Coronacrash Update: LPL Financial’s Rich Steinmeier & Tony Sirianni

Rich Steinmeier, Managing Director & Divisional President at LPL Financial

AdvisorHub’s Publisher & CEO — Tony Sirianni — asked executives from top firms their opinions on the dual management of the Coronavirus and market meltdown crises. Read how leadership is managing one of the most unique challenges we have faced as a financial community. 

Here is how Rich Steinmeier, Managing Director & Divisional President at LPL Financial responded.

The last few weeks have been unprecedented and unexpected, a perfect storm if you will, of management challenges both on the employee and client level. You have had to deal with employee safety issues that no CEO has training for, and a directly correlated market crash.

What have you implemented at your firm to address this dual threat? 

We are indeed in unpreceded times. There are dramatic changes taking place to the way we do business and the way we conduct our personal lives. As a firm of our size, we have been fortunate in that we have access to ample resources and expertise and we are still nimble enough to be able to adapt quickly across all areas of our business. We have teams with specialized areas of expertise across business operations, in areas like Human Capital, Operations and Communications, to name a few, that made us well positioned to skillfully adjust policies and procedures as needed.

Knowing we play a critical role to our advisors and their clients, we have been focused on the health and wellbeing of our employees in our approach to being able to safely and effectively support our clients. We cut down visitor access to our buildings and restricted business travel. That grew to increasing our number of work from home employees, which at this moment is more than 80 percent of our workforce. We purchased more than 1,000 laptops to be able to provide to employees so that they could work remotely, and we stood up a dedicated team to help them get set up at home during this transition. In the office, we are using hospital-level professional cleaning and set up self-service sanitation stations so that employees can clean their work area anytime. And with fewer people in the office, we’ve spread out assigned workstations, putting social distancing into effect. 

That gives you a sense of the employee layer of our coronavirus efforts. But we also put into place resources and support for our advisors, who are not only working overtime managing the market volatility, but they are business owners, too. So we are making sure they have access to templates and best practices and the most up to date information necessary to be successful as business owners as well as financial advisors. 

How about the continuing market volatility? What are you telling your advisors to do and what are you hearing from clients?

Right now, advisors are overwhelmed. They are in high demand with their clients. They are business owners in the midst of major disruption. And they are people, with families and friends who they care about and want to keep safe and healthy. We are focused on being as helpful as we can so they can stay focused where it matters most.

Service is never more an asset than during a time like this. We have ramped our support so that advisors can do what they need to do, when they need to do it, with the best resources and support at hand to do it well. We just recently extended service hours so they can call later in the evening and on weekends, since we know they are juggling a lot, but have a very critical role to play for their clients. That enhanced support extends across all business models. All of our clients have access to dedicated service teams, whether you leverage LPL for your custodial, advisory or brokerage support. We remain committed to each advisor and their individual business needs through any disruption.

We have also ramped the amount of market commentary and end-investor communication to help advisors maintain a relevant perspective on the markets. And, like I mentioned, we have—and continue to—provide relevant business continuity resources to advisors to be able to act as they deem necessary for their business. We have capital available to advisors to help them maintain or improve their businesses. But overall, we are committed to helping them with the overwhelming amount of demands and challenges they are facing. 

What about the economy longer term? Where do you think we will be in 6 months, and how can advisors and their clients take advantage of that long term direction?

LPL’s research team has been instrumental during this time. They have been producing an abundance of market commentary and client resources so our advisors are equipped in real time to be able to navigate through this tumultuous time. 

A stage presentation from our managing director and Chief Information Officer Burt White has been recirculating on social right now, and for good reason. Burt makes the point that the role of the advisor is indeed the best weapon in a time like this. It is hard to think about the future when you are stuck in crisis mode, watching the bottom fall out of the markets and seeing your portfolios shrink. But it is important to stay focused and not overreact. That is where a financial advisor is integral to a client, by helping them stay focused on the plan they developed together and being an expert to remain neutral and keep the client focused on the long-term goals. 

What about our business? What do you think the long-term impact of this dual crisis will be on the advisor business model?

The demand for advice is not going away, and, if anything, a crisis like this just reinforces to clients the value that an advisor plays in support of their long-term financial health. While clients may cling tighter to advisors, I think we will see advisors considering their allegiances. In times of disruption, we find that advisors are seeking quality and stability. Advisors start questioning their partnerships. Do I have a partner that is resilient in times of crisis? Is their infrastructure equipped to deal with the volume of support I need and are they able to support a remote workforce? Are they increasing support to help me during this time, or are they considering layoffs? Are they still focused on continuous improvement, or did they divert all capital and resources to adapt for the short term, leaving us in 6 months, a year, no better off than today?

Similar to what we experienced during the DOL landscape, we might also see more advisors who were already thinking about retiring deciding that it is time to put a plan in place. That could also drive up acquisitions as well. Through the disruption, our business has not slowed materially. We have been talking to just as many advisors as we did a month ago. Advisors are still choosing to transition. They want a partner with stability and the financial strength to be able to weather the hard times and can keep their commitment to clients. 

So these things tend to bring out the good and the bad in people. What has most encouraged you, what have you seen that’s reaffirmed your faith in our community and how it’s handling these difficult times?

We are certainly in unpreceded times, and it is during these times that you test your principles and character. I have seen the leaders and employees in this firm push and stay committed in a way that I might have hoped, but saw happen through every step of the way. We have more than 80 percent of our employees working from home now under the most challenging environments, including schools and daycare facilities closed. But our work continues. They are nobly shifting priorities all day, teaching or caring for their kids, then working early in the morning or late at night. They realize that our clients are facing terribly volatile markets and we must be there to support them. It is really admirable. People’s grit and resilience are shining through.  This is a terrible situation with so much uncertainty, but grit and resilience can go a long way.