LPL Financial’s parent company said Tuesday that the firm had net income of $26.1 million in the third quarter of 2010, or 26 cents a share, compared to a loss of $1.5 million, or 2 cents a share, in the third quarter of 2009.
The total number of financial advisors affiliated with the company as of Sept. 30, 2010, was 12,017, down slightly from 12,027 last year and 12,066 in the second quarter of 2010. This puts it behind Morgan Stanley, Bank of America-Merrill Lynch and Wells Fargo Advisors, but ahead of UBS-Americas.
LPL Financial, however, says it added 128 new financial advisors to its ranks in the past 12 months, excluding attrition in the fourth quarter of 2009 related to the consolidation of certain affiliates.
In addition, the firm does clearing, advisor platform and technology work for some 4,000 advisors affiliated with insurance companies. The company, led by CEO and Chairman Mark Casady (left), filed for its first public offering on June 4.
“Because the markets are so crazy, the number of advisors moving firms is down” across the broker-dealer industry, said Chip Roame, head of consultancy Tiburon Strategic Advisors, in a phone interview. “It’s just not a good time for advisors to tell their clients they’ve going to make a move.”
In addition, LPL Financial has been busy acquiring National Retirement Partners, which has about 350 advisors, for $27 million this summer, and further integrating advisors from the three Pacific-Life broker-dealers it bought in 2007 for $100 million.
“It’s not so bad that LPL isn’t boosting its FA headcount with more recruiting, since the firm may be spending its time and energy helping existing advisors do a better job,” Roame explained. Since the firm continues to boost profits, such a strategy may make more sense at this time, he adds.
The firm’s net revenue for the third quarter increased 8.2% to $760.0 million from $702.3 million in the year-ago quarter. The company said it had strong growth in its fee-based and asset-based revenues, combined with modest growth in commission and transaction based fees.
Net revenue in the latest quarter, however, was down from second-quarter net sales of $790 million.
For the first nine months of 2010, net revenue increased 13.8% to $2.3 billion, while net income was up 106.4% to $59.7 million.