LPL Financial has acquired tech firm AdvisoryWorld to improve the firm’s proposal generation, client onboarding, and investment analytics capabilities. AdvisoryWorld has been a member of LPL's “Vendor Affinity Program,” meaning LPL advisors could use its services at a discount, since 2015. With the acquisition, LPL’s advisors not already using the AdvisoryWorld offering will have access to the newly acquired tools beginning in January, according to Burt White, managing director and chief investment officer at the firm. The acquisition was completed for $28 million in cash.
The integrations that AdvisoryWorld has completed with other third-party technology firms are of significant value for LPL, said White. “The magic for advisors is not just having capabilities like proposal generation or having capabilities like financial planning or CRM, but how those things all come together in a seamless integrated experience. That’s the expertise that AdvisoryWorld brings,” he said. He characterized AdvisoryWorld as “the centerpiece” of LPL’s advisor workstation, ClientWorks.
The acquisition is a “great idea,” said Craig Iskowitz, founder and CEO of technology consulting firm Ezra Group. “AdvisoryWorld’s tools are very good. Their proposal system is very good,” he said. “They’ve got some very strong tools that are very well-integrated with a lot of different systems. It’s interesting that LPL is buying them.”
“It’s going to make ClientWorks a much stronger platform. It bodes well for advisors who are on ClientWorks now—things are going to be improving quicker in terms of the advisor and client experience,” he added.
The acquisition stands apart from the $120 million in technology investments LPL said it’s made over the past year and plans to set as a baseline for next year. “This is a huge upgrade,” said White. The tools that will be immediately replaced are LPL’s Investor Presentation and Proposal Tool, a tool that will still be available but that White “wouldn’t want to use” following this deal and its Portfolio Review Tool. The tools previously did not communicate with each other, said White.
For advisors like Jamie Cox III, managing partner at Richmond, Va.-based Harris Financial Group and who is associated with LPL Financial, the true value of the acquisition is the robust API library of AdvisoryWorld—and by extension integrations of other companies integrated with it. “The missing piece in fintech is ‘middleware,’” he said. AdvisoryWorld’s integrations with major CRM systems like Salesforce and Redtail will make his business stronger, he said.
Cox used outside tools like MoneyGuidePro and eMoney for proposal generation and PRT for portfolio monitoring and analytics, but he’s pleased the new system will soon be available. “There was no way LPL could innovate quickly enough to match what AdvisoryWorld had off the shelf,” he added. “It’s fresher.”
It’d be good for LPL if the tech culture of AdvisoryWorld takes hold at LPL, said Cox. He saw a corner being turned with Riskalyze’s integration with ClientWorks this summer.
There could be cultural conflicts, said Joel Bruckenstein, a technology consultant and organizer of the T3 conferences, but LPL is significantly larger and should be able to easily swallow the smaller company. AdvisoryWorld has a few dozen employees according to LinkedIn results, while LPL counted 4,101 employees and 16,174 advisors as of the end of September.
LPL’s technology has been a punching bag for critics. “‘Fixing’ BranchNet and changing the name to “ClientWorks” is a parlor trick,” wrote former LPL representative James “Jeb” Bashaw earlier this year. BranchNet was to be retired and replaced with ClientWorks, according to a company announcement made in March.
Carson Group said emerging firms have the advantage of avoiding the legacy systems that need improvements to stay competitive. “Firms that we see in a growth position are not only more innovative but also provide more effective solutions the market is demanding—and do so in a way that is faster to market,” said Teri Shepherd, COO at Carson Group. The firm’s founder, Ron Carson, was an LPL superstar before he famously broke with the firm and moved to Cetera Financial Group in 2017. One of the criticisms he leveled at LPL was its clunky tech.
