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Bill Hamm’s IFP builds its tech stack ahead of LPL exit

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As Bill Hamm’s Independent Financial Partners prepares to leave LPL Financial to launch its own broker-dealer, the firm is bulking up on proprietary and third-party software.

IFP is developing its own digital platform for advisors dubbed Advisor[x], rolling out its own Facebook and Google-like tools and integrating three software systems for the new IBD slated for opening in 2019, according to Chris Hamm, the firm’s COO and Bill’s son.

The Tampa, Florida-based firm represents one of LPL’s largest hybrid RIAs and offices of supervisory jurisdiction, with about $10 billion in assets under management and more than 520 advisors. Some of those advisors, however, have since defected to other major OSJ enterprises at LPL. When the elder Hamm announced in April that IFP would form a new IBD, that news triggered a recruiting fight among the OSJs.

Now, Bill Hamm says IFP has also been recruiting in a major way with practices outside LPL, to the tune of some $22 million in annual production. And, just like a former Triad Advisors practice which followed a similar path by starting its own affiliated IBD in 2016, his son describes the process as challenging but liberating.

Both the Hamms and the firm’s advisors are coming up with a variety of ideas for how the firm’s tech and operations will work under the IBD next year, and IFP will be executing a lot of them, Chris says.

“The knowledge that you gain and the freedom that you have to do all that is very rewarding, but it also allows us to uncover technology that we never would have uncovered otherwise,” he says. “Everything that we’re doing as a broker-dealer is borne from the needs of the advisor.”

IFP has struck contracts for tech integrations with digital account-opener Agreement Express, AI and machine learning-powered compliance tool Beam Solutions and cloud-based, API-capable compensation management and reporting software Xtiva, the firm said in a press release on Sept. 26.

The firm, which has selected Pershing as its primary custodian, is also developing a series of proprietary tech tools. IFP is currently testing its Advisor[x] interface, with functionality on multiple customer relationship management platforms, Chris says.

An internal social media network will work like Facebook and a resource library within the platform will operate like a search engine. Additionally, IFP has also planned an application allowing advisors to make home-office requests and check their status, along with the employee handling them.

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Ensuring compliance and building out infrastructure make starting your own BD a costly undertaking, notes David Millican, co-founder of ACG Wealth, an RIA, and the CEO of Arkadios Capital, an Atlanta-based IBD.

Millican knows the challenges well, having successfully blazed the trail now chosen by Hamm, although he notes the RIA was smaller than IFP and more niche-oriented toward high-net-worth clients. Including ACG, Arkadios now has 55 advisors on pace to generate more than $13 million in revenue in 2018.

The projected total would more than triple the $4 million in revenue produced by Arkadios last year. Four new home-office staff members starting this week in the IBD’s expanded new headquarters will push its head count above 20 from only two — Millican and a compliance staffer — at its launch in October 2016, he says.

Hamm spoke with Arkadios while considering starting his own IBD, according to Millican, who says the process is “definitely liberating, exciting and, truthfully, it’s fun.”

“We’ve grown a lot faster and had a lot more interest than even I anticipated,” Millican says. “I have no doubt he’ll be very successful.”

On the other hand, Hamm has faced a competitive recruiting fight from other LPL hybrid RIA-OSJs to retain IFP’s current advisors. Robert Russo’s Independent Advisor Alliance has added at least 34 IFP advisors, with nearly a dozen other verbal commitments and 50 others in talks, Russo said last month.

Pat Sullivan and John Hyland’s Private Advisor Group, which is LPL’s largest hybrid RIA, has also reeled in other IFP advisors opting to keep their affiliations with LPL. Earlier this month, Private Advisor unveiled a team of five IFP advisors with $270 million in AUM that elected to remain at LPL.

“We were not anticipating a change, but when IFP decided to part ways with LPL, we conducted due diligence on firms within the LPL family and decided that PAG was the right fit for us,” Tim McKenna, co-founder of Harvest Financial Planning, said in a statement.

None of the departures from IFP have surprised Hamm, he says, adding that he had just had a meeting with a team of prospective recruits producing $7 million per year in revenue. At least 50 other advisors considering IFP generate about $15 million per year, and two firms with a combined 270 advisors have discussed selling their practices to IFP, he says.

“The surprise is the amount of outside interest that we’re getting,” Hamm says. “We’ll have a pretty incredible pipeline of new advisors.”

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