The Financial Advisor's Journey | From the Founding of LPL

Part 3: From the founding of LPL to number one independent broker dealer

Vision. Authenticity. Unparalleled support. These are the roots of LPL Financial.

In the early 70s, when few Americans paid attention to the concept of financial planning, Private Ledger founder and visionary Bob Ritzman sought to offer a large group of mutual funds and securities to advisors—without pushing a particular product. With a similar vision, Todd Robinson purchased Linsco, anticipating a growing desire for advisors to run their own practices independently. The aftermath of the stock market crash in October 1987 proved that these leaders were accurate in their projections.

In the midst of this rapidly changing industry environment, Ritzman and Robinson joined forces, and LPL was formed — designed as an alternative to traditional Wall Street firms. The founders' revolutionary vision centered on helping financial professionals build competitive businesses while serving their clients' best interests—treating them like people, not accounts.

That steadfast commitment to freedom and independence was essentially unheard of in the industry at the time. But the founders had a vision, and they brought it to life – creating a firm that turned the industry upside down: where the firm worked for the advisor instead of the advisor working for the firm.

That strong foundation is what's kept LPL thriving and, of course, changing.

A better way to do business

Only two years after forming, LPL created its first of many innovative solutions to serve advisors in this space by launching the Strategic Asset Management (SAM) platform. Establishing LPL Research, a team dedicated to delivering objective market and economic insights and due diligence, soon followed. Whether you've been at LPL for two years or 22, you know these offerings have stood the test of time.

SAM provided a platform where advisors can conduct advisory business — removing the transaction commission-based elements of the advisor-investor relationship and offering a flat-fee structure where the advisor and investor interests are aligned.

Today, nearly 30 years later, SAM provides access to more than 6,500 investment products and remains a premier platform for advisors who want to create customized portfolios. In addition, the LPL Research team continues to provide in-depth market and economic thought leadership, as well as due diligence and recommendations on asset allocation models, mutual funds, and more, all intended to help you build and manage portfolios. Today, the LPL Research team manages over $40 billion in assets across our models, in addition to continually vetting new strategists, managers, and funds.

To help our advisors keep up with growing investor expectations and industry changes, LPL has had to evolve as well. Beyond SAM, we implemented several other investment platforms with varying degrees of automation, scalability, and customization. Our first turnkey, centrally-managed advisory platform, Optimum Market Portfolios (OMP), launched in 2003, has grown to hold $7.5 billion in assets. We recently lowered the minimum for that platform to make it available to investors with $10,000 in assets.

Our premier centrally-managed platform, Model Wealth Portfolios (MWP), was introduced in 2007. MWP is a turnkey solution that offers customization and increased sophistication by providing a variety of investment strategies designed to align with a broad range of client goals.

While MWP was an innovative solution at its time, it has continued to grow — from four strategists at its launch to 17 today, with hundreds of models to choose from. The more models we offer, the more choice advisors have, and the more investors they can serve. Advisor Sleeve, the latest advisory innovation, enables you to build and run models within MWP — like a strategist — but in a more intuitive and streamlined way. You get the best features of both an advisor-driven platform and one that's centrally managed—maintaining control in how you manage your models while saving time with automatic trading and rebalancing.

Like everything at LPL, the journey to best-in-class is never over. The next step in the evolution for MWP will be to create a unified managed account platform so that no matter what models you leverage, you'll be able to manage it all in one place.

Helping LPL advisors pull off the starting blocks and propel beyond the competition doesn't just mean offering the models and freedom of choice. We also make it easier for advisors to scale their business while providing the best service to their clients by removing the barriers to transitioning to a more models-based practice. That means added functionality, reduced fees, and more support across their business.

Technology and service you deserve

Innovative investment platforms that offer a wealth of options are essential to our business model. To fully leverage the value of those options, you need the technology infrastructure and functionality to support them — along with seamless workflows to make it easier and scalable to serve your growing client base. On top of all of that, you need a service model you can count on.

