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Technology > Investment Platforms > Turnkey Asset Management

LPL’s Bill Dwyer Makes the Case for BD Scale

By James J. Green

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In an interview on Thursday in New York, Bill Dwyer of LPL argued that the coming boom in demand for advice from boomers can best be met by advisors aligning with a firm like his, whose scale will allow its affiliated reps and RIAs to meet “the biggest bull market in advice ever.”

Dwyer, president of national sales and marketing for LPL Financial, recalled that before the financial crisis of 2008-2009 there was much concern in the industry over the aging of the independent advisor force. However, during the crisis the experience, stability and maturity of advisors allowed them to authoritatively guide their jittery clients during those tough times. “The real heroes” during the crisis, he said, were those advisors.

In the years ahead, however, a slower-growth economy and market, and the increased demand and complexity of retiree and near-retiree clients, will put more margin pressure on those advisors, who will need to “handle two or three times the number of clients they now have,” Dwyer (left) said.

They will also have to manage client assets more efficiently. To accomplish those tasks, those advisors will need to outsource much of what they do to be successful. That is where LPL stands ready to help, he says, citing the growth success of its advisors who take advantage of LPL’s business consulting group and turnkey asset management programs.

“Autonomy won’t be rewarded as much in the next two decades as it was in the last two,” said Dwyer, who has spent 19 years at LPL. “The cost of rugged independent is going up,” leading advisors to explore how effectively they leverage the resources available to them from their broker-dealer of custodian.

Asked if there has been any cultural change at LPL since it went public last November, Dwyer pointed out that LPL has been reporting its financial results since “Todd [Robinson] left the company and gave equity to 900 advisors,” triggering the necessity of “being SOX-compliant [Sarbanes-Oxley] since 2007.” Saying going public has been a

“non-event for our advisors,” Dwyer pointed out that there were benefits noticed by both existing LPL advisors and recruits: “You get credibility; it’s been nothing but positive.”

Comparing the scale of LPL to other BDs, Dwyer expressed concern about some smaller BDs that reportedly decided they “can’t afford E&O” insurance and have decided to self-insure instead. But what about the benefits of being privately owned rather than being public, since as some BDs and RIA custodians argue, a private company can invest in technology or services that don’t immediately produce profits? “It’s still capitalism,” Dwyer said, and “whether you’re public or private, you still need to be profitable.”

As for the benefits of being larger rather than smaller, Dwyer said that “if you stick to your core vision, bigger is better every step of the way,” and that for the end client, “scale has been an enormous advantage.”

As for LPL’s positions on Dodd-Frank and that bill’s attendant rule-makings, Dwyer said “we advocate for our advisors and clients,” seeking “clarity for consumers, which benefits our advisors, and in turn benefits LPL.” Putting on his Financial Services Institute hat (he’s the current chairman of FSI, the seven-year-old advocacy group for independent BDs), Dwyer pointed out that several big broker-dealers contributed additional funds last year—above and beyond their dues—to beef up FSI’s office in Washington.

“We hired four key staff members last year,” Dwyer said, including Keith Kelly as COO, a marketing person, and an assistant to David Bellaire, FSI’s general counsel & director of government affairs, while Dale Brown, the president and CEO of FSI, moved to Washington last year as well.

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