LPL Financial Holdings Inc. (‘LPLFH’ or ‘LPL’) serves the financial advisor-mediated marketplace as the nation’s largest independent broker-dealer, a leading investment advisory firm, and a top custodian.
The company supports nearly 29,000 financial advisors, and the wealth management practices of approximately 1,200 financial institutions, servicing and custodying approximately $1.7 trillion in brokerage and advisory assets. The company provides a wide range of advisor affiliation models, inve...
LPL Financial Holdings Inc. (‘LPLFH’ or ‘LPL’) serves the financial advisor-mediated marketplace as the nation’s largest independent broker-dealer, a leading investment advisory firm, and a top custodian.
The company supports nearly 29,000 financial advisors, and the wealth management practices of approximately 1,200 financial institutions, servicing and custodying approximately $1.7 trillion in brokerage and advisory assets. The company provides a wide range of advisor affiliation models, investment solutions, fintech tools and practice management services, ensuring that advisors and institutions have the flexibility to choose the business model, services, and technology resources they need to run successful businesses.
The company’s most significant wholly owned subsidiaries are:
LPL Holdings, Inc. is a direct subsidiary of LPL Financial Holdings Inc. and is an intermediate holding company of the company’s business.
LPL Financial LLC (‘LPL Financial’) is a clearing broker-dealer and an investment adviser that clears and settles customer transactions.
LPL Enterprise, LLC (‘LPL Enterprise’) is a limited product shelf introducing broker-dealer and registered investment advisor that supports a portion of the company’s institutional businesses, providing brokerage and investment advisory services to the clients of those institutional businesses.
LPL Insurance Associates, Inc. (‘LPLIA’) operates as a brokerage general agency that offers life and disability insurance products and services.
Atria Wealth Solutions, Inc. (‘Atria’) is a holding company for the registered broker-dealers and investment advisors that the company acquired in connection with the acquisition of Atria. Atria has seven introducing broker-dealer subsidiaries, which clear transactions through third-party clearing and carrying firms. The company expects to complete the conversion of assets from these acquired broker-dealers and investment advisors in 2025.
AW Subsidiary, Inc. is a holding company for AdvisoryWorld and Blaze Portfolio Systems LLC (‘Blaze’). AdvisoryWorld offers technology products, including proposal generation, investment analytics, and portfolio modeling, to both the company’s advisors and external clients in the wealth management industry. Blaze provides an advisor-facing trading and portfolio rebalancing platform.
The Private Trust Company, N.A. (‘PTC’) provides trust administration, investment management oversight, and Individual Retirement Account (‘IRA’) custodial services.
LPL Employee Services, LLC and its subsidiary, Allen & Company of Florida, LLC (‘Allen & Company’), along with their affiliate, Financial Resources Group Investment Services, LLC, provide primary support for the company’s employee advisor affiliation model.
Strategy
The company’s strategy is to meet advisors and institutions where they are in the evolution of their businesses, expand the addressable market, provide flexible end-to-end solutions to help advisors differentiate and win investors, create a service experience that delights advisors and institutions and their clients, and help advisors and institutions run high-performing businesses.
Business
Advisor Relationships
The company’s business is dedicated exclusively to its advisors; it is not a market-maker, nor does it offers investment banking services. The company offers no proprietary products of its own, and, as a result, it enables the independent financial advisors and institutions that it supports to offer their clients lower-conflict advice.
The company works alongside advisors to navigate complex market and regulatory environments and strives to empower them to create the best outcomes for investors. In addition, it makes meaningful investments in technology and services to support the growth, productivity, and efficiency of advisors across a broad spectrum of business models as their practices evolve. The company’s advisors are a community of diverse financial services professionals who collectively support approximately 10.0 million client accounts. They build long-term relationships with their clients in communities across the United States by guiding them through the complexities of investment decisions, retirement solutions, financial planning, and wealth management. The company’s services are designed to support the evolution of its advisors’ businesses over time and to adapt as its advisors’ needs change.
The majority of the company’s advisors are independent practitioners who are viewed as local providers of independent advice. Many of the company’s advisors operate under their own business name, with LPL offering assistance with their branding, marketing, and promotion, as well as regulatory review. Generally, advisors in independent channels receive a greater share of advisory fees and brokerage commissions than advisors in captive channels — typically 80-100% compared to 30-50% for captive channels. Most of the company’s independent financial advisors are business owners who, unlike their captive counterparts, also benefit from building equity value in their own businesses. The company also supports advisors through its independent employee advisor affiliation model, where they benefit from a full-service employee relationship with it while generally retaining ownership of their client relationships in exchange for a slightly lower payout than the company’s traditional independent model.
