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Tensions build with OSJs after LPL Financial's 'about face' on held-away RIA assets and forced use of its corporate RIA

Can the Fort Mill, S.C. broker-dealer add 3,200 NPH advisors, make RIAs bend to its will and not break bad with giant partners?

Author By Lisa Shidler September 6, 2017 at 12:09 AM
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Andy Kalbaugh: This is not a new fee, rather a simpler way for both of us to administer the existing oversight fee.

Sean Kernan

Sean Kernan

September 6, 2017 — 1:59 AM
A litte nuance--not every OSJ necessarily has an RIA, (but the largest almost all do). OSJs can recruit to the corporate RIA--and will have to--but obviously much different margins. The cost of doing business with the corporate platform is more like the 10-15 bps on assets you refernce AND 10% of gross advisory fees.
brooke southall

brooke southall

September 6, 2017 — 3:26 AM
The nuance and kind style of its delivery is highly appreciated. Brooke
Joe Gordon

Joe Gordon

September 6, 2017 — 10:29 AM
Wonder what percentage these OSJ's revenue is from FINRA product sales? The puck has moved to be a fiduciary and put your clients first; non-FINRA annuity and life insurance are outside the domain of FINRA except when firms like LPL says it is their business. Guess only legacy VA trails, and maybe C-share 12b-1 fees are at risk? When our revenue on FINRA declined to less than 1%, we gave up our licenses and the nuisance of B/D oversight.


September 6, 2017 — 2:47 PM
As package product (REITs, VAs) commissions drop and shelf space marketing allowances come under more scrutiny the Indie B/D model becomes more challenged! One is left to wonder how the Indie B/D survives without a fee cow, aka Investment Banking arm to prop up the necessary revenues to sustain profitability? This in concert with the long overdue DOL machinations (save for the nuttiness of Perez) we are witnessing a great cleansing in the B/D space. Having dropped my 7,24 was a great moment in my career knowing I no longer am being shot at from so many different regulatory directions with gray regulatory traps awaiting with each investment decision made or not made...but I must say it is fascinating to watch form the outside!
Stephen Winks

Stephen Winks

September 8, 2017 — 4:29 PM
There is real liability associated with brokers acting in a fiduciary capacity, especially on the part of the b/d who is responsible for the "advice" rendered by their brokers. This accountability and ongoing responsibility requires the clear delineation of "advice". The more granular the definition of advice the better. Thus the role of the RIA becomes mission critical to the success of the advisor. The corporate RIA can greatly ease the burden of the advisor and will protect the b/d as well. Push back on LPL's Corporate RIA may thwart innovation essential to the advisors success and makes the individual advisor a cottage business without scale. The question is whether fiduciary services should be offered for free as a condition of being in the advice business or whether one wants to be in the advice business. Either way the b/d has important responsibilities and an important role to play. Ultimately the entire industry will be reordered around advice, but no one wants to talk about it. SCW.

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July 28, 2023 at 3:11 AM

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LPL Financial
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Top Executive: Dan Arnold

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