Q. What are you doing to limit the disruption to my business?

A. The transition experience we’ve designed for you is meant to simplify the transition and reduce the effort to move your clients and your practice. This includes a FINRA-approved tape-to-tape and block transfer account conversion process exclusively available between LPL and Waddell & Reed in this transaction. By leveraging this process, we are able to do much of the work of account conversion on your behalf, you will not experience disruption in your ability to receive trail commissions on many of your accounts, and your clients are opted into the transfer through negative consent.

Q. Can you explain how this transition process with LPL is different than what another broker-dealer can provide?

A. At any other broker-dealer, you’ll have to obtain positive consent from every client and manually move their accounts. This means contacting each client, having them fill out and sign forms, submitting forms to the new broker-dealer, and in the case of direct business, changing the broker-dealer of record at the sponsor firm. And importantly, you won’t earn revenue on an account until its paperwork is complete.

Q. When and how can I start transitioning my business?

A. Once you sign and return your offer letter to your business development consultant, your conversion consultant will reach out to discuss next steps and guide you as your begin your transition. The sooner we receive your offer letter, the sooner we can get your transition started and guide you on what the process will look like along the way.

Q. Who do I contact with specific questions regarding my offer letter?

A. Please contact your business development consultant.

Q. Who do I contact with specific questions regarding my transition?

A. Your conversion consultant will act as your point of contact for your transition to LPL.

Q. If I join LPL, when will my licenses transfer?

A. Currently, license transfer is estimated to occur between May 15 and July 15, 2021. License transfer is subject to regulatory approval, which is underway. Once we know the exact date, we’ll communicate with you directly.

Q. What paperwork must be completed to transfer my registration to LPL?

A. You will need to sign your offer letter, LPL’s representative agreement, provide information to complete your Advisor Public Disclosure (ADV) part 2B, sign LPL’s direct deposit setup form for your commissions, and sign LPL’s technology subscription agreements if you choose to sign up for optional technology available through LPL.

Q. Will I need to complete a Form U4 and get fingerprinted?

A. No. As part of the conversion process, we’ll leverage a mass license transfer with FINRA and the states for your securities and advisory registrations. This eliminates the need to complete a new form U4 or get fingerprinted. You won’t be charged any state registration fees through this process either, which will save you money.

Q. Will nonlicensed assistants need to complete any paperwork to become associated with LPL?

A. Yes. Your conversion consultant will provide you with the necessary forms closer to your transition date.

Q. How and when can I communicate this change to my clients?

A. Your clients will not experience a change in the immediate future and their accounts will not convert until after the acquisition closes in May. However, you can start communicating the proposed change to your clients immediately. You’re encouraged to leverage the client talking points we developed for you. 

Q. Will LPL communicate with my clients directly?

A. Yes. Your clients will begin to receive official communications regarding this change in March. These communications are required by regulators to inform your clients about the proposed conversion of your accounts from Waddell & Reed to LPL. As part of this communication process, your clients will receive negative consent letters in the mail or through email to provide proper disclosures about the change based on regulatory standards.

Q. Will I get a new Rep ID once I register with LPL?

A. Yes, you’ll receive one or multiple new LPL Rep IDs. As part of the conversion process, LPL will map your current Rep IDs and create your new ones for you based on what you previously used for your client accounts. Note: Your new Rep ID will also be updated with product sponsors.

Q. Do I need to report outside business activities I’m currently involved in?

A. We will first review your outside business activities already disclosed on your CRD to limit the amount of information we need to complete the OBA review process. There will also be an opportunity to disclose any new activities prior to your license transfer date.

Q. What is a tape-to-tape conversion?

A. Your advisory and brokerage accounts with Pershing will move to LPL through an electronic conversion of the accounts and assets between clearing firms, known as a tape-to-tape process. Taking place over a series of a few days, this allows us to receive large volumes of account-level data and holdings in a highly automated manner. This eliminates the need for transfer paperwork, current statements, or using the traditional ACAT process to move accounts and assets between clearing firms. It also allows for instructions such as periodics, systematics, and on-demand ACH to convert to LPL.

