LPL Financial is offering its hybrid advisors up to $100,000 to shift their assets held elsewhere to LPL’s advisory platforms, according to an internal communication sent to advisors Wednesday.
The firm is rolling out a new Off Platform Asset Conversion Program, which aims to assist advisors operating as hybrids—those operating both a commission and fee-based business—in transitioning their assets held at other custodians and third party investment advisors, such as AssetMark and Envestnet, to the firm’s advisory platforms.
Under the program, LPL is planning to pay hybrid RIAs 10 basis points on assets under management, up to $100,000, for successfully transferring the assets, according to an internal email sent to advisors obtained by WealthManagement.com. Advisors would transfer assets every three months over the course of a year.
"Platform assets are the arms race of our time," said one LPL advisor, who declined to be named. But he noted that the initiative provided little more than offsetting costs involved in the transition, such as transfer costs, mailing and support staff needed to move the assets.
“The money is helpful, but it's incidental to transferring assets generally,” he said. “In other words, the program would not change my decision to transfer or not transfer.” He doesn’t expect there to be much interest in the transition program.
"LPL is focused on working closely with our advisors to support their business in a way that allows them to deliver the best advice and platform they can in order to meet their fiduciary duties with their clients. We feel LPL has the best custody platform in the industry, and we are proud that our advisors custody the majority of their client assets with LPL," the firm said in a statement Thursday. "Many RIA firms are in the process of consolidating their business to better serve their clients, and we help them make that transition when its best for them."
LPL has more than 320 independent RIA practices and over 2,700 advisors, according to the company's 2015 form 10-K. Currently there's about $50.7 billion in RIA assets custodied at LPL.
The program is approved only through the end of this year, according to the internal email.
