that's a daily email service that our advisors and institutions can subscribe to through ask research.

Marc Zabicki

Sam, I just want to touch on what's available [email protected] If I could. The daily market update is great. I think it, it gives us that day to day insight about what's going on, but also in lpl.com, you can find the weekly market commentary, which is a longstanding flagship piece here at LPL research. And that provides a weekly construct of what's going on in capital markets. What's going on in economics. It's often authored by either myself or Jeff Roach, our chief economist, Jeff Bookbinder, our chief equity strategist. And it really provides that very timely look at what's going on. And more importantly, how to think about what's going on.

Rob Pettman

And also, you know, there's a large media presence as well, and also within social media on top of that. So, we've got a number of different podcasts. If you think about Dr. Quincy Crosby's podcast called the talking point that she puts out every Monday, which is really just built to say, Hey, here are the talking points that you might want to think about sharing with your clients this week about what's going on in the market. And then certainly, you know, we have our, our market trends podcast with Dr. Jeffrey Roach and a whole host of other media appearances that ultimately also help the brand to get the message out of what LPO research is doing and what they think.

Samantha Davison

And also the feedback that we hear from advisors and institutions, we develop content based on that. We want to provide you what you need and how you need it. So, any final thoughts?

Rob Pettman

Well, look, I think I, we highlighted a couple of things as it relates to flexibility and this whole notion of choice, and we've covered that a lot, but I want to get back to something that Jason said too, because Jason said something that's really important that we haven't really touched on. And that's a key pillar of this firm as well, which is about independence, right? This firm is an independent firm, but what's also unique about this research team is that this is an independent research team. They are not constrained by our product agenda. They are offering guidance and advice that they feel is in the best interest of investors. And that's a real resource. That's incredibly valuable. That's differentiated in the market that we're proud of.

Marc Zabicki

Yeah. And, and same just back to the business partner element just for a second. There’re three things that we hope advisors walk away from, um, given the services that LPL research provides, and that is, um, we can lean on LPL research to save time. We can lean on LPL research to help them differentiate their practice. And then finally just run a better investment process. I believe if you're running a better investment process within an advisory practice, it helps you in fact gather assets.

Samantha Davison

That's great. All right, Rob, Marc, Jason, thank you so very much for sharing your insights and expertise.

Rob Pettman

Thank you.

Segment 2: More services. More choice.

In addition to leveraging the LPL Research team, senior vice president of Planning and Advice Services, Kraleigh Woodford, talks about the value of financial planning and the opportunities it creates with existing and prospective clients. Learn how paraplanning and other programs can provide financial advisors more flexibility for serving their clients.

Samantha Davison

LPL is all about helping advisors deliver great advice and run a thriving business. Growth is a key part of a strategy for many advisors and scaling to expand is essential. In this segment of LPL Live, we will talk about how advisors can grow by scaling certain aspects of their business, but let’s start by talking about a trend we’re seeing that advisors can capitalize on: the rising client demand for a personalized financial plan. Kraleigh Woodford, senior vice president, planning and advice services, joins me now. Kraleigh, thank you so much for being here.

Kraleigh Woodford

I'm so glad to be here, Sam. Thanks for having me.

Samantha Davison

So, share your thoughts on the value of financial plans.

Kraleigh Woodford

Absolutely. Look, I think there are a couple things that we're hearing from investors the first is that they're actually feeling less confident in their financial decision making and kind of thinking about the future and that's to be expected with all that is going on in the world and the volatility that we're seeing. But the other thing they're saying is they actually have a lot less time in their daily lives to navigate that complexity on their own. And as a result, what we're seeing is the number of people actually seeking financial advice has reached an all-time high.

Kraleigh Woodford

Think about this Sam a decade ago, 35% of investors said it was important to have a written financial plan today. That number is only 60%. Um, but in reality, when you look, it's only about 40% of investors who actually have a personalized financial plan in place, and that's a huge opportunity for our industry and advisors in particular, I think the differentiator here is actually this idea of personalization. We're seeing that everywhere. And as a consumer, it's something we've become, we've begun to expect. Um, whether it's the way we communicate digitally, the way we shop, you know, having customized recommendations based on our tastes and preferences. We know clients actually want their advisor to create a financial plan for them that is developed with their own personal dreams and aspirations and circumstances in mind.

Samantha Davison

So, what are some of those opportunities that all of this can have?

Kraleigh

Look, I think there are a couple of things. First, we know that planning actually creates longer term relationships. And what that does is enable advisors to actually help clients execute on their plan over time and results in them being there during life's most important moments. Imagine if every current investor actually had a financial plan customized for them, or even if we just moved the needle from that 40% to 60% of investors having plans, what would happen if those investors actually started talking to their friends and family about their personalized plan, we could actually reach a point where we begin to see even more and more investors asking for a financial plan. And if we're thinking big picture and aspirationally, we might even be able to see or begin to see people starting to think about working with an advisor for the very first time. So advisor services would suddenly be even more in demand than they've ever been. I think that's actually a, a pretty powerful image, this idea of a large group of Americans taking charge of their financial future and feeling really confident as they do.

