LPL's Arnold sees different financial advice business post COVID-19

LPL's Arnold sees different financial advice business post  COVID-19
Less real estate and more reliance on artificial intelligence could be in the industry's future
MAY 01, 2020

The wealth management and financial advice industries are working through the challenges created by COVID-19 and will eventually see deep changes in the pandemic's aftermath.

That's the assessment of Dan Arnold, CEO of LPL Financial, the largest independent broker-dealer with 16,763 reps and advisers.

"We believe there's a real ripe opportunity, that this creates an opening to think about things in a different way and opens up the playing field and ... do experimentation, to do things that you may never have done otherwise," said Arnold, who made his comments late Thursday on a conference call with analysts to discuss his firm's first quarter earnings.

"There could be jobs that you didn't think were possible to do remotely from home that all of a sudden by doing it, you now have a different point of view on that," Arnold said. "And that shapes how you think about managing your workforce, flexible schedules, how you access talent and even how you manage your real estate portfolio."

Paying for real estate is one of the biggest costs for brokerage firms like LPL, and with firms reporting that 90% or more of their workforce is now operating from home, broker-dealers will likely be looking to pare back on that expense in the future.

"We believe the whole use of robotics, [artificial intelligence] and digital tools will be different going forward, people's thinking around outsourcing and supply chains will be changed forever by this," he said. "There will be more to emerge. It's early."

LPL added 299 net new advisers during the first three months of 2020, more than three times the amount for the same period last year, when the firm reported 80 net new advisers. The firm has been aggressively recruiting financial advisers and reps, as well as making small acquisitions.

LPL’s total brokerage and advisory assets by the end of March decreased 2% year-over-year to $670 billion, while the S&P 500 index was down 9% year-over-year, according to the company.

Latest News

Summit Financial, MassMutual boost advisor appeal with growth-focused tech
Summit Financial, MassMutual boost advisor appeal with growth-focused tech

Summit Financial unveiled a suite of eight new tools, including AI lead gen and digital marketing software, while MassMutual forges a new partnership with Orion.

SEC enforcement actions drop sharply, with focus shifting to investor fraud
SEC enforcement actions drop sharply, with focus shifting to investor fraud

A new analysis shows the number of actions plummeting over a six-month period, potentially due to changing priorities and staffing reductions at the agency.

MAI inks mega-deal with Evoke Advisors to form $60B AUM firm
MAI inks mega-deal with Evoke Advisors to form $60B AUM firm

The strategic merger of equals with the $27 billion RIA firm in Los Angeles marks what could be the largest unification of the summer 2025 M&A season.

Employees tapping retirement funds amid financial strain, led by Gen Zs
Employees tapping retirement funds amid financial strain, led by Gen Zs

Report highlights lack of options for those faced with emergency expenses.

LPL Financial on target to retain 90% of Commonwealth financial advisors, Wolfe Research analyst says
LPL Financial on target to retain 90% of Commonwealth financial advisors, Wolfe Research analyst says

However, Raymond James has had success recruiting Commonwealth advisors.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.