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Technology > Investment Platforms > Turnkey Asset Management

Arnold Lays Out ‘Large Agenda’ for LPL’s Service Model

By Janet Levaux

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LPL Financial President and CEO Dan Arnold

LPL Financial’s latest quarterly earnings beat analysts’ estimates, coming in at $120 million, or $1.36 per share, for the period ending Dec. 31, 2018, versus $64 million, or $0.69 per share, for the year-ago quarter.

Revenues of $1.32 billion, though, missed expectations by about $40 million; they were up about 18% from a year ago, but down slightly from the prior quarter.

More significant, though, is the fact that the number of net new LPL advisors dropped by 65 for the quarter to 16,109, excluding registered reps brought on via acquisitions, and fell 42 for the year, according to a report by analyst Chris Shutler of William Blair

But President and CEO Dan Arnold, speaking with equity analysts late Thursday, said the independent broker-dealer had a plan. “Looking ahead, we have a large agenda for our service model,” he explained.

The IBD aims to roll out a “customer care model … where our advisors can get answers to their questions using a variety of different service channels and methods.”

The new model will rely on artificial intelligence and other digital solutions, a case management system rather than a call-center model, and direction provided by recent hire Dayton Semerjian, the firm’s new chief customer care officer as of Feb. 28. Semerjian is joining from CA Technologies (formerly Computer Associates) and earlier was with Intel and Oracle.

“We’re taking a structured approach by instilling a client-centric mindset, logic-based thinking and mission-driven alignment,” Arnold added.

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Recruited assets for 2018 totaled $27.3 billion, up 9% from 2017. It includes $8.6 billion of recruited assets in Q4. Net new assets for 2018 were $14.3 billion and $5.9 billion for the most recent quarter.

Total brokerage and advisory assets were $628 billion as of Dec. 30, 2018, vs. $615 billion a year earlier and $681 billion in Q3.  

Shutler gave a somewhat muted reaction in a note on Friday: “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.”

Janet Levaux

@Think_JanetL

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