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It isn t easy to avoid chain stores and franchise restaurants in a cookie-cutter suburb like Marietta, Ga. But Julie Williams takes pride in patronizing mom-and-pop joints, whether she s getting takeout from a local pizza parlor or picking out home decorations at White Rabbit Cottage. She feels the same way about her broker. Merrill Lynch? No, thanks. Not TD Ameritrade, either, even with Sam Waterston espousing its virtues in ubiquitous television ads.

Instead, Williams, 40, relies on a local outfit, a two-person shop where the biggest piece of art is a tribute to the University of Georgia marching band. Far from the steers of Wall Street, John Colegrove, of John Colegrove Inc., offers a folksy departure from the slick-broker stereotype. He prefers to dispense financial wisdom by making house calls, occasionally in the form of a rib dinner with Williams and her family. When he sends monthly account statements, he always attaches a handwritten note. And after Williams was laid off last year from her job as a buyer at Home Depot, Colegrove rejiggered the family s finances to ensure her two kids would have enough money for college. He s almost as good of a friend as he is a financial planner, Williams says.

But what he isn t is a true mom-and-pop operator. In fact, Colegrove is part of a giant network that makes him, to some extent, no more independent than the local Pizza Hut. He s among the more than 12,000 advisers affiliated with LPL Financial, one of the fastest-growing brokerages in the country. Late last week the firm announced it intends to have an initial public offering and raise up to $600 million. But although the firm handles everything from paperwork to fund recommendations for an estimated 1.5 million clients of advisers nationwide, few clients are aware of its existence, and many advisers play down the chain s role. Williams, for example, says she has seen the firm s name on documents but admits she has never paid attention to it. And Colegrove? I bring it up at the first meeting, he says, but thereafter, I don t really talk about it.

Since the financial crisis began, thousands of ordinary investors, mistrustful of big, national brokerage firms, have been searching for conflict-free advice. They ve hired independent advisers to create customized strategies and shepherd them toward a secure retirement. But as it turns out, one of the firms benefiting most from this trend is as big as the financial supermarkets that clients have been defecting from. In just five years, LPL has quietly doubled its adviser army and its revenue, becoming the country s fifth-largest network of financial advisers. The firm now has more advisers than JPMorgan Chase and Charles Schwab combined, and it manages $280 billion in client money just behind rival Ameriprise and ahead of national brand Raymond James.

It s a record that many companies in this $6.9 trillion industry would celebrate with a public victory lap, but LPL s approach has been decidedly low-key. Indeed, until June 4, when the firm registered its IPO with the Securities and Exchange Commission, few people would have even recognized its name. The firm, like some other large networks that follow a similar approach, generally avoids marketing directly to consumers. In a separate recent filing with the SEC, LPL describes its network of advisers and not their clients as our customer base ; and industry analysts don t expect that approach to change if the company goes public. Both before and after their IPO filing, company executives declined to comment on the record for this article; when asked how their business model might affect customer service, the company points to third-party surveys in which LPL receives high marks from investors.

But as it steamrolls its competition, LPL s style of delivering advice presents investors with a riddle: Who s truly independent? Despite the dominance of the industry s big players, small investors from Kansas City to Kalamazoo still rely on advisers whose drawing card is their perceived autonomy. LPL s advisers are mostly contractors: Around 80 percent do business under their own names, most with only fleeting references to their affiliation. Yet the LPL mother ship consistently influences their strategy, with a constant flow of research, prepackaged investments and homogenized advice that critics say would do any name-brand brokerage proud. I don t think consumers fully understand that, says Tim Welsh, president of Nexus Strategy, a consultant to the wealth-management industry.

Illustration by Dave Wheeler

LPL didn t start out as the biggest American broker you ve never heard of. Its roots date to 1985, when a 27-year-old former Smith Barney adviser named Todd Robinson bought a Boston mutual fund broker called Linsco. Robinson envisioned building a firm that could compete with Wall Street wire houses, and in short order he merged Linsco with a San Diego broker dealer called Private Ledger and recruited advisers to serve the suburban and rural middle class. By 2005 the firm had 6,000 advisers and $1.1 billion in revenue. A cash injection from two private-equity investment firms that year allowed LPL to grow even faster; today the firm has more than 12,000 advisers and $2.7 billion in revenue. Now the mere mention of its name can cause rivals to bristle. What s LPL? The largest, says Jim Nagengast, president of Securities America Inc., a subsidiary of Ameriprise. The largest doesn t always mean the best.

The company continues to shun the white-shoe, city-centric business model. While there are LPL advisers in New York and Boston, you re just as likely to find one in Creve Coeur, Mo., or Hurst, Texas. According to Aite Group, a market-research and advisory firm, the average client invests between $200,000 and $250,000 with LPL less than half the amount of the typical wire-house customer. And the network often reaches much further down the net-worth scale. Travis Pierce serves clients in and around Luverne, Minn., a town of 5,000 that has more ethanol plants (one) than Starbuckses. Pierce s clients have, on average, between $50,000 and $100,000 to invest, an amount that wouldn t even get them a meeting with some of his competitors. But the 42-year-old adviser is happy to work with them; besides, Pierce says, some of them bake him apple or blueberry pies.

The perks go beyond pastries. According to company recruiting materials, LPL lets advisers keep more than 90 percent of most commissions, twice as much as many national chains allow (although, unlike those at some firms, advisers usually pay for their office space and other overhead). Pros in the network also say they have latitude that many of their competitors lack. LPL is not a market maker or an investment bank, so it doesn t have employees trading stocks and bonds to make money for the company. This means that, unlike many of their counterparts, its advisers don t have an incentive to sell a particular investment just because the parent company owns a truckload of it.

