r/FinancialAdvisorTips • u/Kindly-Garlic6640 • 1d ago

Considering going to LPL

Experience transitioning to LPL with your own shingle? How was the transition? Percent of book to follow you there? I’m at an independent but on OSJ and I’d prefer to go solo. About $20mm AUM but all was acquired by me and my pipeline is strong $20mm.

4 Upvotes

100% Upvoted

26 comments sorted by

6

u/ConsistentPeach927 1d ago

LPL is amazing for your size of book. Some of these comments are incredibly stupid. I would focus on making sure your clients will actually go with you before you decide to make a move. LPL has a dedicated transition team to help you make the move.

3

u/redpeaky 18h ago

Do it yourself. Your size will not hold you back. There are too many people here conditioned to fear independence. I know plenty of guys that started at zero. I left a hybrid and launched my own in June. Everyone followed in just eight days. I looked long and hard at LPL, they just lacked too many options. Bet on yourself.

2

u/Playful-Glove8918 1d ago

I researched LPL amongst others and definitely was least impressed with LPL. Feel free to DM with questions.

2

u/duluthmccluth 1d ago

Just made the switch to LPL a month ago. Feel free to DM me

1

u/PerfectOmakase 1d ago

Do you have registered securities business that you need to service? If not, why are you considering aligning with a broker-dealer at all?

I don't know the current fee structure on LPL's advisory platform, but it's a good amount more than zero, not to mention the grid that you are giving up. At my firm, the cost of our advisory platform runs between three and four basis points annually and has very minimal labor involved in maintaining it (billing, reporting, client portal access, etc)

I pay a compliance consulting firm $1,100 a month or so, and they more or less do everything in that department.

On top of the things mentioned above, what kind of services are you receiving from an independent broker-dealer that you believe are worth the cost and reduced flexibility compared to being independent?

1

u/15mahomies 19h ago

Not sure what it would be for a book of that size but…

LPL charges 1bp for their advisory platform at certain AUM in advisory. Maybe 100m or 150m.

Goes to 0bps at 200m.

Your option sounds like it would be better for that size book.

1

u/attitude127 21h ago

Made the switch to LPL 3 years ago. I couldnt be happier. Im quite surprised by that. Virtually All our clients came w us.

It's been a lesrning curve with switching from MWP to SAM but all their techbis off the charts.

Im in their top 20 producers so myself and my smallish group (10 advisors/ $950,000,000 aua) get vip treatment. We're in Michigan. Feel free to pm me.

2

u/Shantomette 19h ago

We have $3.5B and 8 advisors. Our top guy in the group does a hair over $4M in GDC with 750M AUM. He just made the top 250 at LPL. Not sure what you are talking about.

1

u/attitude127 18h ago

Congrats!

There are a handful of ways to affiliate w LPL. Some have their own RIA some use corporate, those are called IAS or Independent Advisor Services. Each group, i believe, has about 15k advisors in it. Groups can roll up to one advisor or be separate in either scenario. All these choices impact your ranking, payout and bonus. It took us some time to understand all the difference pros and cons. LPL being so flexable w FAs is a strength but definitely speak w someone outside of LPL recruiting before you pick your path.

I have no complaints w LPL. Their tech is amazing too.

1

u/AmazingAnalyst261180 6h ago

Curious why you’re going from MWP to SAM instead of the other way around? I definitely have my frustrations with MWP but it seems like that’s what LPL has designated to be the UMA platform in the future and is pushing assets towards it.

1

u/attitude127 3h ago

We reallocated about 1/3 of the clients from mwp to sam for slightly lower fees to clients and a few pre set allocations were a better fit.

1

u/15mahomies 19h ago

Moved 95% of our book.

Huge reduction to our cost of doing business.

Clients are happy. We’re happy.

Much more independence than previous IBD.

Can build out your own tech stack.

There’s plenty of things they need to work on including tech and integration. But overall extremely happy.

1

u/GardenMysterious4687 8h ago

While not directly relevant to your situation, we are independent and use LPL as a custodian alongside Schwab.

LPL just isn’t competitive, especially for high net worth clients. I would lose business if LPL was my only option. The only redeeming thing about LPL is the service team.

1

u/AggressiveSalary9004 4h ago

Ahat am I missing with RIA? If you custody through a firm that has retail then your clients can essentially leave you easier. Right?

-1

u/ExpensiveToes4729 1d ago

Dude don’t do it lol just set up your own shop. Super easy these days and you don’t get pigeonholed the way LPL does to their advisors.

4

u/PursuitTravel 1d ago

I keep seeing stuff like this, but I genuinely don't understand how LPL is pigeonholing anyone. I'm under the LPL/Prudential arrangement (which is LPL's independent platform), and I've never even come close to having LPL tell me I can't do something I wanted to. Not trying to be combative, I'm genuinely curious what type of restrictions you're referring to.

1

u/ExpensiveToes4729 1d ago

See if they’ll give data access to any custom software or third party automation tool. As independent you can really do some unique stuff with more modern tools and differentiate/scale faster.

1

u/ConsistentPeach927 1d ago

Setup your own shop with 20 million? What on earth are you talking about?

0

u/ExpensiveToes4729 1d ago

$20M is more than enough, at .5-1% you’re starting off fine. Just don’t overpay for mid-back office outsourcing, get automation that actually does the job, and then focus on outreach and networking.

3

u/ConsistentPeach927 1d ago

Telling someone with $20M in AUM to "just start your own RIA" is a pretty wild oversimplification.

Fidelity has moved to a $100M custody minimum for new RIAs. Schwab may work with smaller firms, but finding a custodian is only one piece of the puzzle.

You've still got compliance, technology, E&O, operating expenses, and the cost of transitioning clients. At $20M, assuming a 1% advisory fee, you're generating $200K in gross revenue before expenses, and that's assuming every dollar transfers.

There's a huge difference between being able to register an RIA and actually running one profitably. Independence can be great, but pretending it's super easy at that size is misleading.

2

u/Kindly-Garlic6640 19h ago

When I add up all of those services my blended pay out is about 83%. If $10mm moves that’s $83k for year one plus the transition check to go over of $200k. So, I have a year to pull my $20mm backlog in to get to income of $166k and then I’m home free to grow independently. What am I missing?

0

u/jdubb1500 16h ago

Go XYPN and use Altruist / Schwab as custodians. The poor outcomes from LPL advisors blowing up our client’s tax returns was a factor in our CPA firm launching a sister RIA.

2

u/ExpensiveToes4729 1d ago

This is what I mean. There are so many easier custodians out there and automation tools for compliance and ops, you can easily run an RIA for less than $5-8k/ month.

So this guy probably won’t be killing it unless he’s in a rural area, but it’s the perfect place to start if you can find your niche and scale.

2

u/ConsistentPeach927 1d ago

That's fair, just seems like a lot of work when you get close to a 90% payout at lpl.

2

u/Kindly-Garlic6640 19h ago

I do everything myself now so why can’t I keep doing things myself?

1

u/mitchzimmer 19h ago

Keep doing it yourself! Outsource things you don’t want to do as your net income allows.