A platform that powers your business

When we began designing a new technology platform advisors could use to conduct almost every aspect of their business, we knew it had to be designed with the advisor in mind. It had to be an intuitive, integrated platform evolving as the industry and the world evolve. It had to power their business, and provide insights to allow advisors to serve their clients well while helping advisors identify new opportunities to grow.

In 2016, ClientWorks was born. Every year after — and going forward — we will continue to invest in technology advancements that elevate our platform and exceed our advisors' expectations.

We do this through the lens of studying other technologies and platforms — not only in the financial services industry but across all industries — to evaluate and apply best practices and key learnings to building the technology experience at LPL.

This approach enables us to offer an experience that's intuitive and aligned with other ways you interact with technology on a daily basis — making the adoption of ClientWorks smoother and more seamless for you and your teams.

The other lens that has driven every investment and update we've made is, of course, your feedback and input. This ranges from enabling platform features allowing you to easily flag an issue or share a comment, to proactively reaching out to you for insights on what you need from LPL technology. Our leaders and technology teams have spent hours upon hours in advisors' offices, looking over their shoulders to see what works, what doesn't, and what we need to do to make our offerings better.

Connecting your workflows

Our guiding principle is to help advisors in all aspects of their business when it comes to creating technology. Or as Burt White, managing director of Investor and Investment Solutions, puts it: "Technology, when used to its fullest capacity, can help advisors grow their relationships, grow their business, and maximize their success." That's why we've invested in creating a platform in ClientWorks, and enhanced it by fully integrating with other technologies and systems.

What that means, in practice, is we give you curated and integrated technology options across the board. This empowers you to select LPL or third-party solutions for your everyday needs regarding proposal generation, financial planning, or customer relationship management (CRM). The technologies are linked and shared across systems, so the work that matters most to you — streamlining all the tasks you need to do for prospecting, turning those prospects into clients, onboarding new accounts, managing portfolios, servicing new requests, and managing all your clients – is easier to do.

And maintaining this open-architecture structure allows us to give you options — and build on them. As technology evolves and new tools and platforms are developed, we can add them to ClientWorks Connected to improve how you work. ClientWorks Connected's ultimate goal is to provide end-to-end workflow offering sophisticated solutions to match the modern investor's needs.

Taking care of you

When we rolled out our new mission statement in 2019, "We take care of our advisors, so they can take care of their clients," a natural extension of this cultural shift was to transform our service model. We're making it easier for advisors to do business with us by simplifying your experience, enhancing what we offer, and further supporting you. We aim to provide a best-in-class service experience that you won't find anywhere else in the wealth management industry.

Much like the progression of our investment platforms and technology capabilities, a big step in our service transformation — toward what we refer to as our Care Model — was to ensure you had the options and flexibility you'd expect from LPL.

In service, that means meeting you when, where, and how you want. While traditional call center models have mostly served our industry, we often say, "the best call is the one you don't have to make." So we've taken a page from other highly service-oriented organizations like Amazon and Google, where you typically interact through something called OmniChannel — providing you with information at your fingertips in the channel of your choice.

We've developed better content and help features throughout our technology tools, so you can easily find the answers and valuable information you need without even asking for help! The next phase in this journey will be Live Chat, allowing you to instant message a service professional without picking up the phone.

And of course, when you do want to connect with us on the phone, we're taking the best of human empathy and expertise and matching that with technology-enabled accuracy, speed, and accessibility. Here are a few ways we're making your interactions with us as easy and effective as possible:

• Voice analytics: This will help us improve how we understand and react to your questions. We'll even explore how your voice could help serve as the way we identify you.
• Automation and robotics: Beyond service, we'll continue to evolve our intelligent automation and robotics capabilities to give you quicker turnarounds on your transactions.
• Let us call you: Simply make a request, and we'll find the best service professional to answer your question and call you back.
• Case management across the firm: When you have complex problems, we'll leverage our effective Case Management system but bring it to more areas of the firm   –  so everyone is better connected  –  for you.

Regardless of how you want to interact with us, this is a people business. And we've found that exceptional service is cultural. It's creating a team environment that's rewarding, empowering, and inspiring. And the teams are recognized for excellence both internally with their peers throughout the organization and by advisors. We've created an environment where service is a career destination — and that means you have access to highly skilled professionals.

