LPL to broaden recruiting reach in 2020

Coming off a banner year in financial adviser recruiting, LPL Financial intends to focus in 2020 on broadening the scope of advisers and registered reps who affiliate with the broker-dealer.

Some details of LPL's plans are still vague, but the firm's CEO, Dan Arnold, made it clear on a conference call with analysts Thursday that it would be a focus throughout this year.

Last year, LPL said it was creating a new model that would employ brokers working directly for the firm along with independent contractors, which are LPL's bread and butter. To that end, LPL's parent company, LPL Financial Holdings Inc., announced in May that it was buying a small broker-dealer in Florida, Allen & Co., with 30 advisers and about $3 billion in assets. Those advisers are employees of the firm.

LPL is also rolling out what it is calling a "premium" model to assist breakaway brokers with the work involved in setting up a business, such as finding office space and arranging employee benefits, as well as an offering focused on registered investment advisers.

"We also continue to make progress on the development of our new affiliation models," Mr. Arnold said during the conference call to discuss LPL's fourth-quarter earnings. "This quarter, I will highlight our new premium offering. After bringing this model to market in the third quarter, it has been well received and generated good feedback from prospective advisers."

"We now have our first couple of committed practices which we expect will join over the next few months and we are encouraged by our growing pipeline of interested advisers," he said. "As we look ahead, we believe enhanced performance in our traditional markets combined with new affiliation models can drive our recruiting results over time."

Mr. Arnold said that in 2019, the firm recruited advisers with $35 billion in assets under management, a new annual high. LPL finished the year with 16,464 advisers and total assets of $764 billion.