The No. 1 IBD has miles to go in its mission to strip down and rebuild its once 'pretty horrible' platform but CIO Victor Fetter says dramatic changes are already evident

August 31, 2015 — 6:19 PM UTC by Lisa Shidler

1 Comment

Brooke’s Note: The key to long-term progress is discipline. The hallmark of discipline is doing lots of work and, initially, having disproportionately little to show for it. LPL Financial is in the midst of a technology overhaul that’ll take years to complete. But one outward sign of inward progress is its very outgoing hires of ringers. Victor Fetter, who literally has CTO as the middle of his first name, just added another major big-picture software talent who gained an appreciation for LPL by watching brokers from his wirehouse world leave for it.

In the latest in a series of gut-the-mansion moves by LPL Financial, it has brought aboard a former wirehouse technology chief.

The country’s San Diego-, Boston- and Charlotte, N.C.-based largest independent broker-dealer hired Anthony Perkins to fill the newly created post of executive vice president of technology product development as it races the clock to get its platform RIA-friendly to catch a market shift to fee-based advice. In June LPL hired an architect of the Morgan Stanley-Smith Barney technology merger, Tom Gooley.

That’s hard enough when you need to meet the diverse set of needs of 14,000 financial advisory practices — brokers, hybrids, OSJs and RIAs — but exponentially more difficult when you need to recast concrete while the family continues living in the house, according to Joel Bruckenstein, publisher of Technology Tools for Today and producer of the annual Technology Tools for Today (T3) conference.

“It’s like fixing a building on a crumbling foundation. He had to build new foundation. For the first year, you didn’t see anything because they spent their time building new infrastructure. They’re unveiling a version of ClientWorks and that’s the new version to replace BranchNet. BranchNet has been pretty horrible for years. The problem was Victor couldn’t do everything he wanted fast enough.” See: LPL poaches top Dell exec to rewire outsourcing and head hundreds in new technology 'town’.

Perkins, who served as a chief technology officer at Wells Fargo from July 2013 to August 2015, will oversee the evolution of ClientWorks, which is replacing BranchNet, LPL’s current tech platform. See: LPL Financial tosses its sales pitch to 7,000 in its HQ city of Boston.

Perkins is “polished, charismatic, competent and hardworking” says a former colleague.

“He’s not a techie CTO,” the ex-colleague says. “He’s more of a business CTO. He’s more of a make-it-happen executive.” In previous gigs, Perkins was not shy about insourcing outside technology, he adds. Perkins, a sailor, has managed to locate himself in the New York tri-state area but kept his sailboat in Marblehead, Mass.after leaving an early career post at State Street. Perkins may have moved on from Wells Fargo quickly because he preferred not to move to St. Louis where the company bases its advisory business, the ex-colleague says.

Victor Fetter: I'm seeing a shift that advisors don't want to be a CTO... they don't want to be a lot of time cobbling together different solutions.
Victor Fetter: I’m seeing a shift
that advisors don’t want to be
a CTO… they don’t want to
be a lot of time cobbling
together different solutions.

Overseeing this project is LPL’s head of technology, Victor Fetter. He joined LPL in 2012, charged with rebuilding the firm’s performance reporting technology to compete with premier RIA technology firms. See: LPL poaches top Dell exec to rewire outsourcing and head hundreds in new technology 'town’.

Six feet tall but still invisible?

When asked about industry observers who say that LPL’s software capabilities are still not showing signs of advancement because of the need to first rout the rot, Fetter says that’s not the case at all.

“It’s anything but the same. If you took a snapshot of the last two years, you start thinking about solutions we have deployed. There is new trading and rebalancing and a new portal. We’ve been changing compliance systems and transaction processing systems. That’s been significant. We’ve been making substantial investments.” See: In WSJ article, Mark Casady issues a series of mea culpas and positions LPL as a turnaround story.

Also this month, the big IBD launched a new vendor affinity program that includes Orion Advisor Services LLC to offer LPL advisors access to selected vendors at discounted prices. Last year, LPL forged a partnership with Redtail Technology Inc. for customer relationship management.

ClientWorks will allow advisors to better streamline trading and cash management capabilities, thus allowing advisors to access the system through a phone or tablet. But ClientWorks won’t be fully available until spring 2016, and even then it will have a ways to go ways before it achieves performance-reporting parity with the platforms of dedicated tech firms like Orion, Tamarac, Black Diamond, FinFolio, Addepar Inc. and Envestnet Inc.. See: Victor Fetter turns his guns on LPL’s thorniest software challenge — 21st century performance reporting

Still, Fetter is convinced that advisors are moving back to the future when it comes to wild varieties of choice versus a few highly integrated ones.

Cobbler’s child has no shoes

“I don’t spend a lot of time looking and comparing the competition but I think we have a lot of feedback. We get feedback from what they do. I’m seeing a shift that advisors don’t want to be a CTO. They want the best we have to offer that will enable their business. Sure, they want to stay current but they don’t want to spend a lot of time cobbling together different solutions.”

Joel Bruckenstein: BranchNet has been pretty horrible for years. The problem was Victor couldn't do everything he wanted fast enough.
Joel Bruckenstein: BranchNet has been pretty
horrible for years. The problem was
Victor couldn’t do everything he wanted
fast enough.

Certainly the pace of change has improved, says Bill Winterberg, founder of FPPad.com, an Atlanta-based technology consulting firm.

