LPL Financial CEO on How Technology Expands Access to Financial Advice

Technology is widening access to financial advice

LPL Financial CEO Rich Steinmeier sees technology as a way to bring advice to more households while keeping the advisor at the center of the relationship. That distinction matters: robo-advisors once looked like a threat to human advisors, but Steinmeier says the lasting lesson was that digital tools and personal guidance can work better together.

The transcript from this week’s MiB conversation is below: Rich Steinmeier, LPL CEO, on the Future of Financial Advice.

Stream or download the full conversation, including podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. Earlier episodes are available here.

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MASTERS IN BUSINESS
Rich Steinmeier, CEO, LPL Financial
Bloomberg Radio · Host: Barry Ritholtz · Transcript

BARRY RITHOLTZ: Rich Steinmeier runs LPL Financial, a firm with $2.6 trillion in assets and a network of 32,000 advisors. Its operation also includes 10,000 employees and more than 30,000 people working outside the company. That scale makes this a useful conversation about how a large financial firm equips advisors: the technology, services, and choices it puts behind them. We’ll also get into what’s changing across the advice business.

Rich, welcome to Bloomberg.

RICH STEINMEIER: Thanks, Barry. Great to be here.

RITHOLTZ: Did I get the numbers right?

STEINMEIER: I think you did.

RITHOLTZ: We research the details, and then we run them through AI. You still have to check what it gives you. We’ll talk about AI and science later, but first, your background. You studied economics at Wharton and earned an MBA at Stanford. What did you think you’d do?

STEINMEIER: I wanted to challenge myself. I studied finance at Wharton, though it wasn’t necessarily my passion, and went into consulting at McKinsey. I was interested in entrepreneurship. At one point I considered owning auto dealerships, but eventually decided that wasn’t my path. I went to Stanford to build my leadership skills. Leading people seemed to suit me, and the work was fulfilling.

RITHOLTZ: I just finished The Everywhere Millionaire—the authors’ names aren’t clear in the recording. It argues that substantial wealth often comes from owning businesses such as car dealerships, HVAC companies, and medical practices, rather than running public companies. Those owners are far more numerous, the book says, and the numbers are striking. We’ll come back to that.

You met your wife at Stanford, and she became a consultant too?

STEINMEIER: We met at McKinsey. There were four business analysts in the Cleveland office: three men and one woman, who became my wife. I managed to win her over, and we went to business school together.

At home, we can turn even conversations about the kids into problem-solving exercises. We start building frameworks and decision trees. It’s not always the most interesting way to talk about emotions.

RITHOLTZ: You worked at McKinsey, earned your MBA, and spent time at Ford before entering financial services. Was Merrill Lynch your first financial firm?

STEINMEIER: Yes. I hadn’t planned on working in wealth management. I was drawn to physical products: factory floors, lean manufacturing, automotive work, and Caterpillar. The shift came because I like solving problems—assembling information and figuring out a sound strategy.

A headhunter called about taking the Merrill Lynch brand to the mass affluent, or mass market. It felt like a rare opportunity. I didn’t want to dismiss it just because the work involved a service rather than a finished product.

RITHOLTZ: You joined Merrill in 2006, ahead of the market peak in October 2007 and the financial crisis that followed. What did that period teach you about risk, leadership, and the advisor-client relationship?

STEINMEIER: Merrill and many other financial firms were in serious trouble. Leadership changed, and employees got more transparency. I was still a rank-and-file employee. I learned that even in a crisis, leaders should tell people what they know: whether they can control the situation, what risks they see, and how they’re trying to manage them. Despite the difficult outcome, I thought the firm was managed well during that period.

My own background also shaped how I think about advice. I grew up lower middle class with a single mother, and we struggled financially. She was resourceful, but paying for college could be difficult. I remember her first advisor, an Edward Jones representative who helped with her 401(k). She was proud to have reached a point where she could get advice.

I wanted to help make good financial advice available to ordinary families. That was part of why I was drawn to automotive early in my career: I wanted work that helped Americans. I eventually found that same purpose in wealth management—helping families make better choices for themselves and future generations.

RITHOLTZ: What was your first job at Merrill?

STEINMEIER: I joined the Financial Advisory Center, a call-center advice business that later became Merrill Edge after Bank of America acquired Merrill. I ran the remote advice channel. I liked parts of that business, but I became especially interested in Merrill Lynch’s field advisors. I wanted to work more directly with them and make their jobs easier.

