With LPL exit complete, Bill Hamm's BD launches with eye on incumbents
Bill Hamm’s Independent Financial Partners hit a few bumps in the road on its way from leaving LPL Financial to starting its own broker-dealer.
Now — more than a year after the announcement of the looming exit of Hamm's Tampa, Florida-based office of supervisory jurisdiction led to a recruiting fight shuffling hundreds of advisors between his firm and LPL — Hamm has reached the firm’s so-called Independence Day.
On May 22, the family-owned firm began submitting its 223 financial advisors’ Form U4 applications to FINRA to mark the technical launch of IFP Securities. The hybrid RIA listed more than 520 advisors last April, when Hamm said he would drop the affiliation with LPL.
IFP needed to “disrupt our business to become a disruptor in our industry,” according to Hamm. The firm has started repapering and transferring client assets to its custodian, Pershing. It also reached an agreement with Riskalyze to offer risk and trading automation services to advisors.
In a year, the firm hopes to be “where everyone else will be in five years,” Hamm says. He vows to be picky about advisor recruits and to have “calculated, well-managed, well thought-out growth” rather than aiming for any particular quantitative goals or a profitable acquisition by another firm.
“We're better able to make decisions and carry out decisions than having an environment where the left hand doesn’t know what the right hand is doing,” he adds. “The other attractive feature that we have is more certainty in terms of planning for the next five or ten years.”
Under the firms’ enterprise agreement, IFP advisors can tap Riskalyze for risk assessment, portfolio analytics and trading automation on the firm’s menu of technology vendors. Hamm’s firm struck several other integration agreements as it ramped up in recent months.
“Launching a new broker-dealer is a rare thing these days,” says Riskalyze CEO Aaron Klein. “Bill is certainly zigging where others are zagging, but we’ve long admired his acumen and we're very, very excited to be partnering with his firm.”
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Riskalyze works with more than 150 BDs — including LPL — and Klein adds that the past year displayed a “great example of how firms in our industry should work together” under such a transition. The process didn’t appear to include any personal insults or technical snafus.
Indeed, Hamm notes there’s a learning curve with running a BD and he’s focused on getting the basics right as the firm transfers assets and starts running its proprietary Advisor[x] platform under the firm’s COO and Hamm’s son, Chris.
While one major team left for another IBD and another opted to launch its own RIA, LPL retained the majority of advisors through its other large hybrid RIA and OSJs. IFP has about 300 fewer advisors and $4 billion less in assets under management after the recruiting onslaught.
Almost all of LPL’s pickups from IFP went to the hybrid RIA channel, Hamm notes, calling it a display of how “the smaller group, the intimacy, the ability to customize things, the strong relationship” all remain increasingly appealing to independent advisors.
IFP expects to add another 32 advisors committed to joining over the next three to four months and another 25 to 30 have expressed strong interest, according to Hamm. Advisors and clients rather than private equity boards or shareholders will be the center of attention, he says.
“Having been an advisor for 34 years, I know what's important to me and my practice and my clients,” Hamm says. “And that's a big part of it.”