From the January 2004 issue of Investment Advisor • Subscribe!

January 1, 2004

Getting Something From Less Than Nothing

With the help of FinancialCircuit, a company based in Campbell, California, that makes liability management software, broker/dealer LPL Financial has added an additional source of revenue to its advisors' bottom lines--and its own. MoneyFind, a liability management service, has been going through a pilot program at LPL since August; on November 3, the official rollout was announced. What was initially expected to encompass about 200 people in the initial rollout, according to LPL's managing director of national sales, Jim Putnam, ended up with 500 reps signed up, with 118 loan applications in the four weeks before we spoke.

Liability management allows advisors to restructure a client's debts and liabilities to increase cash flow and tax savings. It also allows an additional portion of a client's portfolio to generate income, one that hasn't been explored before as a revenue source, and provides a more accurate and thorough picture of a client's financial standing. Clients whose liabilities are reduced are also more likely to allow advisors access to more of their portfolios, thus increasing the base of assets under management.

LPL isn't the only B/D to use MoneyFind. According to Adrian Nazari, CEO and chairman of FinancialCircuit, two other B/Ds are already using the program, with two more having signed letters of intent to do so. According to Nazari, the use of MoneyFind could conceivably boost an advisor's income an additional 20% per year. "With this concept," Nazari says, "if you have 150 clients with an average of $300,000 in liabilities, it will add up pretty quickly." It offers advisors entr?e into such client activities as buying property, refinancing, finding investment properties, and consolidating lines of credit.

Reprints Discuss this story
This is where the comments go.