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LPL Breakaway IFP Launches Independent Broker-Dealer

By Mrinalini Krishna May 23, 2019

More than a year after declaring its intentions to break away from LPL Financial, Independent Financial Partners has launched its independent broker-dealer. The firm announced the official termination of its contract with LPL on Wednesday and will now begin the process of repapering more than 200 advisors it brought along, according to a press release.

IFP has been in a very public war of words with LPL about the number of advisors it would take with it in its independent venture. While with LPL, IFP’s hybrid RIA and OSJ was affiliated with 460 advisors, but the firm begins its operations with less than half that figure.

IFP CEO William Hamm spoke to FA-IQ about the biggest challenges of the transition and his expectations for 2019.

Q: What was the biggest challenge in launching the independent broker-dealer?

A: The biggest challenge so far is obviously the transition. Whenever you move over 200 advisors and close to 30,000 accounts, there’s always new issues that come up that you just can’t avoid, but that’s just the logistics of that. That’s going fairly smoothly right now and we’re approving accounts left and right. There’s nothing outside of a couple of pieces of technology that we’re using taking longer to get up and running. Other than that, everything’s been pretty much according to the game plan.

Q: What are the next steps in this transition?

A: To finalize the transition. We think we will [move] 98% of our accounts over within 30 to 45 days, because so much paperwork for it has already been done. The next step is to just get to normal operations. And then we’re in a fairly strong recruiting cycle, so we’ll be continuing to ramp that up, although it’s been stronger than we originally intended already.

William Hamm

Q: How has your tie-up with financial partners Pacific Current Group and NexBank helped you set up the broker-dealer? In what areas was the capital deployed?

A: It’s helped in purchasing and implementing the majority of the new technology that we are putting in place. They’re helping from a recruiting perspective, in terms of transition capital made available. The third, and maybe more important [factor] than the first two [is] I think they lend some additional credibility to what we’re doing … the due diligence process we had to go through for them to come on board was very extensive.

Q: What is your outlook for 2019? Any projections for where you would want to end the year?

A: Projections are going to be estimates. But based on the recruiting pipeline we have, we’re leaving with around 220-223 advisors and we’ll be adding another 25 or 26 in the next two months. So that’ll put us up to 250. I think there’s a reasonable chance we could be a 300 advisory by the end of the year.

*This interview has been edited for both brevity and clarity.