What’s next for LPL Financial; advisors using non-AUM fee structures; the generational shift on retirement income

INDUSTRY NEWS: Under its freshly ousted CEO, LPL Financial had plotted one of the most rapid growth paths ever seen in the wealth management industry. Now, with chief executive Dan Arnold being shown the door following misconduct allegations, the question becomes: Can LPL keep it up??

Philip Waxelbaum , an industry recruiter who works with LPL and is the founder of Masada Consulting, said LPL, like every successful company, must some day confront the difficulties involved in a CEO transition. The sudden announcement of Arnold's departure was certainly more abrupt than is typical, but it raises many of the same issues.?

Read: With Arnold out as CEO, can LPL keep up its growth trajectory?

PRACTICE MANAGEMENT: Alternatives to AUM-based fees — such as subscriptions, fixed fees, retainers or performance costs —?are rising as RIA owners design their firms based on the models they believe fit their clients' best interest and their preferred business structure, though asset-based expenses remain the most common client charges.?

More advisors are finding value in other types of fees as they seek compensation reflecting the time spent onboarding new clients. A non-AUM approach to fees may also help advisors increase their addressable client market, meet the needs of high net worth investors seeking different kinds of charges or find the appropriate rates for specialized services, according to Christine Gaze, CFP(R), CIMA(R) , founder of practice management consulting firm Purpose Consulting Group, who moderated a panel on the topic at the recent Investments & Wealth Institute Strategy Forum.

Read: More financial advisors are using non-AUM fees. Here's how

RETIREMENT PLANNING: Older generations still view Social Security as a viable source of retirement income. But younger workers aren't confident it will be there for them when they finish their careers. According to research firm Cerulli Associates ' latest U.S. Retirement Edition study, more than half (56%) of retired 401(k) participants say Social Security is their primary source of income, while only 7% of current retirees rely on personal retirement accounts as their primary source of income.

Meanwhile, 58% of millennial active 401(k) participants expect personal retirement accounts to be their primary post-career income source, while only 6% say Social Security. By contrast, 39% of Generation X active 401(k) participants say their primary source of retirement income will be personal retirement accounts, and 30% say it will be Social Security. Advisors say they've seen similar generational disparities in their own practices.

Read: Skeptical on Social Security, younger workers shift to personal retirement accounts

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