$36B wealth manager eyes credit union expansion with LPL

With its mega-move to LPL Financial, a wealth manager and insurer aims to expand access to planning services among members of credit unions.

The nation’s largest independent broker-dealer secured what will, in all likelihood, be the biggest recruiting move in the sector of 2022 when CUNA Brokerage Services agreed last week to align its wealth management business spanning 550 financial advisors and $36 billion in client assets with LPL’s Institution Services. Bank and credit union investment programs increasingly are seeking to outsource compliance and operational tasks while dropping their own BDs and RIAs or cutting them drastically. That's making them hot recruiting targets among IBDs.

In the case of Madison, Wisconsin-based CUNA Brokerage, the wealth management arm of insurer and financial services firm CUNA Mutual Group, the decision came down to its plans to boost wealth management services among credit unions, President Rob Comfort said in an interview. Only roughly 1,000 out of 6,000 credit unions nationwide offer wealth management, and just 3% of members at the institutions with planners use the services, according to Comfort.

“More than likely, they're not getting helped at all with these critical needs,” he says. “To really fulfill our mission, we aligned with an integrated technology platform that will help us reach credit union members in multiple ways.”

Although LPL has always been a force in the bank channel with more than 2,500 advisors at 800 institutions, the CUNA Brokerage deal comes after M&T Bank and BMO Harris agreed last year to bring about 285 advisors and $35 billion in client assets to LPL in 2021. With institutional moves posing more complications and often representing many more assets than a standard practice’s transition, CUNA Brokerage is expected to complete the migration to LPL’s BD, RIA and custodial services early next year.

Addepar, Commonwealth, Steward Partners, Advisor Group, Prudential, Cetera, LPL Financial, Raymond James, NASAA: News and moves

June 18, 2021 2:40 PM

The firm has been on a multiyear recruiting tear: After two more announcements in the past week involving practices each managing more than $1 billion in client assets, LPL has grabbed five out of the 13 teams of that size or greater changing firms this year in the IBD sector, according to Financial Planning’s tracking of company recruiting moves. In the past three years, the firm’s headcount has surged by more than a net 1,600 advisors to reach a record 17,672.

“We try to be the best possible partner that we can be for those advisors,” says Rich Steinmeier, LPL’s divisional president of business development. “We have a reverence for advisors. What you see culminating now is that belief, plus a privileged position in the ecosystem to be able to invest in capabilities.”

In fact, Steinmeier adds, the company is only in the early stages of its recruiting success. LPL’s ability to serve fee-only planners as an RIA custodian on one side all the way to employee and bank and credit union advisors at the other is driving the firm’s substantial growth, says recruiter Jodie Papike of Cross-Search.

Recruiting

$36B credit union IBD to move to LPL in firm’s latest massive win

June 14, 2021 12:23 PM

“They literally check every box in the financial services industry of ways that advisors can affiliate with them,” Papike says. “It really covers all aspects of the marketplace.”

The broadened scope of LPL’s recruiting has arrived at a good time for CUNA Brokerage and firms of its type searching for larger partners in an era of higher compliance and tech costs, Gavin Spitzner of Wealth Consulting Partners said in an email.

“What this deal tells us again is that custody and clearing are largely commoditized and self-clearing firms with scale that can offer that in combination with value-added technology, practice management and other growth-based support at attractive economics while helping firms offload risk are well-positioned for further industry consolidation,” Spitzner says.

For his part, Comfort agrees with Spitzner’s view of the direction of the marketplace, though he says CUNA Brokerage offers credit union-based advisors relationship management, strategic planning and data analytics that go beyond commoditized services. Although he spent five years with LPL before joining CUNA Brokerage in 2017, he notes that the company spent roughly a year of due diligence with an outside consulting firm before picking the No. 1 IBD.

“It frees us up to focus on what we really feel are the unique components of our value proposition,” Comfort says. “Our arrangement with LPL was really customized for what we need so that we could continue doing the things that we're really good at. ... We felt like that could really move the needle and make a difference, so that’s what's really exciting about this.”