For the second consecutive year,
LPL Financial Services is giving a bump to its bigger-producing registered reps.
Starting in January of 2008, LPL is cutting ticket charges on a wide swath of its mutual funds in its proprietary asset management program, called SAM.
The firm, the largest independent-contractor broker-dealer and based in Boston and San Diego, is also reimbursing advisers’ administrative fees on advisory or asset management business.
That new program is based on tiers with a base of $250,000 in advisory gross dealer concession.
LPL formally announced the new program to its advisers on Tuesday in Boston at its annual meeting. After its recent spate of acquisition, LPL now has close to 10,000 affiliated registered representatives across various channels.
In 2007, LPL began giving a new production bonus to its bigger advisers.
That bonus program created payouts of up to 98% of GDC – fees and commissions – for the firm’s elite reps.
Those changes will likely result in $28.4 million in bonuses paid to 2,800 affiliated reps and advisers, said Bill Dwyer, president of LPL’s independent adviser division.
Next year’s reduction in some mutual fund ticket charges and reimbursement of some administrative fees could result in LPL returning as much as $30 million back to its branches, he said.
And the giants of the custody business for registered investment advisers such as Schwab Institutional better watch out, Mr. Dwyer said.
“This is going to put us in an enormous competitive advantage for the custodians in the marketplace,” he said.
Mr. Dwyer also shrugged off a common criticism in the industry that LPL’s SAM platform is expensive.
“Expensive is a relative term,” he said, noting the consulting-type work in legal and compliance LPL offers advisers.
For the complete report, see the upcoming Aug. 6 issue ofInvestmentNews.
