Playing The Long Game – LPL Focuses On Long-Term Relationships With Their Advisors

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The seeming game of musical chairs which advisors have been playing when it comes to their firm partner has certainly been a watershed moment in financial services. Many large firms have been forced to stand up and take notice as more and more high-producing teams and advisors make the choice to end long-term firm relationships in search of greener pastures. The reasons for advisor attrition – on surface level – are varied and yet can essentially be boiled down to one main cause. Simply put, advisors today are tired of the top-down management paradigm of the financial services industry of years past and instead want an engaging, productive, and dynamic firm partner with a culture that puts the advisor first.

Understanding this shift and putting into place programs, services, and resources which stymie the impact of advisor attrition has become essential to the business plan of any large firm interested in building scalable success. The latest firm to recognize this and release new innovations in support of their advisors is LPL Financial, who this week announced their newest program aimed at supporting their advisors in M&A and succession deals. LPL’s self-described “end-to-end” solution is resource based and includes education, managerial support, and capital to realize M&A and succession growth strategies for their team of advisors while simultaneously providing the framework and relationship structure upon which long-term LPL advisory relationships will be built.

Consider first the education component of the suite of services LPL has comprised. as part of its M&A and succession program. This proves particularly insightful as LPL takes into account both the resources and mindset necessary for its advisors to achieve success. For instance, when it comes discussing retirement with their clients, advisors are diligent in their approach. However, in considering their own retirement planning, many advisors will admit they have given it little to no thought. LPL by offering their advisors both tools and internal expertise in equal measure, allow their advisors to be as strategic about their own future as they are about their client’s. This philosophical approach not only sets the LPL advisor up for sustainable success through the recognized financial boost a successful M&A or succession deal can provide, but illustrates through action a commitment by LPL to its advisors and their achievement.

Another component of the LPL M&A and succession suite of solutions is managerial support, in particular through a program called “CFO Solutions”. Through this program, LPL will supply their advisors actively pursuing M&A and succession deals with an accountant who will serve as the advisor’s defacto Chief Financial Officer and whose focus is to guide the advisor in successfully executing their M&A or succession transaction. By tearing down the wall that normally exists between management and advisor and bridging the gap by providing the human capital required to complete M&A and succession transactions, LPL is showcasing their ability to work in managerial partnership with their advisors and bucking the ‘us versus them’ dynamic so prevalent at large financial firms today.

Lastly, through their new M&A and succession program services, LPL has proved willing to put their money where their mouth is when it comes to their advisors and invest their own capital to help their advisors achieve success. LPL’s own storied company history when it comes to M&A, coupled with the strength of the company balance sheet, uniquely positions LPL to offer broad support to its advisory team on a financial level when it comes to M&A and succession deals. Through the new program, LPL advisors will have access to a variety of loan programs – among them credit solution, growth loan, and acquisition loan options – each uniquely suited to filling the either short-term or long-term capital needs which enable the dedicated LPL advisor to realize their M&A and succession planning goals.

Taking a step back, we would be remiss if we didn’t mention that much of the structure of LPL’s M&A and succession program draws striking correlations with our own recruiting philosophy when it comes to such deals, in particular with succession planning. Our branded DUAL-MONETIZATION(TM) succession strategy places a similar emphasis on education, managerial transparency, and dynamic capital infusion in order for the advisor nearing retirement to maximize the value of their book of business by up to 3 times. Where DUAL-MONETIZATION(TM) diverges, however, is in its execution in so much as it requires the advisor to, as part of its construct, transition to a new firm. Though a transition may not be the ideal scenario for all advisors, DUAL-MONETIZATION(TM) can prove a strategic boon for the advisor looking to capitalize on their book of business by increasing personal payout through the dual cash infusion of both the transition and succession bonuses achieved in making such a move.

Regardless of the dynamics of the succession and M&A strategy, in a financial services industry where firms tout a variety of internal programs and services under the guise of supporting their advisors, LPL’s M&A and succession solution suite proves to be a strategic stand-out as it showcases the best of what can be achieved when a large firm, through practical and actionable planning, puts their advisors first. As the LPL plans shows, a road map to the future isn’t one based on the C-suite and revenue goals alone. Instead, the road map to success in financial services is now one which is based on the hard-learned lessons from the past, encompasses engaging advisors in a long-term vision for the future, and provides the tools and resources necessary to make that vision of reality. In essence, simple, practical, and actionable solutions are key when it comes to programs aimed at forging the much prized long-term advisor-firm relationships on which a stable and prosperous financial services industry can be built.

Frank LaRosa
Senior Business and Transition Consultant
ELITE Consulting Partners

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