Advisors licensed with LPL Financial as investment adviser representatives conduct fee-based business on the company’s corporate RIA platform, and advisors licensed with LPL Financial as registered representatives conduct commission-based business on the company’s brokerage platform. In order to be licensed with LPL Financial, advisors must be approved through the company’s assessment process, which includes a review of each advisor’s education, experience, and compliance history, among other factors. Approved advisors become registered with LPL Financial and enter into a representative agreement that establishes the duties and responsibilities of each party. Pursuant to the representative agreement, each advisor makes a series of representations, including that the advisor is acting as LPL Financial’s investment advisory representative or registered representative. These advisors also agree not to engage in any outside business activity without prior approval from the company.
LPL Financial also supports independent firms that conduct their business through separate registered investment advisors (‘Independent RIAs’), with advisors who conduct their advisory business through these separate entities. Independent RIAs operate pursuant to the Investment Advisers Act of 1940, as amended (the ‘Advisers Act’), or their respective states’ investment advisory licensing rules. These Independent RIAs engage the company for technology, clearing, and custody services, as well as access to its investment platforms and business services. Advisors associated with Independent RIAs retain 100% of their advisory fees, and in return, the company charges separate fees for custody, trading, administrative, and support services. In addition, some financial advisors associated with Independent RIAs are registered representatives of LPL Financial and access the company’s fully-integrated brokerage platform under standard terms.
For these institutions, the company provides their financial advisors with the infrastructure and services they need to be successful, allowing the institutions to focus more attention and capital on their core businesses. In addition, through LPL Enterprise, the company is able to tailor its offering for the needs of institutions, insurance companies, and product manufacturers that seek support in connection with custom product sets. As an introducing broker-dealer and RIA, LPL Enterprise has the ability to provide key supervisory, compliance, and risk, recruiting, and middle-office technological support to complex institutional clients that manufacture and distribute their own products. Like advisors who are licensed with LPL Financial, advisors who are licensed with LPL Enterprise must be approved through the company’s assessment process and enter into a representative agreement that establishes the duties and responsibilities of each party.
Finally, the company provides support to additional financial advisors who are affiliated and licensed with insurance companies. These arrangements allow the company to provide outsourced customized clearing, advisory platforms, and technology solutions that enable the financial advisors at these insurance companies to offer a breadth of services to their client base in an efficient manner.
Value Proposition
The company is dedicated to making it easy for advisors to do what is best for their clients. Its scale and self-clearing platform enable it to provide advisors with the capabilities they need, and the service they expect, at a compelling price. The company is dedicated to continuously improving the processes, systems, and resources it leverages to meet these needs.
The company supports its advisors by providing front-, middle-, and back-office solutions through its distinct value proposition: integrated technology solutions, comprehensive clearing services, compliance services, consultative practice management programs and training, business services, and planning and advice services, along with in-house research. The comprehensive and increasingly automated nature of the company’s offering enables its advisors to focus on their clients while successfully and efficiently managing the complexities of running their own practice.
Integrated Technology Solutions
The company provides its technology and service to advisors through an integrated technology platform that is cloud-based and web-accessible. The company’s technology offerings are designed to permit its advisors to effectively manage all critical aspects of their businesses in an efficient manner while remaining responsive to their clients’ needs. The company continues to automate time-consuming processes, such as account opening and management, document imaging, transaction execution, and account rebalancing, in an effort to improve its advisors’ efficiency and accuracy.
Comprehensive Clearing Services
The company provides custody and clearing services for the majority of its advisors’ transactions and seeks to offer a simplified and streamlined advisor experience with expedited processing capabilities. Its self-clearing platform enables it to control client data, more efficiently process and report trades, facilitate platform development, and ultimately enhance the service experience for its advisors and their clients.
Compliance Services
The company continues to make substantial investments in its compliance function to provide its advisors with a strong framework through which to understand and operate within regulatory guidelines, as well as guidelines that it establishes. As the financial industry and regulatory environment evolve and become more complex, the company has made a long-term commitment to enhancing its risk management and compliance structure, as well as its technology-based compliance and risk management tools, in order to support the overall effectiveness and scalability of its control environment.
