What You Need to Know
- LPL had been incubating Paraplanning Services for nearly 18 months before its recent expansion to all the firm's advisors.
- The Paraplanning Services team how has 15 paraplanners and the firm is looking to add more.
- LPL is also testing a tax planning service and an offering for advisors with high-net-worth clients.
LPL Financial has launched Paraplanning Services for all LPL-affiliated advisors, RIA firms and institution-based investment programs, after its New Ventures Lab ran a pilot program making the new offering available for more than 50 advisors, the company said Tuesday.
The pilot program was “in our incubation lab for close to 18 months before we opened it up to the broader advisor population in January,” Aneri Jambusaria, LPL executive vice president of the firm’s new Planning & Advice Services business unit, told ThinkAdvisor.
Although Tuesday’s press release on the new offering represented the first time LPL announced details on Paraplanning Services publicly, Jambusaria provided some details about it to ThinkAdvisor last year.
“We’re really focused on helping advisors to expand their value proposition beyond traditional investment management,” she said Monday.
The firm had been hearing “a lot of demand” from clients for a “broader set of financial advice in areas like financial planning, tax planning and estate planning,” she noted. To meet that demand, “we’re working on building out a set of services that helps our advisors be able to expand their value proposition more effectively,” she said.
Paraplanning is “our first service within this umbrella of Planning & Advice Services, and it’s really all about helping advisors to do more financial plans,” she explained. “We know from talking to our advisors that many of them aren’t doing as much financial planning as they would like,” especially planning for more than just their top client relationships, she noted.
But offering financial planning for all of an advisor’s clients “can be kind of challenging to execute, especially if you’re a solo practitioner or you’re in a small practice because it can take up to 10 hours to complete a financial plan,” she explained.
Paraplanning Services provides advisors with experienced support through the use of paraplanners to deliver financial planning services to clients, helping advisors to grow their capacity to deliver personalized advice, the firm said.
The Paraplanning Services team is now made up of 15 paraplanners and operates as an extension of the advisor’s practice, working together with advisors to learn about their clients’ needs, according to Jambusaria. LPL is looking to grow the team, she said, but declined to say how many additional people the firm may be targeting.
Paraplanners gather and input data into financial planning software, such as eMoney, MoneyGuidePro, RightCapital and WealthVision, to generate insights and offer advisors a complete financial plan for their clients, LPL said.
The plan generated becomes the guide for advisors and their clients, with plan maintenance available on an annual basis.