RITHOLTZ: How did you move from Merrill to UBS?

STEINMEIER: I reached a career turning point. I was 38, comfortable, and no longer felt I was learning. I didn’t want to spend the next five or ten years simply running the same business. I wanted to grow and focus on supporting advisors.

I think of advisors as entrepreneurs. They operate with more independence than people inside a conventional corporate structure. At the time, UBS seemed to me like the most advisor-focused wirehouse, so I went there.

RITHOLTZ: You eventually led the development of UBS’s digital advice capabilities. How did that happen?

STEINMEIER: I started in the call-center advice business. Strategy is where I get energy, and as digital advice and robo-advisors emerged, I began working more actively on the firm’s direction.

The challenge was to avoid building a patchwork of technology—one disconnected tool after another. We needed a coherent approach to using technology to help advisors serve clients and extend access to advice. I started shaping the digital strategy, then became chief digital officer. The job grew to include putting the strategy into practice and assembling the technology needed to support advisors.

RITHOLTZ: That was around the mid-2010s. I’m on the older edge of a generation, and the younger people in my office grew up online. Why did major firms take so long to embrace digital platforms? Was it their conservative culture? We’re making up time with AI, but the big firms seemed late to the internet.

STEINMEIER: I’m not sure conservatism explains it. Firms like UBS, and LPL today, want the advisor to lead the client relationship. The technology is there to support that work. A firm may move cautiously because of its founding principles and its view of who should deliver advice, rather than because it’s simply slow.

At LPL, I believe the advisor should lead and the firm should support. That means technology has to make the advisor more effective. It can’t get between the advisor and the client.

RITHOLTZ: Do investors expect different things from technology and from advisors? In the mid-2010s, some large ETF firms feared that robo-advisors would displace human advice. That concern looks misplaced. Wealthy investors still want to be able to call a person.

STEINMEIER: We were worried about it too. I can speak for myself, not for everyone at UBS: I wondered whether advisors would be pushed out and what their role would become.

Robo-advice arrived, and it brought useful capabilities. It also made prices and performance more transparent for investors. The bigger lesson was that technology and human advice can complement each other. Together, they can do more than either can alone.

RITHOLTZ: My firm was started by four middle-class people who didn’t come from wealth. We didn’t want to impose the million-dollar, five-million-dollar, or ten-million-dollar account minimums common at many firms. Robo tools helped us lower those barriers. If onboarding a $25,000 household takes many hours and costs $1,200, the economics don’t work. If software brings the cost down to $11, why not serve that household?

STEINMEIER: That’s the shift underway: technology is lowering the entry point for advice. It can reduce the work involved in opening and maintaining accounts, rebalancing portfolios, and creating more personalized investments, including direct indexing. That makes it possible to deliver better advice to households that might not have been profitable to serve before.

RITHOLTZ: The industry spent decades pursuing market outperformance. Over the last 10 or 20 years, software has also created what I’d call organizational alpha: services that once required accountants and tax and estate attorneys can now reach more clients. What does that change for advice at a firm like LPL?

STEINMEIER: The focus has moved well beyond trading and access to capital markets. It moved from building balanced portfolios, to updating them, to asking a deeper question: what are the client’s goals?

Financial planning is central to good advice. Advisors need to understand a family’s circumstances and ambitions, help them weigh trade-offs, and track whether their decisions are producing the intended results. That work goes far beyond selecting a portfolio and sending quarterly market updates. It involves more decisions and more complexity. Technology can help advisors manage that complexity.

I expect the quality of advice to keep rising. Automated services also raise what consumers expect from financial firms. When a new technology appears, people may declare the advisor finished. I don’t think that follows. The technology puts pressure on advisors who offer only basic portfolio advice, but it also pushes the whole profession to deliver more value. I’m optimistic that more families will get better advice and make better decisions.

RITHOLTZ: That’s fascinating.