The company’s team of risk and compliance employees assists its advisors through: training and advising advisors on new products, new regulatory guidelines, compliance and risk management tools, security policies and procedures, and best practices; advising on sales practice activities and facilitating the supervision of activities by branch managers; conducting technology-enabled surveillance of trading activities and sales practices; monitoring of registered investment adviser activities for advisors who are investment adviser representatives of LPL Financial or LPL Enterprise; and inspecting branch offices and advising on how to strengthen compliance procedures.
Consultative Practice Management Programs and Training
The company’s practice management programs are designed to help leaders and financial advisors in independent practices and institutions enhance and grow their businesses. The company’s experience gives it the ability to benchmark the best practices of successful advisors and develop customized recommendations to meet the specific needs of an advisor’s business and market, and its scale allows it to dedicate a team of experienced professionals to this effort. The company’s practice management and training services include: personalized business consulting that helps eligible advisors and program leadership enhance the value and operational efficiency of their businesses; advisory and brokerage consulting and financial planning to support advisors in growing their businesses through the company’s broad range of products and fee-based offerings and wealth management services; marketing strategies, including campaign templates, to enable advisors to build awareness of their services and capitalize on opportunities in their local markets; the company’s Liquidity & Succession program, which offers expanded solutions to advisors seeking to monetize their businesses, free themselves from entrepreneurial burdens through the sale of their practices, or simplify their businesses through partial book sales; an advisor loan program for advisors looking to buy another practice; transition services to help advisors establish independent practices and migrate client accounts to the company; and in-person and virtual training and educational programs on topics, including technology, use of advisory platforms, and business development.
Business Services and Planning and Advice Services
The company provides services to advisors in areas critical to the successful operation of their practices, including both business support services to help them run thriving businesses and comprehensive planning services to support them in delivering advice to their clients.
The company’s professional services offerings are delivered through a combination of digital and employee-powered solutions that provide expertise to increase business-level growth and operational efficiency across areas, such as marketing, finance, and business operations. The company’s business optimizer offerings are primarily digital solutions that are designed to support risk management, business continuity, and succession planning.
The company’s planning and advice services are digital and employee-powered solutions that help advisors and institutions expand the breadth and depth of their advice in areas, such as tax planning, paraplanning, and private client support for high-net-worth relationships. The focus of planning and advice services is helping advisors increase marketplace differentiation while limiting additional complexity and risk. The company is expanding its portfolio of services to address new advisor needs while also enhancing its existing solutions to deliver a customer experience.
In-House Research
The company provides its advisors with integrated access to comprehensive research on a broad range of investments. The company shares market analysis and commentary on macro-economic events, manager research, capital markets assumptions, strategic and tactical asset allocation advice, and individual equity coverage. The company’s research team provides advice that is designed to empower its advisors to better serve their clients, including the creation of discretionary portfolios for which it serves as a portfolio manager, available through its centrally managed advisory asset management platforms. The company is able to provide objective and unbiased investment research to its advisors and their clients without the conflict of proprietary products or investment banking services.
Product and Solution Access
The company does not manufacture any financial products. Instead, it provides its advisors with curated access to a broad range of fee-based, commission, cash, and money market products and services. The sales and administration of these products are facilitated through the company’s technology solutions, which allow its advisors to access client accounts, product information, asset allocation models, investment recommendations, and economic insight, as well as to perform trade execution.
Fee-Based Platforms and Support
The company has various fee-based platforms that provide centrally managed or customized solutions from which advisors can choose to meet the investment needs of their clients, including wrap-fee programs, mutual fund asset allocation programs, an advisor-enhanced digital advice program, advisory programs offered by third-party investment advisor firms, financial planning services, and retirement plan consulting services. The fee structure of the company’s platforms enables its advisors to provide their clients with higher levels of service while establishing a recurring revenue stream for the advisor and for the company. The company’s fee-based platforms provide access to mutual funds, exchange-traded funds, stocks, bonds, certain options strategies, unit investment trusts, institutional money managers, and no-load multi-manager variable annuities.
Commission-Based Products
Commission-based products include those for which the company and its advisors receive an upfront commission and, for certain products, a trailing commission. The company’s brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and education savings plans, and insurance. The company regularly reviews the structure and fees of its commission-based products in the context of retail investor preferences and the changing regulatory environment, as well as the competitive landscape.
Client Cash Programs
The company’s client cash programs include two Federal Deposit Insurance Corporation (‘FDIC’) insured bank sweep vehicles, a client cash account, and a money market account, which enable its advisors to manage their clients’ cash balances.
