CHOOSING THE RIGHT PARTNER FOR AN ENHANCED CLIENT EXPERIENCE
INSIDE: Scale, Stability, and Value | Your Choice Matters | Importance of Quality Investment Advice | The LPL Transition Process
Most quality advisors DRIVE BUSINESS BY ENHANCING THE CLIENT EXPERIENCE who change firms for Your relationships with your clients are what drive your practice. The the right reasons move strength of that connection has long been lauded as far more powerful than the overwhelming the relationship advisors have with their broker/dealer. In fact, in a recent majority of their assets industry study, more than half of responding advisors said the ability to within the first two place client needs first was the primary driver for making the move to pursue independence.1 months, and generally hit 100% of their Now, according to a recent Market Strategies International report,2 recruited assets by the investors are also placing importance and scrutiny on the quality of the ninth month.3 firms their advisors choose to affiliate with and the firms’ ability to meet their needs. Several factors are driving this, including a demand for increased transparency and lower fees, political and economic uncertainty on both a global and domestic level, and the advent of automated advice platforms. Meeting the evolving needs of investors may be causing some advisors to reconsider their existing firm relationship and explore the flexibility offered by independent broker/dealers. While increased autonomy
Advisors are more likely to retain client relationships in fee-based accounts than transactional accounts, at 91% and 89%, respectively. Hybrid households—which include both fee-based and transactional accounts—are the most likely to stay, at 95%.4 and the opportunity to build their own business were considered positive aspects “Firms with a track by nearly three in four advisors responding to the Private Advisor Group/ record of making it WealthManagement.com study, transitioning pitfalls and client resistance were hassle free to transact most likely to be considered negative aspects. with enjoy the largest The experience you cultivate for your clients can make the difference between opportunity to enhance practice growth and attrition. It’s critical for you to operate in an environment that customer satisfaction.” gives you the ability to create a high-quality, personalized client experience model to increase the strength and longevity of your relationships. If you’re currently – Market Strategies partnered with a firm that doesn’t provide the right tools to maximize the service International, you provide, having these deeper relationships in place gives you a greater chance December 2016 of maintaining them as you transition your practice.
In the following, we examine the top drivers of client loyalty and satisfaction among affluent investors, including firm stability, offering, and quality of investment advice.
The Role of Scale and Stability in Driving Client Loyalty
Scale and stability are major factors when choosing a firm to align with to grow your practice, due to the important benefits they provide you and your clients.
According to the Market Strategies International report, distributor financial stability is a leading driver of investor satisfaction, followed closely by ease of doing business. The report states that firms with a track record of making it hassle free to transact with enjoy the largest opportunity to enhance customer satisfaction. Importantly, both aspects can also have the most substantial negative effect if customers are unsatisfied.
Choosing a firm with both a history and commitment to leveraging its scale to reinvest in the programs and tools that enable advisors to meet the changing needs of their clients and the marketplace, in an efficient and cost-effective manner, can mean the difference between delivering a highly customized versus a highly commoditized client experience.
The client experience you deliver is directly impacted by the resources you can readily access: advisor-driven advisory programs, advanced trading platforms, state-of-the-art technology, and industry-leading consultants bringing specialized knowledge and expertise in areas including advisory, insurance, retirement planning, and more. Those resources matter, as there’s a direct correlation between the level of service and support advisors receive from their firm and their ability to deliver a scalable, high-quality client experience that doesn’t adversely impact profit margins.
Choice Matters
Increasingly, independent advisors are seeking what’s best for their practice, clients, and lifestyle—and fortunately, they have more options than ever in determining how to structure their practice to best serve their clients’ needs. These include opening your own practice, joining an established office of supervisory jurisdiction (OSJ), merging with or acquiring another firm, aligning with a bank or credit union, or establishing your own registered investment advisor (RIA) firm, among others. How
JOINLPL.COM LPL FINANCIAL 2 you choose to structure your business has a direct impact on the services, and overall experience, you’re able to offer clients now and in the future.
No matter how you envision the future of your practice, a firm with the scale and flexibility to accommodate a broad range of business models will better enable you to grow your business, your way. Whether you choose a structure that’s fee based, commission based, or a combination of the two, it’s important to select a firm offering a fully integrated platform providing support from dedicated teams of experienced professionals focused exclusively on your practice.
Regardless of the option you choose, independence means you own your book of business and you keep more of the revenue you generate. This provides you the freedom to:
Serve your clients in the manner that best meets Purchase another advisor’s book their individual needs to augment your own Design a unique, scalable client experience Sell your business on your terms Grow your business based on your goals and timeline
Importance of Quality Investment Advice
While client experience, practice structure, and service options play a significant role in overall satisfaction, the quality of investment advice available to clients remains a core differentiator, especially among the affluent and high net worth. Despite increasing competition among advisors, firms, and automated platforms, few firms achieve above- average satisfaction ratings for “retirement planning services” and “quality of investment advice.” According to Market Strategies International, this is a red flag for firms, as superior guidance is a key driver for brand consideration and an integral component of the overall advisor/client relationship.