We’ll continue the conversation with Rich Steinmeier, LPL Financial’s CEO, on how he helped build the firm into a $2.6 trillion wealth manager. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

A large firm built around advisor independence

LPL Financial’s scale gives it room to invest, but Rich Steinmeier says its purpose is to help advisors succeed. That distinction shapes how he describes the company’s culture, its business model and its approach to acquisitions. Steinmeier joined LPL in 2018 to lead business development. He remembers a company that was already substantial but still developing its processes, talent evaluation, strategy and approach to the market. He called it “a big small firm”: large in size, but less mature than the other major firms where he’d worked. What LPL already had, he says, was a clear sense of whom it served. The firm had spent three decades building a culture around financial advisors and institutions. Steinmeier says that focus makes decisions easier: the test is whether those clients are better off than they were the day before. That orientation also explains his view of leadership. Steinmeier has said he found more fulfillment “setting picks and taking charges than scoring,” a basketball metaphor for doing the work that lets teammates succeed. At LPL, he says, the points belong to advisors and their clients. The firm still has to make a profit and remain able to invest, but its role is to support advisors, whether they see LPL as a partner or a vendor. He describes the company as an “enablement firm”: it helps entrepreneurs and institutions build successful businesses. That’s a useful way to understand LPL’s position in the industry. Advisors at firms such as Merrill Lynch, Morgan Stanley and Wells Fargo generally work for broker-dealers that employ them. LPL, by contrast, works with independent advisors who own their practices and decide how to serve clients. LPL supplies infrastructure: compliance, market access, technology, supervision, product due diligence and technology for investors. Advisors choose their financial planning software and shape their client experience. The firm can offer support for alternative investments or high-net-worth services, among other capabilities, while the advisor remains responsible for running the business. Steinmeier describes LPL as an independent broker-dealer that has expanded into a full-service wealth manager.

Turning strategy into something employees can use

Steinmeier’s path to the CEO role unfolded over several years. After business development, he took on broader work as LPL expanded its affiliation models and ways of reaching the market. He also spent more time on the institutional business, supporting financial institutions’ wealth management operations. He later became chief growth officer, interim CEO and, about a year after that, CEO. The final step came sooner than expected. LPL had begun succession planning when an external event accelerated the transition. Steinmeier says he felt reasonably prepared, but found that being CEO was “almost playing a different game.” The job demanded less attention to individual tasks and more attention to whether the company’s different constituencies could succeed. As CEO, he wanted LPL’s nearly 10,000 employees to understand how their work fit into the company’s direction. The firm first revised its values, then laid out strategic pillars and the initiatives beneath them. Its “Five by Five” playbook sets out five pillars, each with five initiatives: 25 priorities intended to show employees how their work contributes to clients’ or the firm’s success. The communication challenge, Steinmeier says, is that people may not hear a message, absorb it after one exposure or understand it without context. LPL uses quarterly town halls and separate advisor town halls, with live questions so participants can challenge the strategy or ask for clarification. The aim is to make the plan easier to understand while acknowledging that it remains complex. The point is practical. If employees and advisors understand how decisions are made, they have more context when the firm faces difficult choices. Steinmeier says he wants LPL to be transparent enough that people can judge the direction for themselves, even if they decide they don’t agree with it.

Making room to celebrate the work

One of LPL’s new values is to “create and share joy,” a phrase Steinmeier says he proposed shortly after becoming CEO. He and two colleagues began revisiting the firm’s values that Thursday, after he got the job on Tuesday. He wanted values that felt more aspirational. “We pursue greatness” was one priority; creating joy was another. His reasoning is less about perks than about recognizing the demands of the work. Employees have families, and some jobs involve long hours. LPL’s technology teams, he says, may work two or three weekends a month when new code goes into production. Steinmeier argues that serious work and enjoyment can coexist, and that teams should mark exceptional efforts instead of immediately moving on to the next deadline. He points to LPL’s partnership with Prudential. The firm had set a conversion date 18 months ahead and spent more than $200 million developing the opportunity. When the team met the deadline, he says, the achievement deserved more than a quick “great job” before everyone moved on. LPL has used surprise food trucks, extra time off, rewards, recognition and promotions to thank employees. Steinmeier says the Prudential work involved thousands of people, so the company recognized the team rather than elevating a single “hero.” He and other executives also made personal calls through Microsoft Teams to thank employees. The message, he says, was that the company saw and valued the effort.

