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LPL’s Corporate RIA Growing Faster Than Its Hybrid Platform

The independent broker/dealer has $185 billion in assets on its corporate RIA platform, up 27 percent year-over-year.

Assets on LPL Financial’s corporate registered investment advisor platform increased 27 percent year-over-year and 6 percent sequentially to $185 billion, the company announced in its third quarter earnings release. That compares to a total of $121 billion on its hybrid advisory platform, which includes firms that run their own RIA, up 15 percent over a year ago and 3 percent from last quarter.

The corporate RIA had inflows of $5.9 billion for the quarter, up 14 percent on an annualized basis, compared with net outflows of $800 million for the hybrid platform. That included $2.4 billion of outflows (of which $1.5 billion was advisory) from a small number of hybrid firms that left the company.

Earlier this year, LPL lowered pricing for advisors under its corporate RIA. It also put in place a new requirement: new advisors had to have more than $50 million in advisory assets to join their hybrid platform. The firm has since rolled back that requirement.

This year, the firm also introduced an aggressive recruiting package, offering advisors at select rival firms 50 basis points on assets if they join the firm’s corporate RIA and 40 basis points on assets to join hybrid offices of supervisory jurisdiction.

The firm has been recruiting heavily over the last quarter, adding 125 advisors, bringing headcount to a total of 16,174. And the firm has poached some large teams from competitors. It recruited $9.1 billion in new assets during the quarter.

Overall, the firm reported GAAP earnings per share of $1.19, up 89 percent year-over-year, beating analysts’ expectations by 7 cents a share, according to Net income increased 84 percent over the year-ago period to $107 million. Revenue was $1.33 billion, up 25 percent YOY, beating expectations by $30 million.

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