LPL Financial is an organization of independent financial advisors. The firm provides proprietary technology, brokerage and investment advisory services to more than 25,000 financial advisors and hundreds of financial institutions, who in turn serve investors across the nation.
While the firm is headquartered in Fort Mill, South Carolina, LPL offers its services through its network of financial advisors spread out across the country. Because the firm’s advisors function more as contractors than as employees of the company, each advisor may offer slightly different services and a distinct approach. Still, each advisor has access to LPL’s vast independent research and financial products and must also abide by the firm’s regulations.
LPL Financial Background
LPL Financial was created in 1989 when two small brokerage firms, Linsco and Private Ledger, merged. The firms, which are LPL's namesake, were founded long before LPL was established. Linsco was formed in 1968, while Private Ledger was founded in 1973.
The firm became more nationally known in 2005, when LPL sold a 60% ownership stake to two private equity partners, Hellman & Friedman, LLC and Texas Pacific Group. Five years later, in 2010, LPL's parent company, LPL Financial Holdings, Inc., became a publicly traded company on NASDAQ.
LPL Financial Client Types and Minimum Account Sizes
LPL Financial’s advisors work with a wide range of clients. The firm can provide advisory services to the following client types:
- Individuals and high-net-worth individuals
- Individual retirement accounts (IRAs)
- Banks and thrift institutions
- Pension and profit-sharing plans
- Participants in the pension and profit-sharing plans
- Trusts
- Charitable organizations
- State and municipal governments
- Corporations and business entities
The majority of the firm's client base comprises individuals. Though LPL advisors also work with high-net-worth individuals, they work with more than twice as many non-high-net-worth individuals.
LPL Financial does not require a minimum amount of investable assets to access its financial planning, consulting or researching services. However, it does require minimum account levels for its advisory services. Account minimums are specified in the client agreement.
These minimums can vary significantly. For instance, there is a $250,000 account minimum for the firm's Personal Wealth Portfolios, a unified managed account program. At the other end of the spectrum, the firm requires just $1,000 for its Optimum Market Portfolios, which use diversified asset allocation models, require the lowest minimum, at $1,000.
Services Offered by LPL Financial
LPL Financial's advisors are capable of providing clients a wide array of financial products, which include mutual funds, annuities and other tax-efficient investments, domestic and international securities, insurance, fee-based asset management programs, estate and financial planning, trust services, group retirement plans and exchange-traded funds and exchange-traded notes. Notably, the firm does not offer proprietary financial products, so its advisors aren't under pressure to sell certain products.
LPL Financial offers a variety of advisory services and program. Through its independent advisors, the firm provides:
- Wrap programs
- Mutual fund asset allocation programs
- Advisory programs offered by third-party investment advisor firms
- Financial planning services
- Retirement plan consulting services
- Investment research
- An advisor-enhanced digital advice program
- Other customized advisory services
LPL Financial Accounts for High-Net-Worth Individuals
As mentioned before, LPL Financial's individual client base contains more than twice as many individuals as high-net-worth individuals. However, the firm announced in 2016 that it was expanding the resources it provides to advisors and institutions to support high-net-worth clients. The firm has a high-net-worth consulting team dedicated to help advisors better meet the unique needs of affluent individuals.
Investment Philosophy
Because of the firm's structure, its network of advisors may employ different investing philosophies and offer different services. Investment strategies also vary based on the program in which you're enrolled. For example, LPL's Guided Wealth Portfolios offers the following model portfolio options:
- Income with capital preservation
- Income with moderate growth
- Growth with income
- Aggressive growth
LPL says its advisors make recommendations based on clients' objectives, which they recommend that clients determine ahead of the investing process. Also taken into account are risk tolerance and time horizon.
Fees Under LPL Financial
LPL Financial’s fees are dependent upon which service you receive from an LPL advisor. The firm also notes on its Form ADV that it may be compensated through a percentage of assets under management, hourly charges, fixed fees and/or commissions for its investment advisory services.
Clients are usually charged an asset-based fee for the firm’s management and advisory programs. Clients pay the fee to LPL, which then shares the fee with the advisor or institution. The exact percentage of the fee that LPL shares with the investment advisor may vary by program.
For example, advisor fees for the firm’s Guided Wealth Portfolios will not exceed 1%. Its LPL Program fee is 0.35%, which includes investment advice, trading and administrative/custodial expenses. As a result, a Guided Wealth Portfolios client will pay a maximum total fee of 1.35% of assets under management (AUM).
LPL Financial Awards and Recognition
In 2024, Newsweek named LPL one of America’s Most Responsible Companies for the third consecutive year, recognizing its strong commitment to environmental, social and governance (ESG) practices. The firm was also awarded Gold by the Brandon Hall Group in 2022 for its advancements in leadership development. Additionally, several LPL advisors have bene featured in Barron’s Top 1,200 Financial Advisors list.
What to Watch Out For
LPL Financial has nearly 150 regulatory disclosures listed on its Form ADV. In August 2024, the firm paid a $50 million fine to the Securities and Exchange Commission (SEC) after the agency alleged that from at least June 2019 LPL personnel "sent and received off-channel communications that were records required to be maintained." The failures were "firm-wide," the SEC alleged.
Also, keep in mind that LPL advisors may sell securities and/or insurance for additional compensation. As a result, advisors have a financial incentive to recommend certain products and services over others, which constitutes a conflict of interest. While LPL is required to act in clients' best interests a fiduciary, clients should understand when their advisor is acting in a sales capacity.
Opening an Account With LPL Financial
LPL Financial has an advisor locator tool on its website so interested advisors can easily find an advisor. You can search by address, zip code, name or business name/area code. Once you've filled in a field, LPL will provide a list of advisors who match your search criteria. The advisor's name, physical address, phone number and email address are provided, as well as links to driving directions, a detailed map and the advisor's website.
Some advisors who appear in the search may not be registered as an LPL Financial advisor and are instead affiliated with LPL, because their firm has an agreement to use LPL as a custodian for client assets.
Investing Tips for Beginners
- Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- A traditional financial advisor isn’t your only option. If you’re just starting out or don’t have much to invest, a robo-advisor may be a good option. Robo-advisors typically charge lower fees and have lower account minimums.
