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August 21, 2019 at 03:53 PM
At independent broker-dealer LPL Financial’s Focus conference in San Diego on Tuesday, company executives took the opportunity to stress the importance of advisors focusing on what they do best and the parts of their businesses that they love most.
What’s “A-number-one” when LPL meets with its advisors is to get them to “understand the business that they have” and answer one important question: “Does it actually align with the business that they want?” Matt Enyedi, a company executive vice president, told attendees during an LPL Live conference session that was webcast Tuesday.
That’s a “really tough discussion because you’re going to find more often than not what they might love about this business isn’t actually the business they created,” he said.
LPL is trying to give its advisors the “tools and the understanding to get to a place where the business that they go with going forward aligns with what they truly love,” he explained. Data indicates that the “most unhappy financial advisors are those with about $225 million in assets” despite the fact that seems to be an “incredibly successful business,” he pointed out. That’s often because “the business grew at a pace and at a rate and maybe at a shape that wasn’t what they actually loved,” he explained.
Many advisors entered the business because “they love helping American investors achieve their goals and dreams, and that’s why they do what they do,” he noted. But when a business grows a significant amount, “they’ve got to bring on more staff, they’ve got to bring in more technology, [and] they’ve got to bring in more infrastructure … [and] there’s no one to manage” the business “but them,” he noted.
And so what often happens is “all of a sudden they wake up one day and they say, ‘I don’t meet with investors any longer. I manage a business. I never wanted to do this.’ And they’re miserable,” he said.
Therefore, LPL is trying to help its advisors “understand what it is they’re focused on — what it is that they love,” and if they’re doing something they don’t love doing and is “commoditized,” it’s best to “outsource” those parts of the business to LPL or other companies, he said.
And “this conversation is not just for people in the early stages of trying to build a business,” Angela Xavier, executive vice president of IAS Business Consulting, pointed out. “This is just as relevant for people of highly successful businesses but are trying to get to the next level,” she said.
