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.