As it does each quarter, LPL Financial is providing the names of financial advisors who’ve recently affiliated with the independent broker-dealer. The list includes several large groups of registered reps and the names of individual advisors who have joined from a wide variety of firms.
Despite the long list of new FAs, though, the IBD said net new assets coming over from new clients and advisors grew just 2% in the fourth quarter of 2016 from the prior quarter and only 1% from the earlier year. This includes both advisory (fee-based) and brokerage (commission-based); broken out, net new advisory assets expanded 9% from Q3’16 and 8% from Q4’15.
“They were terming this ‘robust growth,’ but 10% net or higher is robust,” said recruiter Jon Henschen in an interview with ThinkAdvisor. “They are excited about 2%, but it’s nothing to crow about.”
LPL’s affiliated rep force grew a net 323 last year to 14,377 as of Dec. 31.
“The fourth quarter of 2016 was a very successful quarter for recruiting at LPL and helped secure 2016 as LPL’s best recruiting year in the history of the firm,” Bill Morrissey, head of business development for LPL, said in a statement.
In addition, the IBD has had some notable departures of late, including popular advisor Ron Carson.
“It is true that if a firm grows too fast, it can hurt the back-office capabilities and service to existing advisors,” Henschen said.
Plus, it’s cheaper to retain than to recruit. “Attracting people can entail higher payouts, transition money and thinner margins for a BD,” the recruiter said.
In LPL’s fourth-quarter earnings, though, its total payout ratio was 86.36% vs. 86.98% a year earlier.