LPL to Offer Proprietary CRM Software to Brokers
LPL Financial has been testing proprietary customer relationship management software with a small group of advisers, and plans to integrate it into its upgraded broker workstation early next year.
Plans for the “Microsoft-powered” CRM product, which will catch LPL up with some competitors, were disclosed to its almost 16,200 independent contractor advisors on Monday along with documents elaborating on the firm’s $28 million purchase of AdvisoryWorld, a proposal-generation firm.
LPL will integrate AdvisoryWorld software into the new CRM system through LPL’s ClientWorks Connected broker workstation in early 2019 at no cost to brokers, it said in a Q&A document reviewed by AdvisorHub. The publicly traded firm delayed full-scale introduction of ClientWorks this year after brokers reported a slew of problems in migrating from its BranchNet system, including some temporary problems in executing trade orders.
The new technology announcements are aimed at ending a finger-pointing game between firm executives and their advisor customers. LPL has bemoaned old-school advisors’ failure to grow organically by using tools such as CRM software, while brokers have groused about the quality of the firm’s technology—including its lack until now of proprietary CRM software—and the fees they are charged.
Acknowledging the tech development issues, LPL spent $209 million during the third quarter on “general and administrative” expenses, a 17% jump from the previous year that it attributed primarily to increased technology and service spending. On Tuesday, LPL updated its 2019 expense projections by more than 3% to a range of $845 million to $870 million.
In a document titled “Meet your new eco-system, ClientWorks Connected,” LPL told brokers they will be able to manage prospect and client information “seamlessly in one location” once the new CRM software is integrated onto the ClientWorks platform by early 2019.
LPL will let brokers continue to use a firm-adapted version of the popular Salesforce cloud-based CRM software through its platform and will also be integrating a version of Redtail CRM software on ClientWorks in 2019, it said. The memo did not discuss whether it will charge brokers, who spend about $1 billion annually on “front-office” services to run their small businesses, for its proprietary software.
“We are investing in our technology and focused on enhancements to the capabilities and suite of tools available within ClientWorks,” Lauren Hoyt-Williams wrote in an email when questioned about the CRM pilot last month. “We don’t have more details to share at this time.”
However, LPL is offering the AdvisoryWorld client-proposal tools gratis and existing customer data will be integrated into the tool via ClientWorks, LPL said in an Advisor Q&A on the acquisition of the California-based tech firm. Brokers who have been paying independently for AdvisoryWorld software will be reimbursed for any costs billed following the December 3 acquisition date, it said.
Though LPL is promoting its proprietary tools to its affiliated brokers, they may be able to receive discounted pricing on other “customer proposal” products through its Vendor Affinity program, it said in the Q&A.
LPL has no other acquisitions to announce as part of technology and growth strategy, but “we continually explore opportunities to serve LPL advisors and use our capital to your advantage,” it said in the Q&A.