Samantha Davison

So, with this public demand for financial plan planning, growing, what can an advisor do?

Kraleigh Woodford

Look, I think it varies based on the advisor's practice and what they're doing today, right? We know that many advisors already do financial planning, and they cover critical topics for their clients in a variety of ways. They're providing advice that stands out from the competition that actually builds strong relationships and results in asset consolidation, which is another trend that we're seeing for advisors who are highly adept at creating financial plans and already have that as part of their business. They might want to scale up and do even more financial planning look for ways to, you know, either do it more frequently or for more clients.

Kraleigh Woodford

Then there are also advisors who might create a few plans each year. And I think the opportunity there is for them to expand their planning knowledge and actually grow that side of their practice. But what we're hearing is they might actually need some advice on how exactly to do that. And then for those advisors who maybe aren't utilizing planning today, for whatever reason, I think there's an opportunity for them to begin to consider offering those services for the first time. And that's really given us an opportunity to think about how we can help support each of these advisor personas here at LPL.

Samantha Davison

So, in your conversations with advisors Kraleigh, what would you say are some of the most common challenges you hear?

Kraleigh Woodford

Oh, Sam, this one's easy it's time and capacity, right. So, when you think about an advisor and what they're being asked to do every single day for the investors that they serve, often they see an opportunity and see a need  to deliver more planning. It just becomes how.  So sometimes, you know, they may have an interest in tapping one of their team members to kind of take on planning services, but that might mean that something else would need to change, or there's an opportunity to hire staff. But maybe it's not the right time in their practice. Maybe the advisor or the advisor team isn't sure how to sell a financial plan or has an opinion on the kind of plan and a perspective but want some trusted council or guidance on other opportunities. I think those challenges are, are what has led us here at LPL to think about introducing some new services.

Samantha Davison

So, let's talk about those new services to meet the challenges you're hearing from advisors. Talk to us about that.

Kraleigh Woodford

Absolutely. So earlier this year, we actually launched our para-planning service, which is really designed specifically to help advisors enhance or scale their financial planning practice without having to hire more people. So, we built up a very experienced team here at LPL full of planning experts, including CFPs, to provide an end-to-end offering. Think of it as almost like an outsource solution where our team will work with the advisor and the investor to collect the data and input it efficiently and effectively into the software of the advisor's choice.

Kraleigh Woodford

Our team will actually create that full financial plan and deliver it back to the advisor in generally one to two weeks, as well as provide a custom executive summary and do a one-on-one review with the advisor to discuss the plan and actually help them prepare for a really thoughtful conversation with their, their client. We also offer three different plan types, so we can tailor the deliverable based on the complexity of the client need and the client situation, and also have several subscription options. So we offer maximum flexibility for advisors who are looking for some additional support here.

Samantha Davison

We talked about scaling your practice to handle more financial planning, or to even start doing some financial planning. But what if you want to hire your own staff to help with your financial planning business?

Kraleigh Woodford

It's a great question, Sam. We know that there are a lot of advisors who aren't looking to outsource. They want to keep planning in-house and it becomes an opportunity for them to expand their team. Whether it's a desire to bring in a more junior advisor specifically to help with planning or actually upscale an existing member of their team to deliver the offering here at LPL. Our Advisor Institute is a great service that can actually help accomplish both of those objectives. The Advisor Institute offers a variety of training programs all the way from our signature program, which really is focused on those new to the industry advisors and includes planning specific modules throughout the year-long program, all the way to our brand-new CFP, fast track option, which offers an efficient and effective way to prepare for and obtain the CFP designation. So there's a, a lot of opportunity here as well.

Samantha Davison

So, before we let you go, what's next for LPL advisors and institutions?

Kraleigh Woodford

Great question. Look, we're excited about our roadmap. I think one of the things now that we've got our paraplanning service up and running, that we've realized is there's a need to actually go deep on specific planning topics. And so when we look into the future, what we are building are services that do just that. So, think tax planning, estate planning, we're looking at other modules like executive compensation or insurance, really kind of again, giving advisors even more flexibility so that if all they need is an in depth, look at a very specific planning topic we can support that need as well.

Samantha Davison

So, more support, more resources - Kraleigh, thank you so much for your time and your insights.

Kraleigh Woodford

Thank you, Sam. It was great.

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*Planning & Advice Services Segment: Advisor Financial Plan stat: Cerulli 2021 US Retail Investor Advice Relationship Report, Exhibit 9.05

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