Creating an exceptional experience for you isn't limited to our service, training, and operations teams; it's core to who we are as a firm. It's built into our culture of putting advisors at the center of every decision we make. So while the journey to best in class never ends, as long as we're putting advisors at the center of everything we do, we know we're on the right track.

With more growth comes better security

Bigger isn't always better, but – in the competitive world of financial services – bigger is often safer.

We often say we've been growing big by thinking small, which is one way of saying that although we're committed to growing. We'll never deviate from our guiding principles of supporting individual advisors, their independence, and their clients. We understand and value the importance of personal relationships in our business. We also remain steadfast in our ability to be agile and adapt — which is vital to keeping our advisors at the forefront of any industry shifts.

Thinking small and staying agile. These are valuable principles to stick to. But so are maintaining security, leveraging scale, and leading with strength.

And to do all of that, you need the advantages of size, solid financials, and a drive to keep growing. At LPL, we tick each of those boxes. Ten years after LPL was founded, we supported 3,010 advisors and 248 institutions. Another ten years later, those numbers were up to 11,950 advisors and 777 institutions. Today, we support over 17,000 advisors and nearly 800 institutions. Even in a year as volatile as 2020, over 800 new advisors joined LPL, with nearly $41 billion in new client assets.

So what do all those numbers really mean?

• We have capital to invest. In 2020 alone, we were able to invest $1 billion in growth drivers for our advisors.
• While remaining flexible. Our strong financials also allow us to remain flexible and adjust our spending in response to any macro environment condition.
• And perhaps most important of all, we're a stable, secure firm.

When other firms are in survival mode, we stay in growth mode. And the more we grow, the more we can invest in you.  We provide you with the latest technology, better service, and more support. Because when we lead with strength, we believe we can do more for you, your business, and your clients.

From the nation’s largest independent broker/dealer to…

Everything about where we are today has been shaped by all the history we've covered here (and much more). The innovative investment platforms. The strength and stability of our size. The vision of our founders and today's leaders. If we look back on just the last five years, however, we see where we reached a point for LPL to not necessarily stop leading—but to start listening.

The past few years' advancements directly result from advisor feedback and guidance, helping us focus on what matters in an advisor's practice and fine-tuning these resources and services. That's how we can truly be the partner you want and deserve.

And with that feedback and invaluable input, we're still creating industry firsts like:

Business Solutions – our suite of unique services that provide the focus, expertise, and scale to help you run your business efficiently and maximize your impact.

ClientWorks Connected – our open-architecture platform that allows you to seamlessly connect to LPL technologies or third-party programs, making each step in your client workflow as frictionless as possible.

Meeting Manager – the latest innovative roll-out coming in early 2021. We estimate it takes you 45 minutes to prepare for every hour-long client meeting. That inspired us to build Meeting Manager, which pulls data from six systems into one — eliminating all the tedious behind-the-scenes effort to compile various data and reports. It's all in one place, ready to go.

So what's next for LPL, and even more importantly, our community of advisors and institutions? We've been known as the nation's largest independent broker/dealer for 25 years, and we value that honor. But what will LPL be known for in the future? An RIA, a custodian, a professional services provider, a fintech company? The important part is, through all of the change we've experienced so far, one thing has stayed the same: LPL's commitment to supporting independent financial advisors.

We are here to help you succeed — however you define success. Seeing your clients reach their financial goals. Growing your practice. Running an efficient business. Finding that balance between work and everything else that brings you joy. Because LPL is more than the services we provide or the investments we manage. We're a company that values financial advisors, puts them at the center of everything we do and takes care of them.

Because when we take care of our advisors, they can take care of their clients.

And we're not done yet.

LPL Financial is the nation’s largest independent broker dealer as reported by Financial Planning magazine, June 1996-2020, based on total revenue.

There is no assurance that the Advisory platforms discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities will be required to affect some of the strategies. Investing involves risks including possible loss of principal.

The views and opinions expressed by the LPL Financial Advisor(s) are 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.

Platania Financial and LPL Financial are separate entities.