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 24th 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.”