The Gershman Group Partners with LPL's New PWM Platform

News provided by

Mar 22, 2024, 15:16 ET

LOS ANGELES, March 22, 2024 /PRNewswire/ -- Roger Gershman of The Gershman Group who is known to represent the who's-who of elite advisors for both banks and independents believes LPL's launch of its PWM platform will change the competitive playing field for the next generation of top advisors. We embrace this launch and we expect many advisors we represent will feel the same.

As financial advisors increasingly seek alternatives to traditional big bank/brokerage firms, we believe LPL's groundbreaking W2 PWM platform will change the future. This innovative platform, blending independence with employee benefits, represents a game-changer in the industry, positioning LPL as a formidable competitor against the likes of UBS, Morgan Stanley, and Merrill Lynch.

Gershman says, "In my 35-year career, I've never witnessed a firm of this caliber enter the traditional W2 space with such vigor. LPL's entry into this market signifies a monumental shift in wealth management dynamics." It's an honor to partner with them.

As we see it, LPL enters this market with breath and power as the #1 independent broker/dealer in the nation, who has dominated the independence space for the 'breakaway' bank/brokerage advisor with over 23,000+ advisors and growing. Based upon our analysis, even as the third largest custodian in the nation, standing side by side with behemoths like Schwab and Fidelity, they are still today one of fastest growing firms on Wall Street. With a war-chest of capital, LPL has now launched this platform leveraging all the benefits of their successful independent model of freedom and control with all the w2 benefits of a massive wealth management infrastructure.

As big banks continue to lose to the independent market, some have considered entering the market but have largely struggled either because they do not understand the business, or they do not want to cannibalize their existing w2 salesforce. Gershman adds, "It's a lot easier to take a big independent platform and convert a division to w2 than the other way around."

The Gershman Group reports that LPL's tech budget for this year alone is an estimated whopping $460M vs. the next nearest competitor may reach barely $75M. Whereas the wealth management platform is massive, competing with all the majors, their leading-edge independent platform tools well exceed that of any major multi-national bank. As an example, they allow their advisors the choice of state-of-the-art reporting engines from Black Diamond, Orion and Addepar. They have over 20 financial planning software solutions. They even allow their W2 advisors their choice of 4 different CRM's to choose which other banks would never allow. They can even open a new account in 74 seconds or less and with ACAT transfers that require no statement, no drivers-license nor AHC voided check. The tools for creative and innovative marketing tools for private label marketing of an advisory team are above and beyond anything traditional advisors are accustomed to. Alternatively, advisors at big banks must label themselves as employees of the bank while the technology is held captive to outdated, clunky legacy systems advisors are required to use.

This makes LPL an easy firm to partner with. To add, we believe LPL also doesn't have all the overbearing oversight and compliance baggage of a traditional bank. Over the years, big banks have merged and been acquired to what are now just a few mega-banks that include investment banks, commercial banks, institutional banking, international banking among the many various divisions, including their weakened wealth management divisions. This effect has not only brought on heavier legal and compliance, massive cost controls but has also diluted financial advisors' powers within. The advisors within these mega-banks have been overwhelmed by layers of bureaucracy, legal and compliance, and are very frustrated that the focus is less about their wealth management business and more about the shareholders of the banks making them a small fraction of the overall pie.

In our opinion, LPL is simply a pure wealth management firm with no other ancillary business lines such as commercial banking, investment banking, and proprietary trading. Therefore, their level of compliance and legal bogging down of advisors is a fraction of the competition, while the platform has the size and breadth of most every major bank/brokerage firm. As a statement of commitment to their advisors, LPL doesn't believe they own your clients, whereas other firms believe that they do. In fact, if you leave the LPL, they cannot attach your book. Likely, that is the reason for their 98% retention rate.

With this war chest of capital, they are putting their money where their mouth is and making the economic transition packages for the best advisors super competitive vs. the big bank competition. We've built this study below that highlights key differences;

LPL Packages	vs	Big Bank Packages
Deals 300%-400%		Same
7 Year Notes		9-13 Year Notes
60-70% W2 payout		40-50% W2 payout
Deferred 0%		Upwards of 15%
Private Office		Big Office
Self Branding		Bank Branding
Full Support Staff		Limited Support

In conclusion, The Gershman Group endorses LPL's PWM platform which represents a paradigm shift in wealth management. By offering the best of both worlds – independence coupled with the support and resources of a leading financial institution – LPL is poised to attract top talent for many of the advisors we represent and redefine industry standards for the future of the modern advisor.

SOURCE The Gershman Group