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LPL Financial

LPL Reports Record Recruiting Quarter on Heels of B/D Acquisition

Following the announcement of its acquisition of Crown Capital Securities, LPL said it added $19 billion in recruited assets and 421 net new advisors during the second quarter.

LPL Financial announced another record quarter for recruiting, adding $19 billion in assets prior to large enterprises, up from about $13 billion in the first quarter and down from nearly $44 billion a year ago, when the firm onboarded the advisors from CUNA Mutual Group. This brought the firm’s total recruited assets over the past 12 months to $60 billion, or $55 billion prior to large enterprises, up about 4% from last year.

The earnings results followed the firm’s announcement Tuesday that it plans to acquire the wealth management business of Crown Capital Securities, an Orange County, Calif.-based broker/dealer with about 260 advisors with $6.5 billion in assets.

“This transaction will give Crown Capital’s advisors access to our differentiated capabilities, technology and service,” LPL CEO Dan Arnold said on an earnings call Thursday.

Arnold said the firm expects to onboard those advisors early next year.

LPL ended the second quarter with 21,942 advisors, up 421 sequentially and 1,071 year-over-year.

Of the $19 billion of recruited assets, $14 billion of that was attributed to LPL’s traditional independent model. About $4 billion of the quarter’s recruited assets were from the firm’s newer affiliation models, including Strategic Wealth Services, its employee division and its enhanced RIA unit.

Total advisory and brokerage assets were $1.2 trillion for the quarter, up 6% from the first quarter, which the firm said was due to continued organic growth and higher equity markets. Total organic net new assets were $22 billion, a 7.4% annualized growth rate.

Second quarter adjusted earnings per share of $3.94, up 76% year-over-year, beating analysts’ expectations by $0.06, according to SeekingAlpha.com. Revenue of $2.47 billion, up 21% year-over-year, beat by $30 million.

The firm’s gross profit for the quarter was $990 million, up 39% year-over-year but down 3% sequentially.

LPL Chief Financial Officer Matt Audette said the organic growth momentum has continued into July. Excluding the July onboarding of Bank of the West advisors, the firm is on track to achieve a 6% to 6.5% growth rate for July, compared with a low 4% range for July 2022. When you add in Bank of the West, it would be at about 11% organic growth.

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