LPL Financial Review

Pros and Cons of LPL Financial

Types of Clients

LPL Financial’s client base primarily comprises both wealthy and non-wealthy individuals, with around 31% of its clients being the former and 68% the latter. However, the firm also serves a range of institutional clientele, including:

• Pension and profit-sharing plans
• Charities
• Banks and thrift organizations
• Trusts and estates
• Corporations
• Government entities
• Sovereign wealth funds
• Investment clubs

LPL generally requires you to meet a minimum account size before you can use many of its portfolio management services. The company notes in its Form ADV brochures that thresholds can vary based on factors specific to your account. For example, accounts with portfolios that take on more complex strategies or allocations may have a higher barrier to entry.

This table displays the minimum account requirements for LPL Financial’s advisory program and services:

Service	Account Requirement
Optimum Market Portfolios (OMP)	$1,000
Guided Wealth Portfolios (GWP)	$5,000
Model Wealth Portfolios (MWP)	$10,000
Strategic Asset Management (SAM) I and II	$25,000
Manager Select	$25,000
Personal Wealth Portfolios (PWP)	$250,000
Financial planning	N/A

Financial Advisor Services

LPL provides many financial advisor services you would find at a typical firm, including both discretionary and non-discretionary portfolio management and financial planning. It also offers wrap fee programs and services geared toward retirement plan sponsors and members.

Below is a breakdown of the firm’s services:

Financial Planning and Consulting

LPL offers financial planning as one of its primary services. As shown in the previous section’s table, this is one of the few products the company provides that doesn’t require you to carry a specific amount of investable assets.

As a client, you’ll have the opportunity to meet with an investment advisor representative (IAR). According to the company’s Form ADV Part 2A, this may involve your professional putting together a comprehensive plan for one or more aspects of your financial picture. In other cases, it could also be a one-off consultation.

The firm lists these as potential areas it can help you plan:

• Your estate
• Retirement
• Investments
• Education saving
• Budgeting
• Managing risk
• Taxes
• Running a business

Investment Advisory Programs

LPL Financial also offers portfolio management under both discretionary and non-discretionary arrangements. The former gives an IAR with the company total authority to execute trades and buy securities on your behalf, while the latter requires them to receive your approval before any decision occurs.

In either case, the investment management service generally involves working with an advisor to ascertain your goals, risk tolerance, and time horizon. Then, they’ll decide on a target allocation that works for you, and help you maintain your portfolio on an ongoing basis. The company offers many individual programs with different security focuses and underlying strategies:

• Optimum Market Portfolios (OMP) focuses on up to six mutual funds in the company’s “Optimum Fund” family.
• Guided Wealth Portfolios (GWP) is a digital advice program that uses an online platform where you provide information about yourself and your goals. Then, based on these details, it’ll give you a recommended model portfolio.
• Model Wealth Portfolios (MWP) is a program that allows you to invest in portfolios that include any mix of mutual funds, exchange-traded funds (ETFs), exchange-traded notes, closed-end funds, fixed-income assets, and stocks.
• Strategic Asset Management I and II (SAM) are programs that comprise an array of investments, such as mutual funds, ETFs, interval funds, variable annuities, alternatives, and real estate investment trusts (REITs).
• Personal Wealth Portfolios (PWP) is a discretionary program that includes portfolios made up of mutual funds, ETFs, and models constructed by the company that include various equities and fixed-income assets.
• Manager Select is a program that, according to its brochure, allows you to receive services or strategies from a third-party advisory firm. Then, you select between two programs, a separately managed account (SMA) or a model portfolio, each with varying asset allocations.

Fee Structure

LPL Financial uses a fee structure based on the percentage of assets under management (AUM) you have with the firm. The company charges this fee on a quarterly schedule. It operates on a tiered level, where you’ll pay more as your assets grow. In its Form CRS, the company also points out that it may use a flat-fee system for services that don’t require an ongoing relationship, such as a single consultation or plan.

