A group of advisors affiliated with LPL Financial has launched an RIA that will share all profits with its partnering advisors.
Good Life Advisor Systems formed the "mutual RIA" to "distribute the proceeds of our model, after expense, to advisors, not only to principals," Conor Delaney, a co-founder of the firm, said.
"A principal or two principals might own a company that includes, say, 400 advisors, and the [bulk of the] profits would go to these two owners," explained Delaney. "In our model, the profits would be distributed to the advisors. It's very unique and not done often in the industry."
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Delaney formed Good Life Advisor Systems, based in Wyomissing, Pennsylvania, with Courtnie Nein. Both worked as advisors for Waddell & Reed before breaking away in 2012.
They've since opened nine offices in seven states and recruited about 20 reps from Ameriprise, Wells Fargo, Morgan Stanley, Edward Jones, Mass Mutual, MetLife, Wadddell & Reed and some regional broker-dealers.
"We plan to double our number of offices by next year to 18," Delaney said. "It's hard to quantify precisely, but that could mean we'd have 50 reps. We'd like to have $1 billion in assets by the end of Q1 '15 and around $2 billion by year-end 2015."
The new model, he says, is ideal for independent broker-dealer LPL Financial, which wants to add advisors whose "eyes glaze over" when there's a discussion about compliance, renting and managing an office, technology and so on.
"We can be their silver bullet," said Delaney, because Good Life can provide the independent or newly independent reps with turnkey offices, transition support and ongoing administrative systems.
The average payout across the broker-dealer industry, he adds, is about 30 percent.
"If we can move them to a more efficient platform and lower their costs while doubling their revenue, it's a win for everyone — the broker-dealer, client and advisor," he said.
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Janet Levaux
Editor-in-Chief Janet Levaux has covered the financial markets since 1991, with a focus on financial advisors since 2005. After graduating from Yale and the Johns Hopkins School of Advanced International Studies (SAIS), where she studied global economics, Janet worked as a freelance financial and business writer in Japan, and then as a reporter and editor for Investor's Business Daily and the Bay Area News Group in California. She earned an MBA in 2007 and since then has helped lead key ThinkAdvisor projects like its Neal-Award winning reporting on Ken Fisher, Luminaries awards program and Women in Wealth newsletter.
