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LPL Financial

LPL’s Earnings and Advisor Count Jump Amid Latest Deals

LPL's advisory and brokerage assets edged past $1 trillion in the quarter, along with a 17% increase in income and a 13% increase in advisors.

LPL Financial reported another strong quarter as net income increased to $119 million from $101 million the same period last year, despite dropping 8% from the previous quarter. Its advisory and brokerage assets climbed to $1.1 trillion from $761 billion.

The company closed 2020 with $903 billion in total client assets. Since then, assets have continued to increase, reaching $958 billion in Q1, and they’ve also trended more toward the advisory side of the business. The movement is so great, LPL has become the third-largest RIA custodian and relaunched a custody platform for fee-only RIAs free of a brokerage affiliation.

Marc Cohen, executive vice president of the firm, told in June that 75 cents of every dollar LPL brings in goes into advisory accounts.

Second quarter earnings revealed advisory assets, as a percentage of overall assets, increased slightly from the previous quarter. They crossed the halfway mark in the first quarter, reaching 52%, up from 49% in the fourth quarter of 2020. In the second quarter, advisory assets stood at $577 billion, a 54% jump from the previous year's quarter, while brokerage assets advanced by only 38% to $535 billion. Both avenues grew by 16% from the first quarter.

Advisor head count rose to over 19,000, growing by about 2,000, a 13% change year over year. It added over 1,400 advisors in the second quarter, an 8% uptick. Included in the newest count are the more than 200 advisors from the M&T Bank partnership made early last year and the 900 plus advisors that transitioned over when LPL completed its purchase of Waddell & Reed’s brokerage business in April.

Waddell & Reed’s brokerage business added $69 billion in assets under advisement. During the earnings call, Matt Audette, chief financial officer, said 98% of client assets were brought over.

LPL also added assets from BMO Harris Financial Advisors. It onboarded $3.1 billion of brokerage assets in the second quarter, completing the acquisition of $15 billion total assets.

Wall Street estimated earnings per share would be $1.68. LPL beat estimates by more than $0.10 with an EPS of $1.85. Revenue also beat Wall Street’s forecast by 7.6% when it reported $1.90 billion instead of $1.76 billion. LPL’s stock rose 2.6% Thursday before earnings were announced.

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