By Andrew Welsch

When LPL Financial landed an agreement in August 2023 to provide a wealth management platform for insurer Prudential Financial's 2,800 financial advisors, it was a big win for LPL.

It also marked the beginning of a lot of work for LPL staffers, who built new technology, a new broker-dealer, and a new registered investment advisor to meet the needs of Prudential's advisors. Now, after spending $300 million on the platform, dubbed LPL Enterprise, the company hopes to win over more such clients.

"This opens up a $1.5 trillion addressable market as it relates to insurance companies that operate wealth management firms," says Ken Hullings, executive vice president of Institution Client Success at LPL Financial.

Prudential's wealth unit has moved approximately $25 billion in assets to LPL's platform as of Nov. 18, according to LPL, which expects another $35 billion of assets to move over in the next several months.

LPL, already one of the nation's largest wealth management companies with $1.6 trillion in client assets, has been steadily growing its business through advisor recruiting, acquisitions, and landing large institutional clients such as banks and Prudential. LPL has benefitted from consolidation in the industry, as rising technology and compliance costs have driven smaller players into the arms of larger ones and prompted insurers to sell their wealth management units or seek partners to help them run them.

Prudential is the first client firm to use LPL Enterprise's broker-dealer and RIA, which LPL says is designed to meet the specific needs of insurers. Although LPL provides a wealth management platform to banks and credit unions, insurance companies are a different breed because they also offer their own insurance and annuity products. "They have their own products, so there's more complexity," Hullings says.

LPL's partnership with Prudential will benefit LPL's existing advisors and clients, Hullings says. That's because the technology, capabilities, and flexibility that LPL has created for Prudential will be made available to all clients and advisors, he says.

Hullings says that institutional clients can curate the platform, products, advisory solutions, and technology to provide differentiated offerings to their customers.

The Prudential agreement "was a great catalyst for us to start a modernization of our platform and offering," he says.

Write to Andrew Welsch at andrew.welsch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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November 18, 2024 15:20 ET (20:20 GMT)

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