Is LPL Building the Next Schwab or Fidelity?

It’s fascinating to witness what’s happening with LPL Financial right now. In real time, we’re watching the company seemingly reverse-engineer the models of Schwab or Fidelity—but in reverse.

What I find most interesting is their heavy emphasis on buying books of business, not just recruiting advisors to their platforms. From smaller buyouts to big swings, the common trend is who owns the actual client relationships. 

We’re not just talking about recruiting to a platform anymore.

Why this aggressive shift into owning client relationships? Perhaps it’s just a focus on chasing margins. The financial reality is simple: the closer a firm is to the client relationship, the better the margins. That’s no secret. 

Major firms like Merrill Lynch or Wells Fargo, if given the chance, would likely make every advisor a relationship manager with a high salary while keeping all client assets under their control.

In this light, what LPL is doing isn’t surprising. By buying up businesses and dictating terms, they’re moving closer to owning those relationships—and the margins that come with them.

For many advisors, this shift is fine. But for fiercely independent advisors who value autonomy, it’s uncomfortable. Yet, the logic is clear: controlling assets, retaining revenue-sharing arrangements, and removing friction from operations create a stronger financial position for LPL. 

They’ve effectively built an ecosystem where the margins are far higher than the traditional 90%-95% payouts offered to independent advisors. Instead, they’re leaning towards a structure with lower payouts, higher efficiency, and more control.

In essence, they’re solving for advisors’ pain points like office space, compliance, and operational friction—but at a cost. Advisors get support, but they lose some of the freedom and control that drew them to independence in the first place.

What’s striking is how this shift mirrors the practices of larger institutions. LPL’s actions increasingly resemble those of the big wirehouse advisors often leave to escape.

For some, this transition is acceptable—a natural evolution of the business. But for advisors who treasure independence, it raises questions about alignment, values, and long-term fit.

Ultimately, LPL’s model is changing, and whether it works for you depends on your vision for your career and business. As they grow closer to the client relationship, they’ll need to balance control with the independence their advisors value most.