“It’s accelerated after Victor’s hire [away from Dell] and his involvement. His challenge was learning the business initially and identifying ways he can introduce improvements and introduce new technology. He can’t just turn a gadget on Monday and expect 14,000 people to be happy.”

One former LPL technology user now happily ensconced with the system of Omaha, Neb.-based Orion thinks LPL is on the right track.

“I think they’re working hard. They have a lot of work to do,” says Ron Carson, who built his empire, including Carson Wealth Management, at LPL, became an RIA in 2011 and then bought the software services of Orion Advisor Services. See: Ron Carson chooses Orion-Salesforce software for his $5-billion RIA as he lines up an additional $3 billion.

Carson continues:

“What I know for certain is chief executive Mark Casady and president Dan Arnold are so focused on getting it right. They’re so passionate about it. They understand what they need to do to compete at the highest level.” See: Ron Carson chooses Orion-Salesforce software for his $5-billion RIA as he lines up an additional $3 billion.

Casady digs in

Perkins joined LPL a few months after David Wright assumed the role of chief technology officer in May. Before joining LPL, Wright served as interim chief information officer at McGraw-Hill. Previously, he was at Capital One for nearly 15 years serving in a number of roles including senior vice president of technology operations. See: How big companies stampeded to T3 with big bucks and how it affects the once maverick RIA software show.

Fetter says one reason he was drawn to Perkins was his wirehouse bona fides.

Ron Carson:  I think they're working hard. They have a lot of work to do.
Ron Carson: I think they’re
working hard. They have a lot
of work to do.

“Anthony has a great understanding of the financial services industry, the technology for the industry and what an advisor needs to be successful in serving his or her clients. Regardless of platform, he is adept at finding technology solutions that drive productivity and efficiency. That experience will parlay well into the role he is in.”

Perkins has been in the industry since he was a director at GE Capital in 1982. He is impressed with his new colleagues at LPL.

“With Victor here, this is really the place you want to be. I started to notice that advisors were going to this firm called LPL a few years ago. LPL was always under the radar. But when they started poaching from Morgan and Merrill, I started to take notice. It was apparent that LPL was making its mark and all of the big firms were saying, 'we need to figure out what kind of juice they’re on because we want some of it.’” See: LPL taps the man who saved Morgan Stanley’s bacon to take service to a Schwab RIA-level echelon.

A Wells Fargo spokesperson declined comment.

It could still take years before the LPL’s tech platform catches up with RIA-oriented tech firms, says Bruckenstein, who has viewed a beta version of ClientWorks.

“From day one, it was pretty apparent that this is a four to five year project. He’s two years into it and you’re starting to see what’s coming. They’ve made some enhancements but it’ll take another two years or so. For someone to say they’re not doing the right things is a major misconception. I think they’re doing a lot of right things but he’s got to build this new technology while 14,000 advisors still need to conduct business.”

But even with all hands working at full speed, it’s still a enormous job.

“Of all of the broker-dealers, theirs was the worse and you can’t turn around a battleship in a day,” he says. “Victor can’t do everything. These are guys in the industry and before he was bringing in people from IBM and Dell. He brought in people for the back-end and now he’s bringing in people from the front end. My feeling is LPL has progressed but it has probably not been as fast as some people who have been suffering with LPL’s technology would expect.”

Bill Winterberg: Instead of doing what Facebook might do the 'hacker way' and just introduce things and learn from it, you're seeing a measured approach
Bill Winterberg: Instead of doing what
Facebook might do the 'hacker way’
and just introduce things and learn
from it, you’re seeing a measured
approach

Getting the job done quickly but in a way that doesn’t freak out advisors is a tough balancing act, Winterberg says.

“Instead of doing what Facebook might do the 'hacker way’ and just introduce things and learn from it, you’re seeing a measured approach. And it’s appropriate for this business. They don’t want to disrupt an advisor’s business.” See: In WSJ article, Mark Casady issues a series of mea culpas and positions LPL as a turnaround story.

LPL’s new platform is actually quite comparable with custodians’ platforms, Winterberg says. “It appears to be a good response for technology that you see outside of the broker-dealer industry.” See: A peek inside the rising RIA custodians fighting to overtake the Big Four.

He points out that firms such as Addepar can build new systems but LPL has to be mindful of advisors using existing platforms.

“It’s challenging at LPL because they have to design and roll out with a conscious eye on legacy systems and existing infrastructure. Addepar has it 'easy’ because they get to start from scratch. They don’t have to risk breaking advisors’ business by creating new tools. I have to give LPL credit because they’re making improvements.”

“We’ve been on an incredible journey,” Fetter says. See: LPL Financial tosses its sales pitch to 7,000 in its HQ city of Boston.

LPL | T3 | FPPad


Mentioned in this article:

LPL Financial
Asset Custodian
Top Executive: Bill Morrissey

Technology Tools for Today
Consulting Firm
Top Executive: David J. Drucker

FPPad.com
Consulting Firm
Top Executive: Bill Winterberg



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Stephen Winks said:

August 31, 2015 — 8:56 PM UTC

Technology is the key to universally needed advisory services innovation. By definition advisory services innovation looks nothing like brokerage technology which is why technology is the Achilles Heel of Wall Street, as it adds unnecessary complexity. Hopefully Perkins has an open mind and is not too committed to conventional brokerage as a new highly disruptive advisory services technology is in great demand and will win massive market share in the best interest of the investing public. A simplifying authenticated prudent investment process is the key to unlocking market share in concert with advanced technology will trigger a Renaissance in Advisory Services..

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Stephen Winks


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