Growth with a case for independence

LPL’s growth has included acquisitions and partnerships, which Steinmeier distinguishes carefully. Commonwealth was a $2.7 billion acquisition; Atria was another acquisition. Prudential and Wintrust, he says, are partnerships in which LPL works alongside the institutions on their own go-to-market businesses. The broader ambition is to become what Steinmeier calls the best firm in wealth management, measured by whether advisors can be more successful with LPL than elsewhere. Scale, in his account, is a way to fund larger investments in technology, products and expertise. He sees a choice in how those capabilities are used: firms can invest in technology that steps between clients and advisors, or in technology that strengthens the advisor’s role. LPL wants to compete at scale while directing those investments toward advisors. That’s more than a deal rationale. It’s the principle LPL says should guide its growth. Steinmeier points to Atria’s entrepreneurial culture and Commonwealth’s strong advisor service, including its responsiveness and technology informed by advisor priorities and feedback. The question for LPL is whether it can grow while preserving those qualities and make the combined business more valuable than its parts. Steinmeier says that requires careful diligence before a deal and deliberate choices afterward. LPL wants to grow large enough to invest, but still feel personal. Its acquisitions, he says, should preserve what made each firm distinctive instead of flattening them into a single culture. That distinction also applies within Commonwealth. The firm has about 2,000 advisors, or perhaps 3,000 depending on how the count is drawn, and thousands of individual practices. LPL wants those advisors to retain control over how they present themselves and take their businesses to market. Integrating Commonwealth’s home-office staff and service experience is a separate matter: Steinmeier says LPL needs to identify what made that operation special and preserve it. The challenge is clear. A larger organization can fund broader capabilities, but growth can also make service feel less personal. Steinmeier’s answer is to keep advisor practices distinct while deciding carefully which parts of an acquired firm’s home-office culture should carry forward.

Scale Without Losing Speed

The operating model Steinmeier describes is built around a split: standardize the work that can be shared, then let advisors differentiate where clients actually experience the service. Account opening, transfers and much of the underlying technology can fit an integrated system, he says, while the “final mile” of advice delivery should remain distinct. The analogy is utility infrastructure: distribution can be common; the last stretch to the customer is where providers stand apart. That same balance shapes his description of LPL Financial. CEO Rich Steinmeier agrees with Barry Ritholtz’s label for the firm: a “small big firm.” LPL has added discipline, process and structure, but Steinmeier says it still feels flat and responsive, with decisions made quickly and accountability kept close to them. His exposure to some of the largest U.S. firms through industry councils has reinforced that sense of scale. The point is more than branding: growth matters only if it doesn’t bury the speed and entrepreneurial feel that advisors value.

AI’s Test Is Time Returned to Advisors

Steinmeier puts a practical measure on AI: advisors spend about 30% of their working time delivering advice to clients. The other 70% is the opportunity for technology to reduce administrative work. He points to meeting notes and preparation, financial plan updates, tax planning and optimization, and automated investment solutions as areas where tools can help. LPL’s approach has three parts. First, automate advisor office workflows, such as carrying meeting outcomes into account applications, while keeping a person in the approval loop. Second, simplify internal processes including compliance reviews and money movement. Steinmeier estimates these account for about 80% of the non-client-facing work he described. Third, help LPL employees work more efficiently, including roughly 3,000 developers writing code, as well as other knowledge workers using identified tools. That framework is sensible, but deploying tools is only half the job. LPL is rolling out Scion as part of a $2 billion technology investment, and Steinmeier says the firm has underestimated the work required to bring new capabilities to market: advisors need to know what’s available, learn how to use it and match tools to the needs of their practices. If you’re building technology for independent advisors, adoption is the harder measure to watch. A large budget and a long feature list don’t show whether the tools are improving the work.

Choice Has to Be Earned

LPL lets advisors and institutions affiliate as independent broker-dealers, registered investment advisors, or both, and also serves banks and credit unions. Steinmeier frames that range as a way to let clients choose how to run their businesses, rather than forcing them into a single model. That flexibility can widen the firm’s appeal, though it also raises the bar for systems and support that must work across different ways of delivering advice. He says LPL’s advisor attrition rate is 1.5%, compared with an industry rate of about 5%, and attributes the difference to an unusually direct obligation: advisors can leave, and the firm helps them when they do. In his account, retention isn’t secured by contracts; LPL has to earn the business repeatedly. Steinmeier acknowledges that advisor satisfaction varies, but says the firm’s daily task is to keep earning it. That claim is striking in an industry Ritholtz describes as full of aggressive non-competes and signing bonuses that fuel a cycle of advisors moving among firms. The exchange ends just as he asks Steinmeier what LPL contracts look like and whether the firm avoids that recruiting game. The answer isn’t included here. Still, the principle Steinmeier has laid out is clear: when advisors can walk, service and flexibility become the retention strategy.