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LPL Profit Rises 9.3 Percent Despite Regulatory Charges

LPL Profit Rises 9.3 Percent Despite Regulatory Charges

LPL Financial posted net income of $48.5 million, or 49 cents a share, for the fourth quarter, up 9.3 percent from a year ago, despite $4.9 million paid in regulatory charges. Adjusted earnings per share of 66 cents beat analysts’ expectations by 5 cents, while the firm’s net revenue of $1.1 billion, up 0.9 percent year-over-year, was in line with expectations.

But the firm’s 2014 adjusted earnings per share of $2.44 remained flat from a year ago, due to headwinds from a decline in cash sweep revenue and regulatory charges, said Dan Arnold, chief financial officer, in a statement. For the year, the company incurred $36.3 million in regulatory fines and restitution, four times the level of charges in the prior two years.

In March, FINRA fined the firm $950,000 for its failure to supervise sales of non-traded REITs, oil and gas partnerships, business development companies, hedge funds, managed futures and other illiquid investments. This summer, Illinois Securities Department ordered the firm to pay $2.8 million in fines and restitution for failing to maintain adequate records for its variable annuity exchange business and failing to enforce its supervisory system related to variable annuity exchange activities.  

During the quarter, the independent broker/dealer surpassed 14,000 advisors, adding 126 net new advisors over the three months. Total headcount is now at 14,036, up 2.7 percent from 13,673 a year ago.

Net new advisory assets were $4.1 billion for the quarter, down from $4.8 billion for the third quarter. For the year, advisory and brokerage assets grew 8.4 percent to $475 billion.

“This result included a record $18 billion in net new advisory assets, benefiting in part from the strong growth in our hybrid RIA solution,” said Mark Casady, chairman and CEO. 

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