Other Services
The company provides a number of additional tools and services that enable advisors to maintain and grow their practices. Through its subsidiary PTC, the company provides custodial services to trusts for estates and families. The company offers retirement solutions for commission- and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors through LPL Financial and LPL Enterprise. The company offers proposal generation, investment analytics, and portfolio modeling capabilities, and provides an advisor-facing trading and portfolio rebalancing platform.
Regulation
LPL Financial is a clearing broker-dealer registered with the SEC, a member of the Financial Industry Regulatory Authority (‘FINRA’), and a participant in various clearing organizations, including the Depository Trust Company, the National Securities Clearing Corporation, and the Options Clearing Corporation. LPL Financial is registered as a broker-dealer in each of the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The rules of the Municipal Securities Rulemaking Board, which are enforced by the SEC and FINRA, apply to the municipal securities activities of LPL Financial. LPL Financial is registered as an introducing broker-dealer with the Commodity Futures Trading Commission (‘CFTC’) and is a member of the National Futures Association (‘NFA’). LPL Financial is regulated by the SEC, FINRA, CFTC, and NFA.
LPL Financial’s margin lending is regulated by the Federal Reserve Board’s restrictions on lending in connection with client purchases and short sales of securities, and FINRA rules also require LPL Financial to impose maintenance requirements based on the value of securities contained in margin accounts.
The company’s broker-dealer subsidiaries’ recommendations to retail customers are subject to a standard of conduct specified by the SEC (‘Reg BI’).
The company’s subsidiaries that are registered as investment advisers with the SEC, including LPL Financial and LPL Enterprise, are subject to the requirements of the Advisers Act, and the regulations promulgated thereunder, including examination by the SEC’s staff.
Certain subsidiaries, including LPL Financial, LPL Enterprise, LPL Employee Services, LLC, PTC, Fiduciary Trust Company of New Hampshire, and LPLIA, are subject to the Employee Retirement Income Security Act of 1974, as amended (‘ERISA’), Section 4975 of the Code, and to regulations promulgated under ERISA or the Code, insofar as the subsidiaries provide services with respect to plan clients, or otherwise deal with plan clients, plan participants, and retirement, health, and educational accounts that are subject to ERISA or Section 4975 of the Code. ERISA imposes certain duties on persons who are ‘fiduciaries’ (as defined in Section 3(21) of ERISA) and prohibits certain transactions involving plans subject to ERISA and fiduciaries or other service providers to such plans. Section 4975 of the Code prohibits certain transactions involving ‘plans’ (as defined in Section 4975(e)(1), which include, for example, IRAs and certain Keogh plans) and service providers, including fiduciaries (as defined in Section 4975(e)(3)), to such plans. Section 4975 imposes excise taxes for violations of these prohibitions.
The U.S. Department of Labor (‘DOL’) has a ‘five-part test’ defining fiduciary ‘investment advice’ under ERISA and the Code (the ‘Five-Part Test’). Under this test, providing non-discretionary investment advice or recommendations with respect to a covered account can cause a person to be a fiduciary under ERISA and/or the Code if the advice is provided for a fee, on a regular basis, and subject to a mutual understanding.
Through the company’s subsidiary, PTC, the company offers trust, investment management oversight, and custodial services for estates and families. PTC is chartered as a non-depository national banking association. As a limited purpose national bank, PTC is regulated and regularly examined by the Office of the Comptroller of the Currency (‘OCC’).
In addition, sanctions administered by the United States Office of Foreign Asset Control prohibit the U.S. persons from doing business with blocked persons and entities or certain sanctioned countries. The company has established policies, procedures, and systems designed to comply with these regulations and works continuously to improve and strengthen its regulatory compliance mechanisms.
To the extent they are applicable to the company, it must comply with federal and state information-related laws and regulations in the United States, including the Gramm-Leach-Bliley Act of 1999, SEC Regulation S-P, the Fair Credit Reporting Act of 1970, as amended, and Regulation S-ID, as well as the California Consumer Privacy Act, and further potential federal and state requirements.
Trademarks
Access Overlay, Atria Wealth Solutions, BlazePortfolio, CLIENTWORKS, LPL, LPL Financial (& Design), Manager Access Network, Manager Access Select, and OMP are the company's registered trademarks; and ADVISORYWORLD, CLIENTWORKS CONNECTED, ALLEN & COMPANY OF FLORIDA, LLC, and THE PRIVATE TRUST COMPANY, N.A. (& Design) are among the company's service marks.
History
LPL Financial Holdings Inc. was founded in 1989. The company was incorporated in Delaware in 2005.
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