Through our current conversion process, you may need to obtain client on new account documents for only about 30% of your advisory and brokerage accounts, limiting the time and effort required for both you and your clients. During a normal transfer process, you would need to obtain all new account documents and have clients sign transfer forms to complete the transfer of the assets. This would be done through either the ACAT process, which takes three to five business days to complete, or a non-ACAT, which can take typically 30 days for assets in an account to transfer to a new firm. Our conversion process will also allow for the ACH instructions and systematics on your transferring accounts to remain intact without client signatures or forms, which is not possible during a normal transfer process.

Q. What is a block transfer?

A. Your unaffiliated direct way accounts, known as direct business at LPL, will move using a block transfer process. This process uses electronic file sharing between LPL and the direct sponsors and carriers to establish your direct book of business within our systems. This will move all accounts under your Waddell & Reed Rep IDs to your LPL Rep IDs at the sponsors without the need to submit individual paperwork to each sponsor. This automated process is more efficient than the traditional manual process, authorizing sponsors and carriers to change the broker-dealer of record on directly held positions for your book of business.

Q. Will I have to repaper my advisory accounts?

A. We currently estimate that only about 30% of advisory accounts will need to be repapered, and you should be aware that 100% of advisory accounts would need to be repapered at other broker-dealers. For the 30% of accounts that do need to be repapered, the good news is that we’ll be able to pull in most of the data to prepopulate your account forms.

Please note: For the 70% of advisory accounts that come over directly, you won’t need an application, signature, or account transfer form. That means your revenue continues for those without disruption. At any other firm, you will need to have the account in good order before you earn revenue on that account.

Q. What will happen with the Ivy relationship?

A. We understand that your access to the Ivy portfolio managers is highly valued. The Delaware Funds by Macquarie team is enthusiastic about how they plan to support you and your practice as you transition to LPL. In fact, they have assured us that you’ll have the same access to the Ivy portfolio managers and Delaware Funds investment team through the transition and beyond. They also have dedicated client resources to specifically support you and ensure the same high level of personal service is maintained.

Q. How will Ivy Funds transition?

A. Similar to the tape-to-tape conversion for Pershing advisory and brokerage accounts, we’ll do a mass conversion of all of your direct to Ivy Fund accounts at SS&C using negative consent. No client signatures needed.

Q. How does the seven year forgivable note work from a tax perspective?

A. It is taxed equally per year for seven years. For example, if you receive it mid-2021, in mid-2022, 1/7 of it will be forgiven and that portion will be taxed in 2022. This will continue for a seven-year period.

Q. When will LPL’s transition assistance be paid and is it paid all at one time?

A. Transition assistance will most likely be paid after the deal closes, which is currently targeted for sometime in May. It is paid in a lump sum.

Q. If I have a succession plan in place at Waddell & Reed, will that remain in place when I move to LPL?

A. We’ll need to review the plan, and it’ll either move as is, or may need to be modified to fit our policies. During the transition period, we’ll set up a consultation with our Succession Planning team to review your current agreement and discuss any solutions that may be a better fit for you and your business needs.

Q. Is LPL honoring existing buyout/book acquisitions that were previously in place?

A. During the transition period, we’ll set up a consultation with our Succession Planning team to review the agreements on file to see if your buyout/book aquisition can move as is or if it needs to be modified to fit our policies.

Q. What happens to my Waddell & Reed forgivable loan?

A. Your current forgivable loan—whether for production, growth, or real estate—will transfer and be assumed under your current terms by LPL once the deal closes.

Q. Does LPL offer health insurance?

A. We do not currently offer health insurance. However, we’ve partnered with Paychex to ensure that LPL advisors have access to top-tier healthcare offerings, comprehensive dental and vision insurance, and more. Through this partnership, you can receive up to 25% on payroll bundles, special pricing on benefits, and free human resources and benefits consultation.

Q. Will LPL hire Waddell & Reed employees?

A. Yes. We plan to retain a number of Waddell & Reed employees to fill key roles, particularly those related to the integration and onboarding of you and your peers. We have a number of positions open today and many more that we anticipate opening soon as a result of this transaction. We also plan to add a new operations center in Kansas City.

