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LPL taps the man who saved Morgan Stanley's bacon to take service to a Schwab RIA-level echelon

Tom Gooley sacrificed 36 weekends and a happy home life in Larchmont to smooth the way for 15,000 stockbrokers in the biggest wirehouse merger ever

Author Lisa Shidler June 29, 2015 at 6:33 PM
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Tom Gooley: You need to continue to evolve system and service platforms to make sure you're keeping up.

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Hybrid RIA

Stephen Winks

Stephen Winks

June 30, 2015 — 2:50 PM

LPL is the first firm to understand that professional standing in advisory services requires more than conventional brokerage and custodial services. Private trust banks that support fiduciary duty are the appropriate reference point, not b/ds or custodians. Fundamentally the management of redundant account administration cost at the product, trustee and client levels that incrementally add no value is the reason why 40% of retirement savings is lost to fees, commissions and administrative cost. Brokerage and custody formats are the beneficiaries of these fees, commissions and administrative cost which are not in the best interest of the investing public. If LPL can replicate the private trust bank format which gives advisors (RIAs) control over their value proposition, cost structure, margins and professional standing, LPL will own the financial services industry. This market share gain is achieved through disruption of the existing business model and will empower LPL advisors to compete very favorably on the basis of the value they add, their professional standing and the cost of their services. Private trust banks are very profitable and serve the best interest of the investing public.

This sort of innovation is not possible in a brokerage or custody format as professional standing is not acknowledged and there is liability associated being prescriptive in advisory services support. This is not a problem when a firm actually support fiduciary duty in the consumer’s best interest..

Let’s hope, for the sake of professional standing,that private trust banks are the model rather than b/ds and custodians.

Stephen Winks

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