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LPL Rolls Out Succession Planning Program

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As the advice industry struggles to get more advisors to embrace succession planning, LPL Financial says it has launched Assurance Plan, a program that helps “protect the value of an advisor’s business in the event of an unplanned exit” due to death or permanent disability.  

The plan also aims to prevent an advisor’s clients and family members “from being vulnerable to financial disruption,” according to the independent broker-dealer. Roughly 70% of indie advisors in the U.S. lack a succession plan. 

Assurance Plan offers advisors a minimum purchase price for a practice, based on a multiple of the advisor’s recurring revenue (or fees and commissions). Also, LPL handles the sale of the advisor’s business to another affiliated advisor with no commission, “providing any additional proceeds above the guaranteed amount to the advisor or their family,” the IBD says.

“Advisors invest so much into serving their clients and building a business they can be proud of. But when it comes to protecting the value of their own greatest investment, there has been a lack of options,” Jeremy Holly, head of Advisor Financial Solutions, explained in a statement.

“With this new solution, advisors have a safety net in place, which gives them a layer of assurance as they explore the ideal plan they want in place to transition the care of their clients and monetize their practice when they are ready,” Holly added. 

LPL Financial’s tally of affiliated advisors was 16,763 as of March 31, up 574 from a year ago and 299 from the prior quarter.

“It’s always been challenging for financial advisors to devote time and attention to succession planning,” according to Tim Wyman, CFP, managing partner at the Center for Financial Planning.

“But succession planning is critical, especially today … ,” Wyman explained in a recent blog. Sometimes “the unexpected happens, and it can be disastrous without a succession plan in place. Market risk is a given in our business, but we should all be thinking about personal health and planning for any eventuality.”

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