Q. If my advertising, sales, and marketing material was already approved by my current firm, do I need to resubmit it to LPL for review?

A. You’ll need to update your required disclosures on your advertising/marketing material. We’ll provide the required disclosure for you to make changes and you’ll be able to submit the final versions with the updated disclosure to us for recordkeeping. Your conversion consultant will assist in making the submission easy.

Q. Am I able to continue to use my MyRepChat number and keep my contacts and conversation history?

A. We also use MyRepChat and will work with their firm to keep your existing number, contacts, and conversation history. MyRepChat is also a complimentary offering at LPL.

Q. What will happen with my website?

A. We’re excited to let you know that FMG is an approved website vendor. This will make the process of reviewing and approving your current website seamless since we can work directly with FMG for the bulk of the effort. If your website is not hosted/provided through FMG today, your conversion consultant will provide you with the new disclosures you’ll need to update your site and provide any additional steps.

Q. Will I be able to continue using my logo and tagline?

A. As long as your existing logo and tagline has met all requirements, it will be approved for use.

Q. Will I be able to use the Waddell & Reed brand?

A. As part of this transaction, we acquired the Waddell & Reed brand. Therefore, we’re excited to announce that you can continue to leverage that name/brand. This is something you would not be able to do at any other broker-dealers.

Q. Can I use social media at LPL, and what happens to any existing social media I have?

A. We allow LinkedIn, Facebook, and Twitter for business use. We’ll work with your current social media monitoring vendor, Proofpoint, to determine the most simplistic way to convert your existing approved social media profile to LPL. If you’re not currently using social media but want to, contact your conversion consultant to find out how to get started.

Q. When will I need new stationery and business cards?

A. You’ll want you have new stationery and business cards with the updated LPL disclosures on the day your licenses transfer to LPL.

Q. Will I be required to use certain technology platforms?

A. ClientWorks, our core advisor workstation, will become your primary technology platform. This technology solution offers integration and compatibility with third-party technology providers. You’ll receive more information on our technology from your business development and conversion consultants, or you can register for one of our technology sessions.  

Q. What technology platforms are available at LPL?

A. We offer a variety of technology options to fit your needs. Our core technology suite is an integrated solution with straight-through processing workflows that eliminate the need for multiple portals or access points.

Q. Does LPL offer performance reporting or financial planning software?

A. Yes, we offer both performance reporting and financial planning software to match what you’re currently using today.

Q. What will happen to my email when I join LPL?

A. You’ll be issued an lpl.com email address, and when your licenses transfer to LPL, we’ll help move your existing Outlook emails, contacts, calendars, and folders. We’ll also maintain access to the existing email archive at Waddell & Reed.

Q. What customer relationship management (CRM) tools will I be able to use?

A. You’ll have the ability to choose from a variety of solutions. We offer an in-house, no-cost solution called ClientWorks CRM (powered by MS Dynamics). You also have the following approved vendors to choose from: Redtail and Salesforce which offer an integration with ClientWorks and a discount for LPL advisors, and WealthBox, which also offers discounts for LPL advisors.

Unfortunately, SmartOffice is not approved at LPL, so you’ll need to move to Redtail, Salesforce, or Wealthbox.

Q. Will my existing CRM information transfer over?

A. If you use Redtail, your existing database will remain intact after you join LPL. Redtail will update your database to allow for integration with ClientWorks. If you use Salesforce or Wealthbox, your existing database will remain intact if you continue to subscribe directly.

Q. Are there any training requirements that need to be completed prior to my license transferring to LPL?

A. Yes, your conversion consultant will provide the required training courses and access to the courses along with completion guidelines as we get closer to your transition date.

Q. Does LPL offer any enhanced training sessions or curriculum for administrative assistants and support staff?

A. We’ll provide a four-part training series that will kick off in January to help you and your staff feel comfortable about the conversion process and what to expect.

