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IBDs Post Mixed Results

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LPL Financial’s net income in the period ending March 31 fell about 3% year over year to $53.1 million, though net revenue jumped close to 12% to nearly $1.1 billion. Adjusted earnings, though, rose 4% to $71 million, or $0.69 per share. Higher costs and lower recruiting results in the period were cited as reasons for the recent performance, and the company’s executives are upbeat on results for the rest of 2014.

The independent broker-dealer’s core general and administrative expenses were $162 million, up 11% year over year (but down 3% sequentially). Also during the quarter, the company’s payout ratio to advisors grew 38 basis points to 86.4%.

The company has 13,726 affiliated advisors, up from 13,673 in Q4’13 and 13,377 in Q1’13. Advisory and brokerage assets rose to $447.1 billion, a 13.5% year-over-year increase, in the latest period.

Average fees and commissions per rep are about $252,000 vs. $254,000 in the prior period and $230,000 a year earlier. Average commissions as of Q1’14 stood at $156,000; excluding alternatives, this figure is $152,000, which represents a 4% jump from last year and a 1% increase from the prior period.

Assets under custody on its independent-RIA platform grew nearly 50% to $69.6 billion from $46.7 billion last year. These results include 265 independent RIA firms, compared with 199 independent RIA firms 12 months earlier.

The company says its fee-based business generated $4.4 billion in net new advisory assets. Average assets managed by advisors jumped 13.5% to $33 million per rep vs. $29.5 million a year ago.


Ameriprise Financial reported first-quarter net income of $401 million, or $2.01 per share, up 19% from $336 million, or $1.58, a year ago. Operating net revenues increased 8% year over year to $2.8 billion, driven in part by strong fee-based business growth from client net inflows and increased client activity, the company says.

The number of advisors in the group totals 9,704—down 12 from the prior quarter and 73 from a year ago: 2,155 reps are employee advisors, while the remaining 7,549 are independent.

Average annualized fees and commissions per advisor stood at $454,000, a jump of 15% from last year’s $395,000. Mutual fund wrap flows for the wealth group were $4.2 billion vs. $4.1 billion a year ago.

Pre-tax operating earnings from the Advice & Wealth Management and Asset Management units grew 36% to $364 million. Wealth management results expanded 39% to $181 million on sales of $1.15 billion, up 13% from a year ago. The unit’s pre-tax margin rose to 15.8% from 12.8% in the first quarter of 2013.

Raymond James

Raymond James Financial reported net income of $104.6 million, or $0.72 per share, in the quarter ended March 31—up 31% from a year ago. Revenue was $1.2 billion, a 3% jump from a year ago and basically flat with last quarter.

The firm’s Private Client Group reported a 44% jump in pre-tax profits from a year ago and an 8% sequential jump to $77.1 million. PCG revenue totaled $814.7 million, a 12% year-over-year gain and a 5% jump from the prior quarter.

Total assets under administration for PCG as of March 31 were $434 billion for the unit. Fee-based assets reached $158 billion, or close to 37% of client assets.

The total number of advisors in the PCG stood at 6,202 as of March 31 vs. 6,178 on Dec. 31 and 6,165 a year ago. The firm’s U.S.-based independent channel includes about 3,288 FAs, while its U.S.-based employee channel has 2,438.