After spending more than a decade in partnership with Boston-based LPL Financial, Independent Financial Partners (IFP) officially terminated their contract last week to start an independent hybrid RIA.

The transition to relaunch IFP as an RIA and broker-dealer has been a year in the making, said Bill Hamm, CEO of the Tampa-based firm.

“Everyone at IFP is excited that this day is finally here,” Hamm said last week in a press release. “We’ve overcome so many obstacles to get to this point, and to be able to finally start moving accounts and getting our advisors transitioned is a relief. We’re nearing the finish line of true independence, and I can’t wait to cross it.”

With more than 200 advisors and thousands of client accounts, IFP faces the daunting task of repapering accounts and transferring assets to Pershing, its  clearing firm and custodian.

“My dad always told me that nothing good ever comes easy,” he told Financial Advisor in a May 24^th telephone interview. 

Hamm said that IFP joined the LPL platform in 2008, after LPL acquired Mutual Service Corporation, which formerly served as the firm's broker-dealer.

“At that time, IFP had about 100 advisors,” Hamm said. “Once we got on the LPL platform, we grew to 480 advisors. Our group became their second-biggest group. For the first four or five years, it was great; they were very supportive, and then they got into the hybrid business. There were 90 firms like (us).”

Hamm said that the economics for hybrids had changed at LPL as a result of a new bonus structure for recruiting them. The margin differential between firms that went directly to the LPL platform and those that joined it through an intermediary affected the amount of profit paid directly to their advisors, he said.

Hamm attributed the bonus structure change to LPL’s decision to go public.

“They have a fiduciary responsibility to their shareholders,” he said. “Bottom line, because of their change, we decided to control our own destinies.”

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.