LPL’s Gary Carrai Shares RIA Insights With InvestmentNews

Gary Carrai:

So there are three trends in the custodial marketplace that we're seeing. One, the industry is moving past a pure custody value to a level of differentiation beyond custody. What else are you doing for advisors? It's around supporting them as a business owner, not just helping them manage their client relationships, but how do we help them as a business owner? The second trend is around hybrid advisors and the support that we deliver, both advisory and brokerage. Hybrid advisors, it's the fastest growing segment of the advisor marketplace, and not all firms do it the same. We have an integrated way of supporting an advisor that also has brokerage business. It's one system that advisors go to and one statement that their clients see. The third trend that we see is really such incredible consolidation in the custodial marketplace, and it's leading to advisors really wanting more competition. So you'll see an expanded set of custodians coming to the market.

So the problems that we're trying to solve beyond just custody services, you think of pure custody. You think of natural record keeping, moving money and placing trades and opening and closing accounts. Those are table stakes really. Then it's what do you do beyond that? So where we focused on investment platforms for example, we have an award-winning models-based platform as the industry moves more towards models than bespoke portfolios. What ways can you help execute that? Technology, we've got an end-to-end technology platform that creates efficiency and lower cost. And then ultimately a suite of business solutions that I mentioned, how do we help the advisor as a business owner? And we have solutions like paraplanning where it eliminates some of the friction on entering information inside of a planning system or marketing support. Advisors are not natural marketers, and there are ways beyond just giving them technology to help them operate. So it's extending beyond pure custody services and other levels of value that are important to the advisor.

We've evolved our practice over the last several years where we offer different ways that advisors can affiliate. And they may come into LPL as an RIA and they may stay forever as an RIA. But we've created different ways that an advisor can work with us. We have a Corporate RIA so if an advisor says, you know, risk and regulation is becoming so significant I'd rather outsource that risk to a firm like LPL, we offer that. We have a W2 solution we call Linsco, where it may be an advisor, hey, I don't have passion for managing my real estate or handling all of the HR issues associated with that. We've got a model that we call Strategic Wealth, where we bundle a segment of solutions for an advisor to make it easier for them to operate their business. We don't believe that there's a one size fits all or a one size fits forever approach for an advisor, and we want to be able to meet them where they are in their journey, which could change from when they started as an advisor for ultimately when they look to exit the practice.

Yeah, so the service landscape is changing considerably, and we're seeing that in the marketplace. More and more firms are moving to a digital only approach or a largely digital approach where if you've got a question and you're an advisor, you're handling that service request digitally. We think that while innovation is great around digital and we support it and we invest in it, that there's no substitute for a dedicated human support. And we believe in that. We're investing in it. We've built skill and training inside of our teams to be able to do that. It's a differentiation for us. And it's service and support, not just in, I've got a question, I need an answer on a new account statement. It's everything from onboarding to questions that come up in service to relationship management to compliance and legal and to escalations that could lead to upper management. What we always say with firms that are dealing with other custodians is if you've got a problem and you need to escalate to an executive, are you able to do that? Do you have that level of access? We do at LPL.