From the January 2009 issue of Research Magazine • Subscribe!

January 1, 2009

Five Questions for the Top Recruiter

What's the current environment?

We are having a record recruiting year and should be up 15 or 20 percent year over year for 2008 vs. 2007, which was a record year.

Over the years, we have successfully recruited in all channels - insurance, banking and financial institutions.

The major investment banks have represented about 30-33 percent, or one third, of recruits. Another third or so come from other independent firms. About 20 percent come from insurance companies and affiliates, and the remaining 10 or 15 percent are from other banks, such as regional institutions.

What factors are affecting today's recruiting market?

Recruiting is always a push-pull process.

The pull for us is our national footprint, technology platform and advisor support - which are universal across our channels.

The push depends on how Wall Street is doing and what other firms' clients are thinking; they may trust the advisor but not the broker-dealer. And some Wall Street advisors are having issues with succession planning.

How is this playing out for your firm?

For us, the ratio (or breakdown of advisors by firm type) has been consistent - but the volume of recruits has gone way up. Our leads through November 2008 were up 119 percent vs. 2007. It's exploded.

We are talking with advisors who want to align with LPL Financial as a partner in the growth of their business.

Our goal is to be the best, not the largest, broker-dealer.

We identify those advisors wanting to go independent for the right reasons and then support them.

We have a large (recruiting) force involved in this consultative process in order to get advisors aligned with LPL Financial -- 40 in the field.

What trends are you seeing?

We are recruiting more larger advisors in terms of production and assets under management. The average production has been up 20 percent, and in this environment, that is compelling.

And those in the pipeline are even more compelling. These prospective advisors, whom we have invited to visit with us, are up 48 percent year over year at their existing firms.

Thus, we are working with larger advisors with more sophisticated practices.

How are you hoping to take advantage of this?

The volatility in this space is making advisors look at independence for the first time. We are hearing that they are looking for a partner to move to and grow their practice.

Our scale makes the firm able to invest in our people, our infrastructure and more. And that is true at the practice level, too.

By aligning advisors with branch managers, they can leave their existing firms and then take on more clients thanks to our scale -- administrative and technological. Through our in-branch recruiting programs, advisors who are not sure if they want to acquire their own space, labor, etc., can be matched with an existing LPL Financial branch that fits their needs

We have a strong national footprint, with 3,500 branches with an OSJ (office of supervisory jurisdiction) and about 6,000 branch locations overall.

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