LPL Financial’s legal issues, Wells Fargo’s advisory changes

In October’s roundup of pressing issues in the wealth management space, learn about the CFP Board’s problematic ad campaign, LPL Financial’s ongoing recruiting battles against rival Ameriprise and more.

Click here to read September’s compilation of top news stories.

Not just AUM: Edward Jones accepts financial planning for a flat fee

Article by Dan Shaw

Edward Jones is becoming a pioneer among large wealth managers with a business model that allows its advisers to provide a comprehensive financial plan for a fixed annual fee.

The company based in St. Louis announced last month that about 600 of its advisers will be able to start offering certain clients complete financial plans for $3,600 a year. The services will go beyond the usual investment recommendations paid for by asset management fees and extend to wealth and tax planning, wealth transfers, risk protection and advice on general life goals.

“For the first time, Edward Jones financial advisors will be able to provide comprehensive financial planning and be compensated accordingly for their time and effort in building and maintaining a financial plan.” Lena Haas saidhead of advice and wealth management solutions at Edward Jones.

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Schwab, crypto, alleged fraud and an elderly couple’s $18.5 million loss

Article by Dan Shaw

Charles Schwab may have a big age fraud problem.

For the third time in less than two months, Schwab and its affiliates have been accused of doing virtually nothing to prevent fraudsters from draining its customers’ accounts of their retirement savings. The latest case, filed Oct. 23 in federal court in Northern California, alleges Schwab stood by as bad actors directed an elderly Los Angeles County couple to withdraw nearly $30 million from their accounts and transfer a large portion of it to a cryptocurrency exchange. by Bank of America.

Ultimately, $18.5 million of that was converted to crypto and sent to the scammers, making it likely unrecoverable, according to the lawsuit.

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New CFP Board ads prompt backlash from advisers

Article by Rob Burgess

A series of CFP Board ads promoting the financial advising profession to students has drawn swift backlash from industry insiders who say it gives false expectations to those considering the career while tarnishing the reputations of those already in it.

“Becoming a financial advisor gives you the flexibility to manage your own time,” reads one such ad, which appeared on Facebook. The ads show the young people alternately sleeping on a couch, enjoying a bubble bath, closing their eyes on a massage table, and reading in a hammock and on the couch, among other leisurely poses.

CFP Council President Matthew Boersen said the nonprofit spent “in the six figures” on its “Probably the perfect job” digital campaign, “which is typical for campaigns of this nature.”

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Wells Fargo sets targets for small producers in 2025

Article by Dan Shaw

Wells Fargo plans to turn up the heat a bit on advisors with low manufacturing income or small household accounts while making a few other changes compensation policies.

In a note published on October 16, the San Francisco-based network also outlined plans to make it a little easier for top producer advisers to receive additional compensation awards for meeting annual net new asset goals. At the same time, Wells’ memo calls for core parts of the company’s current payments network to be left intact for the fourth consecutive year.

The only major change will be for advisors who have eight or more years of experience and now bring in less than $300,000 in annual revenue for the firm. Wealth managers in that category can now keep 15% of the income they produce below $13,500 in a month and 30% on any income above that. But if they manage to meet or exceed that $300,000 threshold, those payout rates increase to 22% and 50%, respectively—giving advisors a strong incentive to increase their revenue production.

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LPL fires CEO for failing to maintain a respectful workplace

Article by Financial planning staff

LPL Financial CEO Dan Arnold has lost his job for failing to maintain a respectful workplace, the company announced last month.

Arnold, who held first place at independent broker-dealer since 2017, he was cleared by a special committee of firm directors following an investigation by an outside law firm. The firm found that statements Arnold made to employees violated the firm’s code of conduct.

“LPL’s Code of Conduct requires every employee, regardless of title, to promote a professional and supportive workplace and to show respect for each other, stakeholders and the wider community,” said James Putnam, chairman of the board of LPL, in a statement. . — Mr. Arnold has not fulfilled his obligations.

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More financial advisors use non-AUM commissions. Here’s how.

Article by Tobias Salinger

Securities regulators often ask questions to registered investment consulting firms that use alternative tax models to the traditional 1% of the industry’s assets under management. So says financial planner Carolyn McClanahan, founder of the Jacksonville, Fla.-based registered investment advisory firm Life Planning Partnerswas well prepared for its first audits by state regulators and the Securities and Exchange Commission, she recalled.

McClanahan and her team keep records documenting their services, which is helpful around exam time. A state auditor seemed particularly impressed after her first exam years ago, she noted on a panel at Strategy forum conference held last month in Chicago by the professional networking and development organization, Investments & Wealth Institute.

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LPL calls Ameriprise recruitment suit a ‘public relations helmet’

Article by Dan Shaw

LPL Financial is rejecting rival Ameriprise’s wholesale legal accusation over its recruiting methods, calling an ongoing legal challenge “a public relations stunt disguised as a lawsuit.”

LPL filed a motion in federal court in San Diego on Oct. 17 opposing Ameriprise’s earlier request to prior order trying to end some of its recruitment practices. Ameriprise alleged that LPL’s recruiting methods reveal a “widespread pattern and practice of harvesting and misappropriating Ameriprise customers’ private and confidential information and trade secrets.”

In its response later that day, LPL claimed that Ameriprise’s allegations is based on a meritless and “cynical” misinterpretation of how recruiting transactions between independent broker-dealers are typically conducted. It also warns that victory for Ameriprise could have a chilling effect on the long-cherished ability of independent advisers to switch firms.

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The CFP Board updates ads based on feedback from advisors

Article by Rob Burgess

After he resisted harsh reaction from the councilorsCFP Council has renewed its “Quite Possible, Perfect Workplace” digital advertising campaign.

Many in the industry reacted badly to the campaign, saying it gave false expectations to those considering the career, while tarnishing the reputations of those already involved in it. In response to the ads, some advisors co-opted the theme of the CFP Board ads and posted their thoughts with the hashtag #quitepossiblytheperfectjob on social media.

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Here are the election results financial advisors are hoping for

Article by Rob Burgess

Two weeks before Election Day, financial advisers analyzed which federal candidates and parties they hoped would win.

Financial Planning surveyed 213 respondents for this Electoral survey from autumn 2024 and asked what outcome of the election would be best for the entire country. And while there were some deviations, the overall picture remained roughly the same between the different races.

For the presidency, 54% chose former Republican President Donald Trump over Democratic Vice President Kamala Harris, who got 38%.

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Ameriprise: LPL stole private data on 4,500 former customers

Article by Dan Shaw

For nearly four years, LPL helped at least 30 former Ameriprise advisers use an internal system to upload information for thousands of their former clients before the practice was phased out in early 2022.

That’s according to an LPL executive’s testimony last month in her firm’s recruiting dispute with its independent broker-dealer rival Ameriprise. In a legal statement filed Oct. 24 in federal court for the Southern District of California, LPL’s vice president of business transitions, Candi Sinquimani, provided a list of 30 advisers who used what’s known at LPL as a “bulk-loading tool” to to import customer information for more than 4,500 customers they had worked with while at Ameriprise.

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