LPL Financial is increasing its use of technology to make its recruiting and transition processes more efficient. The firm is also now leveraging data on the 16,000 advisors that have joined the firm to generate more targeted transition packages.
The firm is in the process of developing a portal where potential recruits can learn about all of LPL’s capabilities in one place. Rich Steinmeier, managing director and divisional president, business development, who’s leading the effort, said this is a way for advisors to explore the capabilities on their own terms, freeing up recruiters to bring in more prospects.
“Historically what you’d see in the recruiting of those advisors is a very heavily human-focused interaction,” Steinmeier said in an interview with WealthManagement.com. “What we’ve got to evolve into is, we’ve got to have digital capabilities so you can learn at your own pace.”
In the past, recruiters had to do the heavy lifting, explaining capabilities to potential recruits across the entire platform. But now, recruiters can round out those conversations, coming in where the advisor has a friction point or needs a deeper dive on something.
The application will likely include videos and podcasts that go in depth on things, such as the AdvisoryWorld technology, which it recently acquired. It will also allow advisors to do virtual home-office visits, so they don’t have to spend the time and effort to fly out.
Steinmeier doesn’t expect the change to decrease the number of recruiters; rather it will allow them to be more efficient.
“What you’ll see is that the recruiters will be able to be much more targeted in their interactions,” he said. “We can get into much more depth into the topics that are more relevant to that specific recruit.”
The firm is also digitizing the transition process, with a hub that will provide transparency into every step of an advisor’s transition onto the platform. That includes the outside business activities review, marketing material review and compliance review.
Last year, the firm recruited $27.3 billion in advisor assets, $3 billion of which came from advisors “who had such a wonderful transition experience that they directly referred us to somebody that worked in their office specifically because of how easy it was to transition to our firm,” Steinmeier said. “We’re going to double down on those capabilities.”
On the firm’s earnings call last week, CEO Dan Arnold said the firm was “aligning our transition assistance with financial returns.” Steinmeier explained it as getting more precise in its underwriting process. When the firm looks to bring on an advisor, it creates a detailed underwriting assessment, including the composition of their business and how well they’ll ramp the assets.
“Historically, transition assistance packages were similar across all types of advisors,” Steinmeier said.
But the firm has data on the more than 16,000 advisors it has transitioned over the years, and that data can be leveraged to underwrite a transition package specific to that individual.
“Because we recruit more advisors than anyone else in the industry, we have a very robust set of performance history that reflects, ‘This advisor, at this tenure, from this firm, with this book composition can afford this level of investment in transition assistance,’” Steinmeier said.