LPL Has 'Reduced Pricing' to Help Advisors: CEO

The firm will introduce a new version of the app in 2020 that will include data on assets held at other financial companies and more self-service functions. “In the short run, this overall effort will enhance investor experience with deeper connections and more frequent interactions,” Arnold said.

Looking further out, LPL intends to build “a competitively differentiated experience … modeled after digital innovators from outside our industry and positions our advisors to increase client loyalty, attract new clients and increase share of wallet.”

Account Opening ‘in Minutes’

LPL also aims to make its advisor platform, ClientWorks, capable of more “personalization and flexibility,” so advisors can have a better service experience and boost the efficiency of their practices.

In Q3, the firm introduced an applications library of applications “much like consumers use the iPhone app store,” Arnold said. One app lets advisors view practice data and analytics in real time, for instance.

With testing of artificial intelligence and robotics, the firm finds it can activate accounts “in minutes” rather than 24 hours, according to the executive. “These initial experiments are triggering further exploration across the enterprise in an effort to more broadly apply the power of artificial intelligence and machine learning to enhance the client experience and the scalability of our model.”

Outsourcing: ‘A Really Good Trade’ for Advisors

Arnold says the firm is adding capability such as “outsourced business services, digitized workflows, advisor focus, capital solutions and lead generation.”

Over the past year, the firm has done pilot programs involving outsourced administration and marketing, chief financial officers and technology services with the goal to deliver them “with high quality at an affordable price and make them easy to use,” he states.

The Business Solutions, according to the executive, have been embraced by advisors like Jim Miller of Charlottesville, Virginia, who works with about $100 million of assets.

Using the outsourced CFO, Miller created “a new pricing strategy, built a segmented client-service model and identified better ways to manage his expenses,” Arnold said. “Now, Jim describes his CFO as one of the best resources he’s ever had and thinks of her as a member of his management team.”

The outsourcing services have about 600 subscribers and cost about $1,500-$2,000 a month. This means advisors can have a CFO for, say, about $20,000-$24,000 a year, he explained: “And [they] can get that expertise and only pay for the portion of the portion of the CFO that [they] need” vs. over $100,000 a year for a full-time employee. 

This “ends up being a really good trade for them,” Arnold said. The offering “creates some incremental earnings contribution for us, from that incremental value, but the biggest gain comes from helping advisors grow their business.”