LPL releases outsourced tax planning services for financial advisors

LPL Financial followed through on executives' promises earlier this year to roll out tax planning services from the corporate office for the firm's financial advisors.

The newest subscription service from the firm's Business Solutions unit provides advisory practices with tax professionals for any questions involving clients' accounts, proposals for potential savings in customers' portfolios and methods for applying strategies across the company's various platforms and tools, LPL said on Oct. 24. CEO Dan Arnold previewed the service in his prepared remarks on the company's second-quarter earnings call, and the head of LPL's Services Group, Aneri Jambusaria, had also mentioned the tool under development in an interview with Financial Planning last winter.

"LPL's Tax Planning Services can serve as an extension of the advisor's team," LPL Senior Vice President of Planning and Advice Services Kraleigh Woodford said in a statement. "We believe that there is an opportunity for financial advisors to differentiate themselves by offering in-depth strategies that can proactively preserve and enhance client portfolios. With Tax Planning [Services], advisors can now confidently deliver customized tax analysis and planning services to clients directly, instead of referring tax-related issues to accountants or other tax specialists."

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In the second quarter, the number of Services Group subscriptions across "professional services," "business optimizers" and "planning and advice" jumped 34% year over year to 5,238, while annualized revenue rose 22% to $39 million.

"As we work with advisors to increase the utilization of existing services, we're also continuing to create new services, such as our tax planning solution, which is part of our broader suite of comprehensive advice and planning services," Arnold said on a call with analysts. "This new solution helps enable tax-intelligent advice that can deliver material savings to clients and help further differentiate an advisor's value proposition. This service is receiving positive early feedback and demand in the marketplace, while also unlocking interesting synergies with our existing services portfolio."

Jambusaria told FP in a March 1 interview that the company developed the tax resources after receiving feedback from advisors.

"Tax planning is something that we heard really loud and clear from our advisors, especially once we launched our paraplanning service," she said. "Many folks were looking to expand their value proposition into tax planning. It is one of those growing areas of value for financial advisors to provide, but many folks just felt like they didn't always have access to the tax planning expertise that they would need to be able to offer that service. And so we've been piloting our tax planning offering that we're hoping to launch this year, and we've built a team of in-house tax planning experts that our advisors can tap into for that purpose."