|Financial Planning Staff|
The country’s largest independent broker-dealer is set to begin reducing its labor force this year.
LPL Financial announced the news along with its announcement of fourth-quarter and 2012 earnings, which showed modest revenue growth but also a decline in profits.
Net revenue for the fourth quarter ended
LPL’s adjusted earnings per share rose 13.6% for the fourth quarter to
LPL plans to “reposition” its labor force “by transitioning select non-advisor-facing functions to a leading global services provider,” Mark Casady, chairman and chief executive of the firm, said in a statement. He said the move was “not simply a cost reduction exercise, but an initiative to implement changes to our foundational technology, enhance the quality of our work and improve the speed of our delivery.”
LPL also plans to make "more targeted investments in people and technology in areas that support our growth and create value for shareholders," Casady said.
Job cuts at LPL are likely to begin in the third quarter, according to published reports. The company did not cite any specific dates or numbers.
"Headcount reduction is not the primary goal of this work," LPL spokeswoman
FOCUS ON MARGINS
Industry analysts hailed the move to reduce labor costs, and said they were not surprised.
“They’ve stated that part of their business strategy is to expand margins, and because a company like LPL has less control over revenues in this environment, they are going to focus on what they can control, which is expenses,” said
“LPL has lots of opportunities ahead and is expanding into areas such as high-net worth, banks, trusts and mass market,” said
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