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LPL Boosts Profits 84%, Adds 125 Reps: Q3 Earnings

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LPL Financial President & CEO Dan Arnold speaks at the firm’s 2016 national event.

LPL Financial boosted its net income in the third quarter 84% from last year, reporting profits of $106.9 million, or $1.19 per share, vs. $58.1 million, or $0.63 per share, a year ago.

Revenue jumped 25% from last year to $1.33 billion. Of this, about $487 million was tied to commissions, $458 million to advisory fees and $249 to asset-based fees.

“Organic growth was solid, and momentum continued to build, driven by increased advisor recruiting, productivity and retention,” according to President and CEO Dan Arnold. “Looking forward, we remain focused on helping advisors win in the marketplace by enhancing capabilities, making it easier for advisors to do business with us, and investing in technology.”

In terms of asset growth by platform, the corporate platform saw year-over-year growth of 27% to about $185 billion, while the brokerage platform expanded 21% to $375 billion. LPL’s hybrid platform expanded 15% to $121 billion.

Net new advisory asset flows were $5.9 billion on the corporate platform but -$0.8 billion on the hybrid platform. In the second quarter, hybrid asset flows were $0.6 billion, and in Q3’17, they were $2.9 billion.

As for net new advisors, 125 registered reps came on board in the latest quarter, giving the firm a headcount of 16,174. In the earlier quarter, the company had a net loss of 18 advisors, and in Q3’17, it reported a net loss of 3 reps.

In a research note on Friday, William Blair equity analysts summed up their view of the firm as follows: “We are encouraged by LPL’s progress and execution, but maintain our Market Perform rating for now as it feels like much of the low-hanging fruit has been picked (cost takeout, rate hikes, etc.) and the competitive and market environments are getting tougher.”

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