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LPL Bets Big on Tech for Further Growth

December 31, 2018

LPL Financial, already touted by many advisors for its top-notch technology, is making an even bigger investment in technology to drive its further growth, according to news reports.

“We’re making a major investment in technology [for] both the future of our enterprise and the value we provide advisors,” Dan Arnold, LPL’s president and CEO, tells Barron’s.

The company spent $120 million on technology in 2018 and plans to increase that to $135 million next year, according to the paper.

For Arnold, these investments serve several purposes when it comes to growing the firm's assets, Barron’s writes. Having an “appealing platform” that’s priced competitively and offers versatility helps LPL attract new advisors, Arnold tells the paper.

Most advisors joining the firm mention its commitment to technology investing as a major draw for them to move to LPL.

Offering a solid platform also helps LPL hold onto to its existing advisors, Arnold tells Barron’s. Digitizing their advisors’ practices, meanwhile, lets LPL lower costs while boosting service experience and scaling, he tells the paper. And client-facing technology improvements can help advisors offer a better experience to their customers, he tells Barron’s.

Technology also plays a major role when it comes to LPL’s acquisitions, according to Arnold, the paper writes. Speaking about LPL’s acquisition of the assets of National Planning Holdings, he tells Barron’s the firm could improve “on the operational front and the integration front,” particularly for a firm of that size — and that’s where introducing new technology could help, Arnold says, according to the paper.

Improvements could come through streamlining data and input, as well as how advisors gather data, he tells Barron’s.

Overall, however, Arnold believes the industry is experiencing a “context shift” when it comes to technology “from thinking about technology as a utility to thinking about that technology as a true asset of the firm,” he tells the paper.

“We brought in a new head of technology about 18 months ago to help lead us on this journey and this transformation,” Arnold tells Barron’s.

One of LPL’s most recent technological improvements has to do with its model wealth portfolio platform, according to WealthManagement.com. The company is running a pilot program that includes the addition of separately managed accounts and risk scores and lets advisors run their own portfolios at a lower price, the web publication writes.

By Alex Padalka
  • To read the Barron's article cited in this story, click here.
  • To read the Wealth Management article cited in this story, click here.