Advisers enthuse about the tech support, too. LPL processes stock trades, generates account statements and helps advisers comply with regulatory requirements. It has disseminated technology that lets advisers change multiple client portfolios with one click. These tools free up time that advisers can use to concentrate on drumming up new business. New customers, naturally, feed LPL s growing coffers; more than 75 percent of its revenue last year came from its cut of fees and commissions that its advisers charge clients. Michael Sigmon, an adviser in Norman, Okla., says LPL s state-of-the-art technology drew him to the firm in 1995. That turned out to be a big addition, since Sigmon brought 10 years worth of clientele with him, plus, eventually, both of his financial adviser sons (one in Norman; the other in Newport News, Va.) and their clients. Today the Sigmons mini-empire accounts for $250 million of the assets under the LPL umbrella.

With Growth, More Criticism

But the firm s detractors, including not only competitors but also some industry analysts, say its strategy of anonymous growth can put a heavy emphasis on adding clients (and their cash) rather than serving them. They sell technology as an alternative to a personal relationship, says Kevin Newman, an adviser in Oak Brook, Ill., who joined LPL in 2007 after a merger but left two years later for a smaller broker dealer. Newman says he didn t want to be affiliated with a firm where he couldn t get a principal on the phone if he had a major problem. At his new, smaller firm, Newman feels like his clients will get immediate, personalized attention if he should suddenly be hit by a bus ; he also likes the fact that a senior executive came to his office s Christmas party last year. LPL declined to comment on criticism like Newman s, but such misgivings don t appear to have trickled down to many clients: In a 2009 J.D. Power survey, for example, the company received high marks for customer satisfaction.

Still, the company s growth has made it vulnerable to accusations that it values size over customized service. Independent advisers, in theory, screen thousands of stocks, bonds and other investments to find the ones that best suit their clients needs. But, though their customers may not realize it, LPL advisers say they often rely on one-size-fits-all investment strategies designed by the home office. In addition to recommending mutual funds and annuities, LPL markets sweeping money-management tools like the Optimum Market Portfolio series, which includes five model investment portfolios, each filled with a preset mix of stocks, bonds and cash. The advisers, of course, don t have to follow the models exactly, but they say that many clients adopt them as is. Debra Taylor, an LPL adviser in Franklin Lakes, N.J., uses company-designed model portfolios with at least 80 percent of her clients. Clients make a few choices, such as whether they want their portfolio aggressive or conservative, and then Taylor fills the portfolios with the exact mutual funds the parent company recommends. The managers that LPL picks are the best of breed, she says. Once she s put them in place, she explains, she can t tweak the asset mix if clients are dissatisfied, they have to switch to a different model portfolio.

That approach doesn t sit well with Alan Lancz, an independent registered investment adviser in Toledo, Ohio, who says eight former clients of LPL advisers have joined his practice since 2007. According to Lancz, several said they had asked their advisers to change their model portfolios as the market's crash began, but wound up being stonewalled. The firm s model portfolios are great from a marketing point of view, Lancz says, but they can go sour on clients who want flexibility. A person familiar with the company confirms that the model portfolios don t allow midstream tweaks; but the person adds that advisers have the option to use open architecture platforms that offer more choice in managing clients investments.

Who s Truly 'Independent'?

For all the reams of disclosures LPL advisers must make on many matters, they aren t required to read chapter and verse to customers about their own affiliation. According to the Financial Industry Regulatory Authority, the industry-funded group that oversees advisers, they are obligated only to prominently disclose the name of the firm in advertising materials. What s more, LPL isn t the only firm whose relationship with independent advisers isn t immediately obvious to customers. The vast majority of independents work with bigger umbrella companies that take care of trades, legal paperwork and other critical tasks. LPL s aggressive use of investment recommendations, however, puts its advisers in a smaller, often less autonomous group.

Exactly how much that matters to clients is a matter of taste, of course; some say they don t mind, but others chafe. After 50 years in the commercial-construction business, Tom Finch says the last thing he wanted when real estate began its descent was a big position in property-related businesses. But the Holland, Ohio, resident says that after he noticed real estate holdings in his portfolio, the LPL adviser he had been using balked at changing the mix. I was led to believe it was a hands-on situation. It was not, says Finch, who switched to a non-LPL firm. (The LPL adviser declined to comment.)

Other clients have left LPL for simpler pocketbook reasons. While the company s fees are on par with the industry average, some former customers complain that it charges too much, proportionately, especially in fees on its lower-net-worth clients. Robert Linnemann left LPL in 2009 in part, he says, because it cost the 29-year-old Duluth, Minn., composer $50 to trade a stock. When he wanted to close his accounts, worth about $3,000 in total, he discovered it would cost $330, more than 10 percent, in fees and commissions to do so. That s completely ridiculous, Linnemann says. (LPL declined to comment on these and other specific customer complaints.)

Neither success nor criticism has changed LPL s anonymity; the question now is whether its IPO will amount to a coming-out party. The first quarter of 2010 was the most profitable in the firm s history, and its public offering has been long-awaited by company watchers who expected the firm s private equity investors which currently own 60 percent of LPL to eventually cash out. If the IPO takes place, advisers will need to get used to something new: sharing the spotlight. An adviser using LPL spins himself as an independent, says Chip Roame, managing principal of the financial-services consultancy Tiburon Advisers. He doesn t want to say, I work for LPL, this big, intergalactic company.

From the upcoming July issue of SmartMoney magazine.