Fee-only wirehouse breakaways choose LPL as custodian

A multiyear push by the nation’s largest independent broker-dealer to appeal to RIAs is paying off, as a wirehouse breakaway team chose LPL Financial as custodian for its newly launched fee-only practice.

Financial advisors Jennifer Kirby and Frank Granizo of Talisman Wealth Advisors left Merrill Lynch and dropped their FINRA registrations, picking LPL over many suitors in the process, Kirby said in an email exchange. LPL announced the Mountainside, New Jersey-based firm’s move on May 20, noting that the team managed $150 million in client assets with its prior firm.

Kirby and Granizo “had been kicking around going independent” since they first teamed up at Merrill in 2018 and began their due diligence by speaking with wirehouse breakaways and the growing number of RIA consolidators, platforms, custodians and BDs in the channel, Kirby says.

LPL Financial

“We did a lot of homework and spoke to dozens of people,” she says. “As a wirehouse breakaway we needed time to get comfortable with the space and the spectrum of options from partial to full independence. Ultimately, we received great advice from a person we trust who said, ‘Why wouldn’t you just go full RIA?’ When we took a hard look, the answer was, ‘Why not?’”

Representatives for Merrill Lynch didn’t immediately respond to a request for comment on the move.

While LPL doesn’t disclose its overall number of fee-only advisors, it has more than 450 hybrid RIAs with 5,000 advisors using their own RIA rather than LPL’s corporate entity, according to its annual report. Another portion of fee-only LPL advisors use the firm’s corporate RIA.

Alongside its launch of an employee affiliation and a dedicated breakaway channel, LPL has made RIA services a focal point of its expansion efforts.

In recent months, the firm tapped five ex-TD Ameritrade recruiters on its way to a record 17,672-advisor headcount. While LPL is classified as an IBD, it has always had a massive amount of assets under management: with $179.2 billion in its hybrid RIAs and $317.5 billion in its corporate RIA, the firm reported nearly $500 billion at the end of the first quarter. There were, however, notable recruiting losses among the firm’s hybrid RIAs just three years earlier.

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The ongoing revamp of LPL’s custodial services includes automation of operations, removal of paper forms and overhauls of company workflows, CEO Dan Arnold said in the company’s fourth-quarter earnings call, a transcript shows. The company is “continuing to make sure we've got that differentiated solution” for RIAs, he said in response to an analyst’s question.

“We're investing in our capabilities and resources that we believe match that growing opportunity set as we do expect, over the next few years, more advisor movement or churn across that space,” Arnold said. “We believe we can put together an interesting, differentiated solution that will contribute to our ongoing organic growth and be a nice contribution to increasing that organic growth rate.”

The firm’s latest custodial clients dropped Merrill Lynch on Feb. 25, according to FINRA BrokerCheck. Talisman officially registered as an RIA on April 15, SEC records show. Kirby spent her entire previous eight-year career with the wirehouse, and Granizo had been with Merrill for all of his 21 years in the industry. The practice primarily serves business owners, corporate executives and their families, Kirby says.

“The trend to independence is clear and gathering steam,” she says. “Over time, we saw that the offerings available outside the wirehouse model — from investments, to planning tools, to fintech — are just getting better and better. Plus, we felt that we are at a stage of our career where we still had time to build something really appealing to our clients and us.”