LPL Beats Earnings Estimates as Profits Fall 5%

“Commissions and advisory fees, as well as sponsor revenues, were up sequentially, and we are staying disciplined on expenses,” he said in a statement. “Looking forward to the second half of the year, we are focused on maintaining balance sheet strength, delivering good results and creating value for shareholders. We are also tightening our 2016 Core G&A outlook range to $705 to $715 million. This is a reflection of our hard work on productivity and efficiency this year.”

Advisor commissions were $446 million, up 2% from the prior quarter. According to LPL, this increase was mostly driven by higher trailing commissions, though sales commissions also increased. Advisory fees were up by 1% from the prior quarter to $323 million. Asset-based fees were also up by 1% sequentially at $138 million. Transaction and fee revenues decreased about 1% from the prior quarter to $102 million, which LPL says is due to lower transaction volumes.

Average production per LPL advisor is $217,000, which is down 10% from a year ago but up 1% from the prior quarter.

Core general and administrative expenses were down $7 million sequentially to $168 million in the second quarter of 2016. According to LPL, this was driven by ongoing expense management efforts, which kept most costs flat, along with a seasonal decline in compensation-related expenses.

Regulatory expenses for the second quarter of 2016 were $6 million, which was up $4 million sequentially.

“The majority of the difference was due to recoveries from prior matters that provided a $3 million benefit in the first quarter which did not recur,” the company said in a statement. “First half 2016 regulatory expenses of $7 million are meaningfully below first half 2015 levels of $18 million.”

— Check out LPL Says Assets Up in May, Clarifies FSI Departure News on ThinkAdvisor.