LPL Financial is the largest independent broker-dealer in the U.S. based on gross revenue. Dually registered as an investment advisor, the firm supports a network of over 16,000 affiliated advisors who operate their own businesses throughout the country. LPL Financial has several different investment strategies with differing minimums to invest. Its client base is primarily composed of individuals, though it also works with a number of institutional investors.
The bottom line: LPL Financial is a massive independent broker-dealer and registered investment advisor, with affiliated advisors all across the country.
|Assets under management (AUM): $268,833,916,025|
|Minimum investment: Varies for customized advisory services; none for financial planning|
|Individual investor to advisor ratio: 47:1|
|Fee structure: A percentage of AUM, hourly charges, fixed fees, commissions|
|Headquarters: 1055 LPL Way
Fort Mill, SC 29715
All information included in this profile is accurate as of February 23, 2022. For more information, please consult LPL Financial’s website.
We will use this information to find the right advisor near you
LPL Financial was founded in 1989 after the merger of two smaller brokerage firms, Linsco and Private Ledger. With approximately 16,500 advisors and close to 18,000 licensed insurance agents on its staff, LPL Financial is owned by LPL Financial Holdings, a publicly traded firm.
Advisors with various firms often choose to affiliate with LPL to tap into the firm’s technology, investment research and business building support, for which the firm earns a fee. LPL advisors maintain their own relationships with clients and negotiate their own fees and service offerings independently. LPL does not sell any proprietary financial products, so advisors are free to recommend whichever investments and financial products they believe are in their clients’ best interests.
The minimum amount of assets required to work with an LPL advisor varies depending on the service you receive. LPL does not have a minimum asset requirement for its financial planning, consulting or research services. For customized investment advisory plans, the investment minimum is up to the discretion of the advisor and is detailed in the client agreement.
Clients who opt to use one of the firm’s portfolio programs will be subject to minimum requirements that vary by program. Minimums start as low as $5,000 for Guided Wealth Portfolios and go up to $250,000 for Personal Wealth Portfolios.
LPL’s financial advisors offer a wide range of financial planning and advisory services, such as budgeting, financial projections and insurance products, though not all advisors offer every type of service. Among the services LPL advisors may offer are:
In addition to the services that LPL advisors provide directly to clients, when advisors affiliate with LPL Financial, they get access to a range of services to help them build and manage their businesses. This includes business building ideas, compliance and technology support, investment research and the execution of trades.
Because LPL advisors work independently, investment approaches and strategies vary from advisor to advisor and from client to client. Advisors can offer customized investment advisory services, and LPL also provides advisors with several programs for investing client funds.
LPL Financial’s Strategic Asset Management program, for example, allows a high level of customization so clients can choose to exclude certain investments or emphasize others. The program offers access to a full range of investment options, including:
Advisors who want to take a more hands-on approach with their high net worth clients can use a separately managed account wrap program from LPL Financial called Manager Select. With this program, LPL reviews and recommends outside institutional portfolio management firms for inclusion.
For advisors who don’t want to create customized portfolios, there is also the option to invest clients’ money in one of LPL Financial’s model portfolios. These portfolios — which include Personal Wealth Portfolios, Model Wealth Portfolios, Optimum Market Portfolios and Guided Wealth Portfolios — are professional asset allocation strategies that are created, managed and monitored by LPL Financial. Mutual funds and ETFs make up the investments within these portfolios, but the exact mix will depend on a client’s responses to an online questionnaire about their financial goals, investment horizon and risk tolerance.
It’s up to LPL advisors to determine how to charge for their services. Advisors use several fee types, including a fee based on a percentage of assets under management, hourly fees, fixed fees and commissions. Fees are negotiated between clients and their advisors and detailed in the client agreement. All fees are paid directly to LPL Financial, and LPL then shares a portion with the independent advisor representative.
That said, the firm typically charges for financial planning consulting services on an hourly or per plan basis, which is a flat rate. The maximum hourly fee that LPL advisors will charge is typically $500 per hour, while the maximum flat fee is typically $20,000.
For customized advisory services, LPL typically charges based on a percentage of assets under management. A client’s rate will be set out in their agreement with the firm. LPL states in its Form ADV that the maximum rate it generally charges is 1.50%.
Along with the account fees, clients may pay other miscellaneous administrative or custodial-related fees and charges. Clients are notified of these fees when they open an account, and LPL provides clients with a list of fees on its website.
LPL Financial has had a long history of disciplinary disclosures, many of which are centered around the firm’s failure to properly supervise its brokerage practices. The firm has been ordered to pay fines and restitution as a result. For reference, the Securities and Exchange Commission (SEC) requires all registered investment advisors to disclose any legal, regulatory or criminal event that is material to how a client evaluates the business or the integrity of the management team in their Form ADV paperwork.
In one case, LPL reached a settlement with the SEC that found LPL wilfully violated a section of the Advisers Act by providing inadequate disclosure to clients of a conflict of interest related to the firm’s receipt of 12b-1 fees and its selection of mutual funds that pay such fees. The SEC ordered a payment to affected investors totaling around $9.3 million.
For more information and a more complete summary of the firm’s disciplinary history, visit LPL Financial’s Investment Adviser Public Disclosure (IAPD) page.
If you are interested in working with an advisor at LPL Financial, you can find an advisor near you by searching on the firm’s website. You can either search for a specific advisor by name or see a list of advisors in your area.
The exact onboarding process will vary from advisor to advisor. Once you are working with an advisor, you can expect to get monthly or quarterly statements, depending on what kind of account you have and the amount of activity in your account.
LPL Financial has advisors across the country, and the firm has jurisdiction to do business in all 50 states, as well as Washington, D.C. Its Form ADV lists physical offices in the following locations:
With LPL Financial’s vast network of affiliated advisors, potential clients should be able to find an advisor who can address their needs. However, LPL Financial’s size does bring downsides. The firm has faced numerous disciplinary actions in recent years, and fees and available services can vary from advisor to advisor. Some investors may prefer a smaller, more intimate advisory practice with fewer potential conflicts of interest and a more personalized feel.
That being said, choosing a financial advisor is a personal decision that depends on your preferences and unique needs. Be sure to research multiple firms to ensure you find the right financial advisor for you.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.