$180M advisor team pursues LPL’s new fee structure, leaves Cetera
Following a standardized fee structure introduced earlier this year, LPL Financial has continued to snatch advisors from competitors like Cetera Financial Group, the largest independent broker-dealer network.
At least three teams have left Cetera for LPL, the No. 1 IBD in terms of revenue, since late July. The moves follow a restructuring in February at Cetera as well as the sale of its majority stake to Genstar in July.
The most recent departures include a team of four women who managed $180 million in client assets at their former broker-dealer, according to LPL.
The RIA, called the Financial Planning Department, is made up of founder Kathleen Hansen, partner Heather Hackett, and Amanda and Amber Reams, sisters-in-law who started out in the industry as CPAs.
“That wasn’t our choice to go to Cetera, and that experience was just not a good one for us,” Hansen says. The team was originally at Girard Securities, which was purchased by Cetera last year. The advisors were not fond of the acquisition, Hansen says.
“It just seemed difficult to get anything done, and their systems were not as easy to use,” Hansen says. Additionally, she was concerned about upcoming changes as Cetera was selling its majority stake.
But the fee structures were the most decisive factor. Hansen noted minimum fees were around 25 to 35 basis points, which made for total fees that were “too high in my book,” according to Hansen.
In comparison, LPL’s corporate RIA slashed its fees at the beginning of the year, standardizing them to five basis points for advisors with $50 million to $100 million in assets and three basis points for advisors with over $100 million.
The team, which operates out of two offices in San Diego and Long Beach, California, is keeping its RIA for planning and consulting services, but is handing the investment side of the business to LPL’s corporate RIA, Hansen says.
“We do our own investment management. We don’t hire outside platforms,” Hansen says. “[LPL has] a platform that allows us to do that.”
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Specifically, the team was drawn to LPL’s strategic asset management account and in-house reporting systems.
Hansen’s team serves a primarily female clientele, she says. Additionally, all the RIA employees are women, including a part-time assistant who helps during tax season.
However, it didn’t start as a female-focused operation. Hansen predominately advised couples, but several of the men have passed away over the years, leaving many female clients that are now in their 90s.
Additionally, she says that mentoring younger women in the industry is not only important, but also helps with succession planning.
Their team has processed 85% of the transfers since arriving to LPL in early August, which Hansen attributes to LPL’s responsive support staff. A month in, she says they are on track to transition every client over to the new firm.
A spokesperson at Cetera declined to comment on the departure.