Meeting the broad range of your clients’ wealth management needs requires an open-architecture investment platform with access to the broadest range of products and services, advisory programs that meet different clients’ needs, and the capabilities and tools advisors require—from analytics, reporting, and portfolio management tools, to financial planning and CRM software.
In addition, technology, operations, and compliance must be fully integrated to ensure efficiency, precision, and transparency in service delivery. Instant, 24/7 access to account and product information from an integrated client and practice resource platform is also critical for providing clients with a seamless end-to-end experience. A COMMITMENT TO EXCELLENCE At LPL Financial, our advisor-centric business model is built on the belief that advisors aren’t just a part of our business; they’re the reason for it. We believe in the power of the advisor/client relationship, and enabling advisors to consistently provide a high-value experience is incorporated into everything we do. Whether it’s innovating new technology to better serve you or planning educational events around the nation, our business is supporting you in running yours.
Helping advisors attract and retain strong and lasting client relationships is paramount to helping them grow their successful businesses in the manner they choose. Our emphasis on the top drivers of client loyalty, including financial stability, quality of investment advice, fee transparency, and a highly competitive offering, has led to advisors enjoying the strongest client loyalty among firms surveyed.2
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JOINLPL.COM LPL FINANCIAL 3 LPL Achieves Highest Scores for Investor Loyalty and Satisfaction
A December 2016 study measuring the impact of brand and loyalty on revenue in the affluent investor marketplace reported that LPL earned the highest loyalty score among its primary clients. In addition to earning a spot in the top five in seven out of 10 areas evaluated, LPL tops the leaderboard for highest satisfaction score in the following three categories:2
Financial stability Quality of investment advice Fees and expenses
Distributor Rankings Across Key Loyalty Drivers
2016 Firm Rank Top Performers 2016 Firm Rank Top Performers
Financial 1 LPL Financial 93% Retirement 1 Edward Jones 89% Stability Planning 2 Voya Financial 93% Services 2 Raymond James 84% 3 USAA 92% 3 LPL Financial 84% 4 Morgan Stanley 91% 4 Merrill Edge 83%
5 Edward Jones 91% 5 Morgan Stanley 83%
Quality of 1 LPL Financial 91% Range of 1 Raymond James 96% Investment Investment 2 Morgan Stanley 89% 2 Morgan Stanley 93% Advice Products and 3 Raymond James 86% Services 3 Merrill Edge 90%
4 USAA 85% 4 LPL Financial 88% 5 Edward Jones 85% 5 Voya Financial 88%
Fees and 1 LPL Financial 85% Easy to Do 1 Edward Jones 93% Expenses Business 2 Scottrade 85% 2 Voya Financial 93% With 3 Vanguard 78% 3 Raymond James 92% 4 USAA 77% 4 LPL Financial 92% 5 TD Ameritrade 64% 5 USAA 90%
Quality and 1 Raymond James 96% Clarity of 2 Morgan Stanley 92% Statements 3 LPL Financial 92% 4 USAA 90% 5 Vanguard 87%
JOINLPL.COM LPL FINANCIAL 4 If your firm is hindering your success and limiting your value, now is the time to move to one that treats you as a client, not as a number. To us, clients matter most. LPL Stands With a rich offering of resources and a transition assistance program that rewards Alone as Primary you for your value today and what you can achieve tomorrow, we’re a destination of Distributor “Star” choice for financial professionals who want more from their experience—and more for their clients, too. Among the 24 leading distributors, Transition planning: Experienced transition planning and implementation LPL earns an specialists support you and your team every step of the way through our impressive Net precision-guided process. Promoter Score Technology: Fully integrated technology is delivered seamlessly through our (NPS) of 70, standing platform, always available when and where you need it. alone as the only Wealth management: Broad choice among advisory programs and services primary distributor 2 provides flexibility in meeting a wider range of sophisticated client needs. “Star.” NPS, a management tool Research: Independent research provides objective advice to assist advisors in used to gauge making informed and confident recommendations for clients. the loyalty of a Marketing and business development: Access to marketing and business firm’s customer consulting specialists to support a broad array of business growth needs. relationships, serves Training: A wide variety of training and continuing education events, as an alternative to conferences, and programs are available to you and your staff. traditional customer satisfaction research and is correlated with The LPL Transition Process revenue growth. For those looking to make a move, the LPL Transition Partners team employs a unique, comprehensive process for precision-guided transition and implementation.
