From the June 2009 issue of Research Magazine • Subscribe!

June 1, 2009

Advisor Advocate: LPL Financial's Bruton

The ex-professional basketball player has experience leading a team to victory

With advisor interest in the independent model at a historic high, Derek Bruton's appointment as national sales manager for the nation's largest independent broker-dealer network could not have come at a more auspicious time.

As Bruton, 42, frames it: "It reminds me of a quote from Wayne Gretsky: 'A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.' I really think the LPL Financial model represents where the puck is going to be."

Bruton joined LPL in 2007 to manage the firm's newly acquired broker-dealer affiliates -- Mutual Service Corp., Waterstone Financial Group and Associated Securities. When he was named national sales manager in late March, his responsibility soared more than six-fold. The three affiliates, which he continues to oversee as chief executive officer, have 1,800 brokers. LPL Financial Independent Advisor Services has 11,000.

"I'm absolutely thrilled -- partly because of the responsibility and partly because of the company and the huge opportunity," said Bruton, who served as managing director and national sales manager at TD Ameritrade Institutional prior to joining LPL.

"We've got a longstanding reputation of being laser-focused on just one mission: helping advisors grow their business and serving the American investor. We've avoided business conflicts that have endangered a lot of other business models, as you're seeing in the industry today," he adds. "We truly believe the independent advisory model is the model of choice."

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BRUTON'S TAKE ON THE CURRENT CLIMATE: "More so than I've seen in my career, advisors are more willing and anxious to get help from their broker-dealer. They recognize opportunity is knocking at the door and we at LPL really need to answer it."

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As the key management player responsible for the advisory group's business development, Bruton says he will focus on driving advisors' satisfaction, supporting the growth of their business and serving as an advocate for their needs.

In the last year, despite market challenges, the three affiliates under Bruton saw new account volume rise "at a tremendous rate" -- a trajectory he expects to see continue firm-wide as unhappy investors seek out new advisor relationships.

Bruton reports to Bill Dwyer, LPL Financial Independent Advisor Services president, who calls Bruton's early success in integrating the affiliates into LPL a "milestone." Clearly, it was also Bruton's proving ground.

"There was no question that Derek possessed the skill sets and ability to expand into this role when he joined us. Having said that, it was important that Derek be given the time to learn and understand the culture of LPL Financial and build strong relationships with business leaders at the firm," Dwyer said.

Ultimately, Dwyer said two things made it clear to him that Bruton was well-suited for an expanded role: his ability to understand advisor needs and advocate effectively.

Bruton's career path has included stops at Merrill Lynch, where he managed the institutional custody and trading businesses for registered investment advisors, and at Charles Schwab Institutional, where he managed top-performing sales teams in Northern California and New York.

He got his start in, of all places, Japan, where he worked as an equity analyst specializing in Latin American equities for Mitsui Insurance. The six-foot-nine-inch Bruton played professional basketball for three years in Japan, and it was Mitsui that sponsored the team.

Bruton says that teamwork is one of the most important ingredients of success in life -- and it's a lesson he learned early on. The all-time leading scorer and rebounder at Gilroy High School in California went to Stanford University on full scholarship. While there, he was a four-year letterman, serving as captain during his senior year and leading the team to the NCAA tournament in 1989.

As he develops his new role, Bruton points to three LPL programs he believes will help push advisors to new heights. First, the firm offers a complimentary branch profitability analysis that's not just a "deep dive" on business methods but looks at how the office is staffed, how principals manage their time, how agreements are negotiated. Bruton calls it a best-practices blueprint to help businesses become more efficient and scalable.

Next, there's ClientsFirst, a program launched in January to enhance marketing and communications. So far, 2,500 advisors have taken advantage of it. Last, a branch development initiative introduced on a limited basis late last year to bring on new recruits now includes 150 branches. To date, 10 percent of the branches have placed an advisor as a result of the program.

"With the meltdown at the wirehouses and a lot of advisors looking to switch broker-dealers, there's tremendous opportunity out there for branch offices. A lot of people want to join existing practices. This is something I think we're going to have a lot of success with," Bruton added.

With 17 years in the industry, Bruton has a long view.

"I've never seen the recognition of the independent space as I do at this moment. When I worked at Merrill, they didn't know what an RIA and a hybrid meant. I would say though that despite the fact that there's more interest than ever to get into the space, advisors need more help getting there," he adds. "A lot of folks know they should be here, but they don't know how to set up a practice. That's the challenge."
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Freelance writer Ellen Uzelac is based in Chestertown, Md.; the former West Coast bureau chief and national correspondent for "The Baltimore Sun," can be reached at ellenuzelac@msn.com.
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PHOTO BY Jonah Light.

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