Q. Who do I call for operational questions once I’ve joined LPL?

A. Your assigned service support team will assist with your operational questions after you have joined LPL.

Q. Do I have to contact LPL to check on the status of my operational requests?

A. You can either contact your assigned service support team, or you can use our Request Tracking Tool if you prefer to track requests yourself.

Q. Is there a specific team that helps with technology-related questions?

A. Yes, we have a technology support help desk that you can contact directly for assistance. LPL will also provide a dedicated technology training line that you can call to help guide you through using our technology platform to submit and process business.

Q. What other products will I have access to?

A. Our complete product catalog contains thousands of products from hundreds of providers. If you’d like a copy of the current provider list, please ask your conversion consultant for the latest approved product guide.

Q. MAP Navigator has a $15k minimum, and I understand it will be migrating into Strategic Asset Management (SAM) at LPL. Does the standard SAM $25k minimum apply for these accounts?

A. We’ll be matching the minimums you had at Waddell & Reed for any converting accounts. However, any new accounts opened after you’ve joined LPL will need to meet our minimums.

Q. What is the small account fee in SAM and when is it charged?

A. Any account under $100k will be assessed a $10 fee per quarter, charged to the client.

Q. Will advisory billing rates change for my clients?

A. No. Your current advisory billing rates will map over to LPL.

Q. Does LPL support annuities?

A. Yes. We’re the largest distributor of annuities in the industry. LPL advisors wrote $10 billion in total annuity premium in 2019 and nearly $7 billion through September 2020. We have selling agreements with more than 30 insurance carriers for 140-plus products. Here are some highlights of our annuity business:

• Our team of annuity consultants is dedicated to helping you with case consultation and product research.
• Our online Annuity Order Entry (AOE) platform offers straight-through processing of your annuity business.
• You can receive advanced commissions on orders funded by exchanges/transfers.
• eSignature functionality was recently added for annuity orders funded by cash and transfer business. We’re making that available for all annuity orders in 2021.

Q. Can you provide general information on LPL’s AdvicePay program and costs?

A. AdvicePay is a digital fee-for-service payment-processing platform built specifically for financial planners to facilitate client payments via ACH or credit card. AdvicePay allows for one-time billing and subscription billing, while remaining compliant with custody regulations. AdvicePay charges a monthly subscription fee of $35 per advisor and associated transaction fees. Advisors producing over $10,000 annually in gross financial planning fees (excluding advisory fees) through LPL’s Corporate RIA are eligible to receive a fee waiver on their monthly subscription fee.

Q. Can you provide general information on LPL Private Client?

A. LPL Private Client empowers you to compete for, win, and retain business with high-net-worth clients and institutions. This is achieved by providing centralized access to specialized experts who can offer advice and implementation strategies across the spectrum of wealth management needs. Through case design support, point-of-sale assistance, and industry leading education and training, LPL Private Client provides a foundation for you to begin building a client base rich in new opportunity. Private Client Consulting supports you with affluent and institutional client opportunities involving $5 million dollars or more of investable assets.

Q. Does LPL have its own insurance agency

A. We do have an insurance agency, LPL Insurance Associates, which can work with you to ensure all of your insurance needs for your clients are met, including consulting on complex case design.

Q. Do I have to use LPL Insurance Associates for my insurance business?

A. No. We allow the use of outside insurance agencies for non-variable (fixed) insurance business, excluding annuities with an index component such as fixed indexed annuities. Note: The use of an outside agency does require disclosure as an outside business activity.

Q. How will my insurance and annuity appointments be transferred to LPL?

A. Your existing insurance and annuity appointments will move to LPL through a mass appointment process. We’ll work directly with the sponsors to eliminate the need for you to submit paperwork on your own.

Q. What is LPL’s Assurance Plan program?

A. The Assurance Plan is a cost-effective solution for purchasing coverage that can help safeguard your business and protect your legacy. In the event of your unplanned exit from the industry, you or your beneficiaries will receive a guaranteed upfront payout, as well as any additional proceeds above the minimum following the potential sale of your book of business.

Key benefits of the program include a guaranteed buyer for your practice, guaranteed upfront payout of 1.5x recurring revenue, and a detailed business valuation report on an annual basis.