Prepare for Map Your Book Go Live Your Move
We’ll create a We’ll help you find You’ll be guided through comprehensive transition products and solutions every step of the affiliation plan and support you until to help map your book of process so you’re ready you are fully acclimated business to LPL. to meet clients’ needs to LPL. and start conducting business as soon as your licenses transfer.
Move Your Learn How Begin to Grow Business to Transact Business Your Business
We simplify repapering Maximize the use of Transition doesn’t end using customized support LPL technology with transferring clients focused on account and resources with and accounts. It’s just the opening and transfers comprehensive training beginning. We help you to ensure your book is critical to your business. set up a compliant office, transitioned smoothly— introduce you to our growth getting you back to tools, and get you headed business as usual as quickly in the right direction with in- as possible. depth practice and advisory consultation.
JOINLPL.COM LPL FINANCIAL 5 Communicating Change
Our commitment to offering enhanced opportunities to increase client satisfaction levels and loyalty can help provide long-term benefits for you and your clients. To ensure a successful transition, we’ll help you construct a well-thought- out communication plan that includes the following steps: Determine who to communicate with. We’ll advise you on a best-practice approach for segmenting your book of business to determine which clients you’ll want to share your plans with in person or via phone and/or email. This also provides an opportunity to consider any relationships you may not want to bring with you. Leverage existing communications. Use our preapproved client communication materials and templates throughout each phase of your transition from the initial announcement to transition completion. Prepare a letter. We can help you position your messaging in a letter to your clients, explaining when and why you’re making the move, and discussing how a firm with a proven track record in customer satisfaction, combined with increased scale and stability, can help benefit you and your clients as you pursue your respective business and financial goals. Make plans to update your online assets. We’ll introduce you to our professional marketing partners so you can begin work on your new website as soon as possible. Many advisors choose to accomplish this in phases, with an initial landing page ready to go live upon completion of the transition. This also provides you with more time to focus on and build out your website following the transition. Be sure to update your social networking sites as well. Create a welcome package. Get guidance on preparing a client welcome package, introducing clients to your new branding and updated practice information, including updated contact information, office location, website URL, and any additional staff members hired as a result of your move.
Methodology
Market Strategies International’s Cogent Wealth ReportsTM: Investor Brandscape® measures the impact of brand and loyalty on revenue in the affluent investor marketplace. An online survey of a representative cross-section of 3,910 U.S. adults was conducted from June 24 through August 8, 2016. Survey participants were required to have at least $100,000 in investible assets (excluding real estate) and recruited from two online panel sources: Research Now and SSI.
1 Private Advisor Group and WealthManagement.com: Dispelling Myths and Fears of Going Independent; January 2015. 2 Market Strategies International/Cogent Wealth Reports: Investor Brandscape; December 2016. 3 WealthManagement.com: Five Steps to Retaining Clients During a Move, by Mindy Diamond; Nov. 17, 2016. 4 Forbes.com: The Keys to Client Retention, by Andrew Klausner; Jan. 16, 2014.
JOINLPL.COM LPL FINANCIAL 6 YOUR PRACTICE, YOUR WAY
However you envision the future of your practice or program, LPL’s comprehensive support and broad range of innovative business models can help you build and grow your business, your way. LPL understands that independence doesn’t have one single meaning. Whatever lens you view your independence through, LPL is here to support and provide clarity to that vision, whether you want to:
Be an independent financial advisor at LPL with access to custodian services and a fully integrated platform to address the varied needs of your clients.
Leverage the LPL Hybrid RIA model, which allows you to join LPL’s broker/dealer platform while maintaining your RIA firm.
Join an existing practice, bank, or credit union for established infrastructure, structured support, and access to new referral sources.
Specialize in retirement plans, and leverage tools and resources built by retirement plan advisors, for retirement plan advisors.
Bring your entire practice or build one—LPL offers customized clearing, advisory platforms, and technology solutions to help create efficiencies and scalability within your practice.
LPL is committed to your success. Give LPL a call today at (888) 250-2420 or visit JoinLPL.com, and put its capabilities to the test.
LPL Financial and Market Strategies International are not affiliated entities.
About LPL Financial
LPL Financial is one of the nation’s leading financial services means advisors affiliated with LPL are not pressured or companies and a publicly traded company under ticker influenced by LPL to sell its products. Thousands of financial symbol LPLA. The firm’s mission is rooted in the belief advisors nationwide are able to rely on the firm’s tools that objective financial guidance is a fundamental need and resources to help them provide financial guidance and for everyone. LPL does not offer proprietary investment recommendations to help meet their clients’ needs. For products or engage in investment banking activities; this more information about LPL Financial, visit www.lpl.com.
LPL Financial, a registered investment advisor, member FINRA/SIPC. BD-0138-0417 Tracking #1-596589 (Exp. 03/19) JOINLPL.COM JOINLPL.COM LPL FINANCIAL 7