During LPL Financial’s first earnings conference call for analysts on Tuesday, CEO Mark Casady reiterated the company’s plans to add an average of 400 new representatives a year to its advisor ranks, which at year-end totaled 12,444, noting that it had fallen short of that goal in 2010 when it added a net 288 advisors due to broader economic conditions.
Responding to a question from an analyst on whether LPL had lost any reps going RIA to Schwab Advisor Services, Casady (left) said LPL had lost no advisors to Schwab. In fact, he said, LPL’s RIA custodial platform had “won” three advisors from Schwab in both 2009 and 2010 to its custody platform, which by year-end could count $13 billion assets, up from $7.33 billion at year-end 2009.
“No one has an offering like LPL,” Casady said, referring to its broker-dealer, clearing and RIA custody platform. “Raymond James has a clearing operation and is a strong company that does many things well,” Casady (left) said, “but it’s not integrated.”
CFO Robert Moore said in a separate interview with AdvisorOne on Tuesday that the RIA custodial platform served to both retain current LPL advisors and attract new advisors. “We started at zero in the fourth quarter of 2008” on the platform, he pointed out, and that in addition to its strong growth, the initiative was “representative of our capabilities,” noting that the company brought in $8.5 billion in net new advisory assets in 2010.
Providing more insight into LPL’s quarterly and annual results (see separate story on its results announced late Monday), Moore said that one-time charges of $241 million for the year were attributable to LPL going public, which it did on Nov. 18, 2010. The great majority of those one-time charges—$220 million—was expense related to the conversion of restricted shares to common stock for LPL advisors under a long-standing compensation plan. There was also $6 million in one-time charges, Moore said, in employee taxes related to the exercise of certain stock option grants, plus legal, audit and printing expenses.
There are ongoing financial benefits to the company from going public, Moore pointed out in the presentation, including net cash proceeds to LPL of $37.2 million and tax benefits totaling $237.3 million.
In the analysts’ presentation, Casady highlighted that net revenue for the company was up nearly 12% for the year, driven by “double-digit growth” in advisory fees,