LPL Financial’s parent company, LPLA, reported late Tuesday that fourth-quarter net income was $39.4 million and that revenue rose 1%, to $828.7 million. In 2010’s fourth quarter, LPL Investment Holdings reported a loss of $116 million, or $1.20 a share, due primarily to a $220 million charge taken in the fourth quarter that year related to its IPO in November 2010.
For all of 2011, LPL Investment Holdings reported net income of $170.4 million on an 11.8% increase in net revenue to $3.5 billion.
In an interview with AdvisorOne on Wednesday on the results, LPL CFO Robert Moore said, “The mix of business was quite constructive; reflecting the progress that our clients–advisors” have made. “We are a growth business,” Moore said, and while revenue was essentially flat in the fourth quarter, “there were heavier headwinds due to market volatility,” which led LPL reps to move clients away from trading and more into cash—and while “we actively managed our expense base, we did incur some expenses in new business development” efforts that would have a longer-term benefit to advisors and the company.
“We’re signaling clearly that we will, more often than not, opt for incurring the expense” of such programs, Moore said, despite keeping a sharp eye on expenses.
For the year, LPL added 549 net new advisors, the company said, excluding the attrition of 146 advisors that came from the conversion of the bank-focused division UVEST Financial reps onto LPL’s clearing platform that was completed in 2011.
When asked whether those new advisors came from wirehouses or other independent BDs, Moore answered, “All of the above.” While he said the company doesn’t disclose the “actual attribution across the various channels, yes, we are a positive attractor from across the industry,” including from insurance companies, other independents, from regional brokerages, and the wirehouses.” Moore suggested LPL will continue to see recruits from all those channels, but also that “we know how to move the value chain in terms of more complex practices.”