Q2 Earnings: LPL Financial Net Revenue Rises 13.1%

Advisor assets under management exceed $100 billion for first time

LPL Investment Holdings, parent company of LPL Financial, reported second quarter net income Wednesday of $45.5 million, or $0.40 per diluted share, up $37.5 million compared to second quarter 2010 net income of $8 million, or $0.08 per diluted share.

Adjusted earnings, which the company says exclude certain noncash charges and other adjustments, were $58.8 million, or $0.52 per diluted share, compared to $46.4 million, or $0.47 per diluted share in the second quarter of 2010.  

Net revenue for the second quarter of 2011 increased 13.1% to $894 million, from $790.2 million in the prior year period.  

“We’re happy with the continued forward momentum of the firm,” says Robert Moore, LPL Financial’s chief financial officer. “We posted great results, but we remain vigilant and humble.”

Moore noted that during the quarter, total advisory and brokerage assets hit $340.8 billion, a record for the Boston-based firm. Net new advisory assets were $3.1 billion during the quarter, driving total advisory assets under management to a record $103.2 billion.

“We like that the increase is from organic growth, rather than an increase in assets due to market appreciation,” Moore said. “We added 594 new advisors during the 12 months ending June 30. We’re also pleased with the level of engagement our advisors have achieved, and continue to achieve, with their clients.”

Advisory-related company statistics for the quarter include:

  • Total advisory and brokerage assets hit a record $340.8 billion as of June 30, up 23.1% compared to $276.9 billion for the same period last year.
  • Advisory assets in the company's fee-based platforms were $103.2 billion at June 30, up 30.8% from $78.9 billion for the same period last year.
  • Net new advisory assets were $3.1 billion during the three months ended June 30, compared to $2.4 billion for the three month periods ended June 30, 2010, “primarily as a result of new business development and mix shift toward more advisory business.”
  • Asset-based fees increased by 16.9% due to growth in record-keeping, omnibus processing and other administrative fees.
  • Approximately 80% of the increase in commission revenue was from increased sales activity, with the remainder due to increases in market levels.  

LPL Financial points to the completion of its secondary offering of 6.2 million shares of its common stock on April 26. It also noted that on June 22, the company closed the acquisition of trust and brokerage business Concord Capital Partners, which it says has over $10 billion in assets under administration.

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