A New Hand on the Tiller at LPL

LPL also pulled in 525 new reps last year, which Casady characterized as "significant growth." LPL started 2002 with 3,900 reps and ended the year with around 4,400. Most of the new recruits came from independent broker/dealers that sold out to larger financial services firms, as well as from the big Wall Street firms, he says. Reps are leaving their B/Ds that have been acquired by bigger firms, he says, because the firms "aren't providing the service or technology investment they should. So reps feel their business is slipping as a result." As for why brokers would abandon Wall Street firms, Casady says some of the firms' brands have been tarnished. "Brands that used to help support the rep's business isn't there anymore."

Nearly four years into a bear market, Casady says some independent B/Ds are "really investing in their business and are able to handle all the new recordkeeping requirements from the government. But there are those that are cutting back services and cutting back on technology." LPL's strategy, he says, "has been to continue to build very aggressively our technology advantage, and it's paying off. We're seeing it in recruiting and growth in the business."

New technology initiatives include the LPL Organizer, which will be released to reps later this year. The technology "will allow us to automate the notification process to the reps of any exceptions," Casady says. For instance, "if there's a missing piece of paperwork or a corporate action that needs a decision, in the past, you either had to call or fax the rep, but the new technology will act as an early warning device," he says. "What that means is that the rep can sign on every day and get a notice about all the things that are outstanding and then they can work on them online." This is just one example of technology that LPL will be offering to save reps time and allow them "to focus on building their business."