Fees may vary by program and service. The company also notes that rates are up for negotiation between you and your advisory expert. For reference, below is a table that lists the maximum fees for each program:

Program	Maximum Fee (AUM Percentage)
Guided Wealth Portfolios (GWP)	1.0% advisor fee; 0.35% program fee
Model Wealth Portfolios (MWP)	2.35%; manager fee from 0% to 0.60%
Manager Select	2.35%; manager fee from 0% to 0.60%
Personal Wealth Portfolios (PWP)	2.35%; manager fee from 0.15% to 0.60%
Strategic Asset Management (SAM) I and II	2.50%
Optimum Market Portfolios (OMP)	2.50%

Investment Philosophy

Since a central piece of LPL Financial’s advisory business entails helping clients manage their portfolios, it’s critical to understand how the company and your professional, by extension, approach investing. The firm’s investment philosophy and strategies are available in the second part of its Form ADV, both explicitly in Item 8 and if one analyzes each of its services.

LPL supplies its advisors with two separate investment models that may have varying exposure across certain asset classes, named “Diversified” and “Alternative Strategy.” However, the company emphasizes that its professionals have the agency to recommend strategies that they think will fit your goals and objectives well. Therefore, while your portfolio’s construction may derive from the company’s model ideas, it begins and ends with how your expert assesses your needs.

As mentioned, the types of investments you could expect when working with an LPL advisor are also evident when reading the brochures for its products. While a more detailed outline is available in an earlier section of this review, the company tends to use a mix of mutual funds, ETFs, fixed-income securities, and equities when assembling its clients’ portfolios. The exact investments you’ll see, however, will rely on your program and specific circumstances.

Disclosures

LPL Financial LLC maintains registration with the U.S. Securities and Exchange Commission (SEC) as an investment advisor. It’s also a broker-dealer with the Financial Industry Regulatory Authority (FINRA). Therefore, any criminal proceedings, regulatory actions, or arbitrations related to the company become publicly available as disclosures in its filing documents.

According to FINRA’s BrokerCheck, LPL has 249 disclosures. An overwhelming 188 of them are regulatory events, 57 are arbitrations, and the remaining four are bonds. For a more detailed listing and description of the company’s disciplinary information, we recommend reading its most recent Form ADV with the SEC.

Customer Service and Opening an Account

LPL Financial provides two main avenues you can use to contact its customer service. The easiest is its “Contact Us” page. After providing contact information and details about your request, this page allows you to send a message directly to the company. Another method of reaching the firm is by calling (800) 558-7567 for investor-specific questions or complaints or (800) 877-7210 for more general comments or concerns.

If you’re interested in becoming a client, you’ll need to navigate to the company’s “Find a Professional” page. Once there, you’ll be able to type in your location and find a firm near you to consider.

Methodology

This review is based on publicly available information directly from LPL Financial’s website and the SEC. Neither the firm nor its representatives have any say on what we’ve included on this page.

Frequently Asked Questions

Is LPL Financial a fiduciary?

As a result of it being an RIA with the SEC, LPL Financial and its IARs must maintain a fiduciary standard when working with clients in an advisory capacity. In other words, it must prioritize your best interest as a client and tell you if any conflicts of interest could affect your relationship.

Is LPL a good financial advisor?

LPL Financial is a large company that serves millions of clients of varying account values. It also offers plenty of options that you’d expect from a firm of its size, including various programs for portfolio management and a financial planning option with no minimum.

The company has also earned a collection of accolades over recent years from reputable organizations. For example, in 2022, the Human Rights Campaign (HRC) Foundation listed it as a top place to work for LGBTQ+ equality. It has also received multiple awards related to innovation in the industry.

What is the minimum amount for LPL Financial?

LPL’s minimums are accessible to a wide range of clients, with the lowest being an account value of $1,000 to $10,000 for some of its products. The firm doesn’t require a certain amount of assets for its financial planning or consultation services.