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November 27, 2018 at 10:46 AM
Last year, we were privy to the story of a mid-sized broker-dealer that had been experiencing stagnant growth for years and thus was ready to make the changes required to become a recruiting magnet and reignite growth.
Working with a consultant to guide them on this new path, they hired two recruiters and, on the surface, agreed to offer forgivable transition notes to onboarding advisors and cover airfare and hotel for due-diligence visits to the office.
But broker-dealer management failed to prepare staff for the consequences of adding a significant number of advisors and how this growth would impact staffing needs and workloads.
There was little communication from management during these changes. When the top brass did communicate, it was reluctantly, as executives seemed to prefer the solitude of their ivory tower.
Over the course of three months, it became clear that management was in fact not willing to expand out of the comfort zone it had grown accustomed to for many years. Recruiters were laid off, transition money and everything else planned was scrapped, and the BD returned to the safety of the familiar.
Steering an Aircraft Carrier
Implementing change can be a difficult endeavor at best, and it needs to be initiated from the top down. For large broker-dealers, real change can be like steering an aircraft carrier, which is why we’ve been surprised at the speed and significance of changes we are witnessing at LPL Financial.
LPL appears to have had a “come to Jesus” moment of self-reflection, as it grapples with some long-standing issues voiced by advisors.
In April 2018, Dan Arnold announced that great changes were coming, admitting that LPL had difficulty recruiting NPH advisors and that there was a certain amount of dissatisfaction among its own advisors. To its credit, much of the change at LPL has been advisor driven.
