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LPL Tops $1T in Assets and 19,000 Advisors: Q2 Earnings

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What You Need to Know

  • LPL Financial surpassed $1 trillion in assets for the first time during the second quarter.
  • The firm's net income also increased year over year, and it completed its acquisition of Waddell & Reed.
  • CEO Dan Arnold attributes the strong asset growth to its onboarding of Waddell & Reed and other firms.

In the second quarter, LPL Financial’s total assets topped $1 trillion for the first time, rising 46% from $762 billion a year ago to hit $1.11 trillion.

The firm also reported that its advisor headcount surpassed 19,000 advisors to end the period at 19,144, up 13% from just under 17,000 a year ago and up 8% from roughly 17,700 in the prior quarter. The number of net new advisors in Q2 was 1,442, including more than 900 advisors from Waddell & Reed and 200-plus advisors from M&T Bank.

LPL also reported a 17% year-over-year jump in net income, which was $119 million in Q2. Earnings per share rose 15% to $1.46 per share, topping analysts’ estimates. Revenues for the latest period were $1.9 billion, an increase of 39% from a year ago.

“This [asset] increase was primarily driven by continued organic growth, our Waddell & Reed acquisition and equity market appreciation,” said president & CEO Dan Arnold in his prepared remarks about the firm’s latest results, which were released late Thursday.

“Our continued growth in recruited assets, including new quarterly and full year highs, reflects our ongoing progress on enhancing the appeal of our model and expanding our addressable markets during the quarter,” Arnold explained.

In Q2, LPL added $106 billion in net new assets, of which about $69 billion came from its recent purchase of Waddell & Reed’s wealth management business, which closed on April 30. Assets from recruited advisors were roughly $35 billion in Q2 and $80 billion form the past 12 months. Net new assets from existing advisors were $37 billion in Q2. 

“We delivered another quarter of strong results,” said CFO Matt Audette. “We drove new highs for assets and organic growth while also completing the onboarding of BMO, M&T and Waddell & Reed. Looking ahead, our business momentum and financial strength position us well to continue serving our clients, growing our business, and creating long-term shareholder value.”

Also in the second quarter, LPL’s Business Solutions subscriptions rose by about 2,100, which is up 400 from the first quarter of 2021 and more than double the level of a year ago. Annualized revenue from this unit grew by roughly $20 million, up 54% from the same period last year.

Separately, LPL said Friday that its interim technology head, Greg Gates, has been named chief technology and information officer. Gates took the reins from Scott Seese in February.

 (Pictured: LPL Financial President & CEO Dan Arnold)