Adopting models for investing will also allow advisors to be “more dynamic,” said Pettman, because it will be easier to act quickly and effectively during market volatility via block trading across all of an advisor’s models.
With LPL, advisors can take the model portfolios concept a step farther with an “Advisor Sleeve” capability, said Pettman.
“Not only is it easier to build models and run a models-based practice… but you’re also outsourcing all your trading to LPL,” he said. “Trading is one of those operational nuances that really doesn’t differentiate you in the market, we’ve seen advisors take those time savings and allocate to things that add more value and differentiation.”
LPL has expanded its model portfolio offering by increasing the number of models an advisor can run from 10 to 15 and launching “Firm Sleeve,” a capability that accommodates all advisors within an office or firm in signing up for one set of model portfolios. In the future, the company plans on adding separately managed accounts to its model offering and simplifying its platform fee schedule.