Hamm said that the parting of the two companies was amicable. The two firms signed a memorandum of understanding, “and that was it,” Hamm said.
“Ultimately, this (move) will not only be more profitable for our advisors, but also for our clients,” he said.
Prior to announcing that IFP would be leaving LPL, Hamm’s hybrid RIA and OSJ supported 460 producing financial advisors nationwide. His relaunched company will be starting out with about half that number.
“When we decided to go down this path, I told our advisors that we weren’t going to … give them (just) 30 to 60 days to make a decision,” Hamm said. “We told our advisors that they’d have a year to do their due diligence.”
Hamm said that he knew many advisors would either choose to remain at LPL or find another firm more compatible with their culture. He said he also knew that LPL's OSJs might poach and recruit IFP advisors.
Hamm, a financial advisor for 34 years, said that the new IFP model calls for reduced administrative fees on advisory platforms. In addition, advisors will have the ability to text their clients, which Hamm said many other broker-dealers do not permit. As part owners in the company, IFP advisors will also have a say in how it is run.
“I feel very confident that by the end of 2019, we’ll grow from the current 220 advisors to about 300 advisors,” Hamm said. “We’re already 80 percent fee-based and 20 percent brokerage. I think the advisory (ratio) will continue to increase and the brokerage (ratio) will continue to decrease over time.”
A spokesperson for LPL Financial did not immediately respond for comment.