LPL Financial (LPLA) President Dan Arnold made the case for how the independent broker-dealer is addressing changes in regulation, technology and client expectations on Tuesday in San Diego, speaking to some 3,500 advisors and their staff (and more than 2,500 other guests) at the firm’s annual conference.
“It’s a lot to consider,” Arnold said. The job to be done, he says, is to “increase capacity, lower costs, evolve the value proposition and evolve in the face of change.”
As the firm zooms in on key areas of focus, it continues to enhance advisors’ service experience “as our top priority,” the executive explained. “We have heard you. The better [the service experience] is, the better your experience is, and the better you can serve your clients. It’s important to get it right.”
The IBD has boosted its yearly spending on technology from roughly $40 million to about $80 million, Arnold said separately during an interview with ThinkAdvisor.
LPL’s progress in this area was described in detail on Monday by Tom Gooley, head of service, trading and operations.
“Last year at this time, we took about two minutes to answer the phone. Now, we are down to an average of 17 seconds. This was achieved by adding 25% more people to the service [group],” Gooley said.
The group he leads rolled out a tool in May to track service tasks, “so you don’t need to call us, and that was 25% of calls. “We are taking two-day services processes down to one. With 75% of three-days processing being completed within one business day,” explained Gooley.
On Tuesday, Arnold spoke of assets doubling in the past five years to $200 billion in the Advisor Solutions division, with this segment representing 65% to 70% of new assets. “We need to boost capacity and lower costs, but that doesn’t mean we will forgo choice,” the president says.
The Advisor Solutions unit is piloting a robo-offering, Guided Wealth Portfolios, that will be fully introduced in January.
The firm also wants to help its advisors by integrating capabilities, such as goals-based planning and third-party reporting. In addition, LPL is set to launch a Moving Money account tool for assets going to the Advisor Solutions unit from the brokerage business in the fourth quarter of 2016.
In terms of its Model Wealth Portfolios, the firm is eliminating its LPL Research strategist fee; it plans to reduce the program fee starting in January 2017, along with lowering account minimums and eliminating IRA maintenance charges.
“And we are developing a no-transaction-fee program for mutual-fund-only accounts …The no-transaction program will be rolled out in the final quarter of this year,” Arnold said, which produced strong applause from the audience.
As for investor clients, their expectations are being shaped “by Amazon, Apple and FedEx,” he explained, and that means they want more personalized, engaging interaction online. “You have to evolve your own service model, so that all communications reflect your brand.”
“We have leaders to drive [this effort] for the next couple of years,” the president stated. The firm’s focus is on design, data and delivery.
“We are redesigning our monthly statement,” he said, bringing on more applause. “There is definitely opportunity there.”
Online, the advisor dashboard is set to include all household assets, Arnold added, while the audience clapped in approval.
“We will make mistakes, but we will be accountable for them,” he stressed. “We will settle for nothing less than extraordinary, if we cannot be perfect.”