New Advisor Headcount Drops At LPL Financial

By Cyril Tuohy

InsuranceNewsNet

LPL Financial reported first quarter net income of $53.13 million, down 2.9 percent from the year-ago period, as a block of 40 advisors left the company for another institution, the company’s chief executive officer said.

LPL announced it added 52 new advisors in the first quarter, down from 110 new advisors in the fourth quarter of 2013.

At the end of the first quarter, there were 13,726 advisors working for LPL, an increase of 2.6 percent compared to the year-ago period, the company also said.

“We had a strong start to the year highlighted by sustained advisor productivity and excellent advisory and brokerage asset growth," said LPL Financial chairman and CEO Mark Casady.

Casady added that the company’s independent model continues to attract new advisors and contributed to the company’s 96 percent retention rate in the first quarter. “After a slow start to recruiting to begin the year, our business development team saw improving conditions in March,” he said.

Casady declined to say where the 40 advisors had gone.

Revenues were $1.08 billion, up 11.6 percent from the year-ago period.

Expenses rose to $999.98 billion, up 13.2 percent from the year-ago period due to a drop in the federal funds rate, new headquarters and higher recruiting costs also rose, the company also said.

Advisory and brokerage assets rose to $447.1 billion, up 13.5 percent from the year-ago period, as 53 new advisors joined LPL.

Investor demand for financial and retirement advice has meant LPL’s advisors have been able to expand their practices and manage more assets, chief financial officer Dan Arnold said.

Much of the growth is coming from LPL’s higher-margin fee-based business, which generated $4.4 billion in new advisory assets in the first quarter, Arnold added.

The company reported first-quarter commission revenue of $534.57 million, up 10.1 percent from the year-ago period. Advisory revenue was $327.25 million, up 16.4 percent compared to the year-ago period.

Asset-based revenues of $114.67 million were up 10.5 percent compared to the year-ago period, and transaction and fee-based revenues reached $89.98 million, up 0.7 percent compared to the year-ago period, the company also said.

In the first three months, LPL brought on three advisory practices, together representing more than $500 million in assets under management.

In January, Brookfield, Wisconsin-based Granite Financial Group joined LPL from Morgan Stanley Wealth Management. Granite brought with it more than $130 million of client advisor and brokerage assets to LPL, the company previously announced.

In February, Minnetonka, Minnesota-based 360 Financial, an advisory shop with $150 million in brokerage and fee-based accounts, and $120 million in retirement planning assets, joined LPL.

Later that month, Matawan, New Jersey-based Atlas Private Wealth Advisors, with $125 million in brokerage and fee-based client assets, also joined LPL.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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