LPL Financial CEO Dan Arnold speaks at the firm’s national conference in 2016.

LPL Financial said Wednesday that it is adding an employee model and boosting what it will spend on technology this year to $150 million to accommodate this and other developments.

The aim of the effort is “to create a new unique employee model for independent-minded advisors who do not want to manage every aspect of a business,” according to an investor presentation made by CEO & President Dan Arnold.

The independent broker-dealer sees this strategy and its related IT moves as a good way to “attract advisors who have more than a 75% mix of advisory business.”

According to LPL, traditional employee advisors work with about $11 trillion in client assets, while advisory-oriented independent models encompass $5 trillion and traditional independent models $3 trillion.

LPL’s new 2019 tech budget is up from the estimated $135 million figure it shared several months ago. It represents a 25% increase over last year’s tech budget of $120 million — ahead of the 20% compound annual growth rate the firm says it has been on since 2015, when it had a $60 million tech budget.

“To keep up with the demands of the industry and investors, advisors increasingly need to leverage technology to increase efficiency, create scale and offer a digital service experience to meet investors’ demands,” according to Burt White, managing director and chief investment officer.

“We are uniquely positioned to be able to deploy capital and invest in our advisors’ business,” White explained in a statement. “And we believe that focusing that investment on technology capabilities and resources can bring a tremendous amount of value to advisors and their clients.”

Some areas for increased tech spending include adding capabilities to its advisory platform so advisors can serve clients in more segments of the wealth management market; boosting the service experience of ClientWorks; and adding capabilities and organization to make ClientWorks Connected an “end-to-end solution.”

Florida Deal

On Tuesday, LPL said it had struck a deal to buy Allen & Co. of Florida, a broker-dealer and RIA based in Lakeland with some 30 employee advisors and $3 billion of client assets.

“We are excited that Allen & Company has chosen to join the LPL family,” said LPL President & CEO Dan Arnold, in a statement. “We are focused on M&A opportunities that align with us strategically, operationally and financially, and Allen & Company is a great fit on all fronts.”

The transaction — which LPL says is being done at a price of about seven times Allen & Co.’s expected earnings after it becomes a part of the larger entity — should close by year-end.

— Check out LPL Profits Soar on Strong Recruiting: Q1 Earnings on ThinkAdvisor.