After years of effort to move to a new platform for wealth management, LPL Financial is still fumbling around with the latest technology for its more than 15,200 advisers.
LPL advisers on a private LinkedIn chat room this month were sounding off about pending changes — the fear being that the company will require a move to the new system, ClientWorks, before it is fully ready.
The change is coming Saturday. On Feb. 24, when advisers try to access the old system, BranchNet, they will be directed to ClientWorks automatically. Once they are there, however, they can toggle back to BranchNet.
LPL's advisers are simply concerned the new system is not up to snuff.
They were bemoaning the switch, asking why they should move to the new platform from BranchNet, which was first introduced 17 years ago. At the turn of the last century, LPL was a private company with about one-fifth the number of reps it has under its roof today. The advisers in general wanted improvements made to ClientWorks before LPL completely shut off BranchNet.
LPL's move to the new platform has been difficult. Indeed, introducing new technology in any line of business is particularly challenging these days. Innovation begets innovation, and settling on a version of a new wealth management platform means deciding the technology is ready, even though an improvement may potentially be weeks or months away, making the current system out of date.
Think of consumers who love the iPhone and bought the iPhone 7 in 2016, only to watch the iPhone 8 and X released the next year. Brokerage firms face the same problem with their technology.
When LPL announced ClientWorks to its advisers at its annual meeting in August 2014, the company said the full product would be released in the spring of 2015. The firm blew past that deadline; at the start of 2016 about 3,000 LPL advisers had full access to ClientWorks, with other functions being introduced over time.
Making matters more difficult, Victor Fetter, LPL's former chief information officer, left the firm last year to work at tech company Vertiv Inc. Mr. Fetter was one of the executives at LPL most responsible for the rollout of the new technology platform.
Because the chat room is private to LPL advisers, I called three of the reps whose comments were relevant to the problems with ClientWorks and asked if they wanted to be quoted for this column. They asked to remain anonymous, and that their comments not be quoted directly.
LPL has been a respected business partner over the years, they said, and the advisers did not want to sound off in public about their grievances. By commenting in the LinkedIn chat room they were attempting a constructive dialogue with LPL and didn't want to drag the firm's tech problems into the spotlight.
So here's a broad recap of the LPL advisers' comments: They want senior management to pay attention to their requests; they want ClientWorks cleaned up and bug-free before the change; and they want trading to be as efficient as possible and on par with the rest of the industry.
In the end, some LPL advisers may simply be having a hard time figuring out a new system and feeling anxiety as they prepare for the changes, which is also occurring as they get clients' tax returns ready for the IRS.
"We understand that technological change can be difficult, and are fully committed to supporting our advisers as they transition to our new, more modern and secure ClientWorks platform," said LPL spokesman Jeff Mochal in an email. "We've created a dedicated ClientWorks service team specifically to support advisers who need it, and we plan to go live with more than 40 new enhancements to the platform in the next 60 days."
Introducing firm-wide changes to wealth management and brokerage platforms is among the most difficult tasks a brokerage firm can manage, and are notorious for annoying large groups of advisers.
In 2009, Morgan Stanley bought Smith Barney from Citigroup, and three years later moved those brokers onto Morgan Stanley's platform. But the integration was full of problems, and Reuters reported at the time that "the new brokerage technology platform has been beset by glitches that have frustrated the firm's financial advisers and made a long and costly merger more expensive."
Meanwhile, advisers said competitors are circling around LPL advisers and touting their technology.
In particular, they said Ron Carson, the former star LPL adviser who left the firm last year to join Cetera Financial Group, is flashing his new tech platform in meetings with advisers, as he attempts to lure them to move to Carson Wealth Management Group.
Mr. Carson in January 2017 acknowledged there was friction between him and LPL, and said in an interview that he ultimately lost faith in the ability of LPL to provide the technology and services he felt he needed to move his firm into the future.
"The things critical to our future success were not available at LPL," Mr. Carson told InvestmentNews at the time.
Which means making ClientWorks a success is critical to LPL.