Every financial advisor is required by FINRA/SEC regulation to practice under the supervision of a broker-dealer/RIA or “back office,” whose job is to custody accounts, maintain records, and make sure the advisor is following regulations and best practices. For many financial advisors today, their broker-dealer is also their employer. Not so for Harris Financial. We’ve hired the largest independent broker-dealer in the country1, LPL Financial, to be our back office so we can focus on you.
LPL Financial is a Fortune 500 company2, with over 22,000 advisors and over $1 Trillion in assets under management. LPL is an industry leader3 for innovation in supporting advisors to help their clients, by acting as a custodian for your assets, providing technology, trading tools, compliance oversight, financial planning resources, and much more. For example, as custodian, LPL is responsible for producing and delivering statements for your investment accounts.
What does it mean to be “independent?” It means that we don’t produce any financial products to sell you, and neither does LPL. You can’t buy a “Harris Financial mutual fund” or an “LPL annuity” because it doesn’t exist. There’s nobody at the back office telling us which investment tools to use for you because they will make the company the most money – we are free to recommend the tools we think will best fit your needs. For clients utilizing advisory asset management services, our compensation is tied to the balance of your account, not the investments we use inside it, making it in our best interest to try to protect and grow your balance over time.
One question we get occasionally is “what happens to my money if Harris Financial or LPL goes bankrupt?” Per FINRA/SEC regulations, client investments are never commingled with the operational revenues or assets of either company – put simply, we don’t mix your money with our own, and the accounting for you is completely separate from the accounting for us. That’s another great reason we’ve hired LPL – their job is to make sure the value of your account is properly recorded, so you can have confidence and trust that you are getting accurate information. There is insurance coverage called “SIPC” available (up to applicable limits) to protect the value of your account against institutional failure. It’s important to know that SIPC coverage is not insurance against investment losses. The LPL Financial SIPC Membership provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be claims for cash. An explanatory brochure is available at www.sipc.org. Additionally, through London Insurers, LPL Financial accounts have additional securities protection to cover the net equity of customer accounts up to an overall aggregate firm limit of $750,000,000 subject to conditions and limitations. The account protection applies when an SIPC member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against losses from the rise and fall in the market value of investments.
We are pleased to be able to work with LPL to make tools and resources available to you, our client. We think they make us better at what we do – and anything that makes us better for our clients is worth doing.
1 As reported by Financial Planning magazine, 1996-2022, based on total revenue.
2 Fortune Magazine, Ranked 442 in 2022.
3 Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine 1996-2021); No. 1 provider of third-party brokerage services to banks and credit unions (2020-2021 Kehrer Bielan Research & Consulting Annual TPM Report); Fortune 500 Company as of June 2021. LPL and its affiliated companies provide financial services only from the United States.