Bill Dwyer won’t say whether the traditional wirehouse, employee-channel firms should be keeping an eye on LPL.
“It’s not our place to discern whether they should be worked about us or we should be worried about them,” said Dwyer, LPL’s president of sales and national marketing, in an interview Thursday. “There’s plenty out there for everyone.”
However, in the last few years—make that even the last few months—LPL has been making its presence felt. The firm recently went public and in terms of advisor count, it stands as the fourth-largest firm in the brokerage space.
For the average investor, LPL doesn’t have the name recognition that Merrill Lynch or Morgan Stanley Smith Barney has enjoyed in years past. But that doesn’t seem to matter.
For LPL, Dwyer said, the goal has been to reach the critical mass so the firm can make the investment in technology and other processes that help advisors grow their businesses. He counts more sophisticated technology, a wider range of products and a strong independent advisory model as the reasons for his firm’s success.
There has been a series of steps LPL has taken in its march toward dominating the independent space. For instance, Dwyer said, in 2006, LPL’s business consulting unit assigned a relationship manager to more than 70% of production. With salesforce.com, LPL provided improved customer relationship management software for help its advisors segment and manage their business so they could spend more time with investor-clients. The firm also brought in new trading software to help advisors rebalance client assets.
In 2008, LPL launched its “Model Wealth Portfolios” to further help advisors with manager selection, rebalancing asset allocation and providing more opportunity for ETF investing.
Earlier this month, LPL, already one of the top five distributors of variable annuities, announced the launch of a fee-based variable annuity platform. Through the platform, LPL’s advisors can manage VA assets within a fee-based relationship and on a discretionary basis. This will enable advisors to offer active portfolio management with the protection of an annuity.
The platform offers variable annuity products from Allianz Life Insurance Co. of North America and Allianz Life Insurance Co. of New York, Axa Equitable, Lincoln National, Prudential Annuities and Sun Life Financial.
And while the largest, traditional firms have concentrated on the high-net-worth and ultra-high-net-worth investor market; LPL has cast a wider net.
Dwyer points to the demographics of retirement, noting that 7,000 people a day are retiring and that by the year 2020, there will be 43 million people in the 55 to 65 year age group—more than 100% than are in that group since 1988, versus today. And those years are the one that clients really focus on investing, Dwyer said. LPL, paying attention to that trend, acquired National Retirement Partners in July. NRP provided LPL with more the 150 offices in more than 39 states. NRP’s independent advisors provide plan consulting, fiduciary best practices and due diligence to retirement plan sponsors.
So, LPL is looking at the mass affluent as well as the ultra-rich. According to Dwyer: “We’re helping investors in Peoria as well as in New York City. The high-net-worth market gets a lot of press but the reality is that there is opportunity at both ends of the spectrum.”