LPL Financial Reports Record New Assets, And Increased Prom Note Liability

Posted on April 4th, 2019 at 4:51 PM
LPL Financial Reports Record New Assets, And Increased Prom Note Liability

From the Desk of Jim Eccleston at Eccleston Law LLC:

In 2018, LPL Financial reported a record amount of assets that the firm recruited to its brokerage and advisory practices. The firm received $233.3 million of assets in 2018, a 46% increase from the year before.

However, the increase in the firm’s recruiting efforts came with a cost to LPL because the independent broker-dealer offered $233.3 million in recruiting loans to transitioning advisors, a 46% increase from 2017.

The recruiting bonuses offered by LPL typically are in the form of forgivable loans, otherwise known as “prom notes.” The LPL loans typically are forgiven over a three-to-eight- year period if the advisor remains licensed with their firm.

The loans offered by LPL in 2018 provide 50 basis points on assets transferred to LPL, which is a potentially lucrative deal for advisors. As a reference, most firms offer only 25 to 35 basis points on assets transferred by transitioning advisors.

The attorneys at Eccleston Law assist advisors in planning their transition, negotiating their transition and employment agreements, and defending them when their former firms file litigation and arbitration.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, lpl financial, lpl loans, loans, prom note

Return to Archive

TESTIMONIALS

Previous
Next

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

February 22, 2024
Key Considerations for Advisors When Assessing the Financial Soundness of Annuities

While rating agencies like Fitch and S&P Global Ratings generally highlight the strength of annuity issuers, advisors still should scrutinize certain factors in their assessment process.

February 21, 2024
SEC Alleges Fraud Against Morgan Stanley and Former Executive in Block Trading Business

As reported by the Wall Street Journal, the Securities and Exchange Commission (SEC) has charged Morgan Stanley & Co. LLC and its former head of equity syndicate desk, Pawan Passi, with a multi-year fraud involving the disclosure of confidential information related to block trades.

February 20, 2024
Challenges Persist: Firms Struggle to Comply with Regulation Best Interest

FINRA's annual report for 2024 reveals a concerning trend among broker-dealers, with numerous instances of violations of Regulation Best Interest (Reg BI).