LPL Wields Major, if Unglamorous, Recruiting Advantage
December 5, 2017
LPL Financial is beating back rivals to lock up billion-dollar practices at the National Planning Holdings units it recently bought. And while incentive money, culture and scale are always factors in these recruiting battles, LPL wields an ace card: A relatively easy transition.
Last week, $1.1-billion Discovery Financial Centers, in Red Wing, Minn., waved off outside suitors and agreed to move to LPL. In October, $2-billion Trilogy Financial, in Huntington Beach, Calif., announced it would join LPL. And LPL plans by the end of the month to announce deals with additional billion-dollar firms, according to Financial Planning.
These businesses belonged to some of the four broker-dealers whose assets LPL acquired in August. LPL chief Dan Arnold has projected that his firm will hang on to about 70% of the four B-Ds’ production in an initial transition wave.
Poaching activity has been fierce, however, and rivals have managed to lure away at least 278 NPH advisors with $11.7 billion of assets, according to Financial Planning. One likely reason some big teams are staying with LPL is to avoid administrative migraines, it appears.
Take repapering accounts, says Minnesota-based recruiter Jon Henschen. Transferring direct-held investments like mutual funds and annuities, for instance, can entail “a tsunami of paperwork that reps have to go through.” The process is automated for those who stay with LPL.
This home-field advantage may also mean that LPL doesn’t have to get into scorched-earth retention-bonus competitions with rival firms. “It’s a combination of simplicity and compensation,” says Henschen.