LPL closing Worksite Financial Solutions 401(k) platform

Some LPL advisers feel the firm is offering less support to retirement plan specialist advisers

May 14, 2018 @ 2:35 pm

By Greg Iacurci

LPL Financial announced that it is closing Worksite Financial Solutions, a program that helps 401(k) participants and advisers with rollovers from retirement plans, at the end of September.

Andy Kalbaugh, managing director and divisional president of national sales and consulting at LPL, announced the firm's intent May 7 in a message to advisers, saying the firm would end the program over the next five months.

"We've determined the Worksite Financial Solutions program has not served a substantial population of our advisors, nor has it met the return on investment needed to continue," Mr. Kalbaugh said in the communication, which was read to InvestmentNews by an adviser who received it.

Lauren Hoyt-Williams, a spokeswoman for LPL — the nation's largest independent broker-dealer, with more than 16,000 financial advisers — confirmed the upcoming program closure.

Worksite Financial Solutions, launched in 2013, offers services such as education and advice to employees, as well as a so-called "transition solution" to provide rollover guidance to participants.

Some advisers who use the program said the rollover portion is most helpful to them, because LPL would deliver frequent reports with information about retirement-plan distributions — for example, detailing if a participant had rolled over to an IRA or cashed out a 401(k). That could help guide discussions with clients and participants, advisers said.

"It was a really good program," said one LPL retirement plan specialist adviser.

The adviser, who requested anonymity, called Mr. Kalbaugh's announcement "disheartening" because he believes the move — when assessed together with some other developments at LPL — hints at the firm's shifting attention away from the retirement plan group, called LPL Retirement Partners.

Instead, management is putting a lot of focus on LPL's Small Market Solution product, a kind of bundled platform that LPL advisers who are not retirement specialists can use to work with 401(k) plans, the adviser said.

"The guys that do plans, we're losing our services," the adviser said. "It feels like LPL is losing its focus on the retirement plan market."

Ms. Williams, the LPL spokeswoman, pushed back against this assertion, saying the firm remains "committed" to advisers serving employer-sponsored retirement plans.

"We will leverage savings from this program and reallocate it to enhance components of retirement plan support, including financial wellness, marketing resources and advice programs that enable advisers to serve in a fiduciary capacity," Ms. Williams said.

LPL is also "increasing capabilities within our Retirement Partner Consulting Program, and creating a suite of marketing materials for insurance, high-net-worth and trust clients to help our advisers capture ancillary business related to the employer-sponsored plan space," she added.

Worksite Financial Solutions aside, there have been some changes afoot in the LPL ranks.

Independent Financial Partners, a mega hybrid RIA with roughly $9.5 billion in assets under management and a large number of retirement plan advisers, is leaving LPL and creating its own broker-dealer. Resources Investment Advisors, another multibillion-dollar hybrid RIA, left LPL last year.

"There's been a number of large groups leave, and all of a sudden they announce this," the LPL retirement adviser said, referring to the Worksite announcement.

David Reich also left last year as head of the Retirement Partners unit, which is now helmed by Bill Beardsley.


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