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MMI Conference: LPL’s Casady on Importance of Technology to Advisor Success

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Mark Casady, chairman and CEO of LPL Financial was the opening keynote speaker at the Money Management Institute’s annual conference in Boston on Wednesday.

After congratulating the separately managed account industry on reaching the milestone of attracting $2 trillion in assets, Casady spoke on the topics of cost, product choice and practice efficiency and noted the importance of technology in addressing each.

“Reaching the $2 trillion mark is a momentous event,” he said. “I also had a momentous event recently. No, it was not the IPO, which was routine in the way it was handled, and we just had our secondary IPO a few weeks ago. It was my daughter’s wedding, and I can certainly relate that event to the concepts of cost, choice and efficiency.”

He then quoted Donald Trump when he said, “My daughter didn’t have a budget, and she still managed to outspend that.”

He began by noting that more Americans were reaching senior-citizen status faster than ever before, they have assets and they need help. He argued that, typically, when people have three times their annual income in assets, they seek professional financial advice. Baby boomers are now reaching that point.

mark casady of LPLCasady (left) mentioned, "The Next Hundred Million: America in 2050," a book by Joel Kotkin. As the title suggests, Kotkin writes of 100 million more residents in the United Sates by 2050. He also notes it will become the youngest developed nation in the world, even surpassing China in this regard.

“This business will have a big part in their success,” Casady said.

When discussing cost, he explained that LPL Financial had taken down its costs at all levels. Cost affects the rate of success, he said.

“When I started out in 1985, we handled financial planning for super high-net-worth clients (those with $100 million or more) invoking the help of a mainframe computer,” he said. “Today, we can do the same on a tablet or laptop computer, which has brought the cost down to the point where we can give that level of service to the mass affluent.”

By choice, he meant the various business models available to advisors, whether it be managing money in-house, or outsourcing it to a third party in order to focus solely on the client relationship.

When discussing practice efficiency, he noted that many advisors would outsource or partner with individuals of other skill sets, but would retain the “quarterback” position on the client’s team. He also noted that LPL Financial was vigorous about measuring the results of the advisors they partnered with.

“We ask ourselves, ‘is the advisor and the practice more efficient with LPL Financial than at somewhere else?’ ” he said. “The answer, in terms or revenue and productivity, is unquestionably, yes.”


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