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12 Best & Worst Broker-Dealers: Q2 Earnings, 2022

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Related: Best & Worst Broker-Dealers: Q1 Earnings, 2022

The latest earnings season for the broker-dealer community wrapped up on Tuesday, when LPL Financial reported its second-quarter profits — which topped analysts’ estimates. 

“Amid persistent market volatility and geopolitical uncertainty, our advisors reinforced the value they provide to their clients by helping them navigate through [challenging] times,” LPL President and CEO Dan Arnold said during the firm’s earnings call. “In that spirit, I want to recognize our advisors for their continued care and dedication to their clients, especially when they need it most.”

In the second quarter, the S&P 500 declined 16.1%, is worst quarterly drop since the first quarter of 2020. This affected the level of client assets managed and administered by many BDs. For instance, LPL’s total clients assets decreased 4% year over year to $1.06 trillion in the quarter ending July 30.

Meanwhile, Raymond James said its Private Client Group assets dropped 3% to $1.07 trillion, but the firm’s advisor retention and recruiting efforts helped it grow net new client assets year over year in the second quarter by 9%.

“Despite sharp equity market declines in the quarter, which are expected to negatively impact asset-based revenues in the fiscal fourth quarter, we are well positioned for the expected continued rise in short-term interest rates,” Chair and CEO Paul Reilly said. “Our strong balance sheet provides flexibility in this challenging and uncertain market environment.”

As of late July, the financial sector reported the largest year-over-year earnings decline of the 11 sectors tracked by FactSet: 25%. “The financial sector is also the largest detractor to earnings growth for the S&P 500 for the second quarter,” according to the research firm. “If this sector were excluded, the blended earnings growth rate for the index would improve to 13.3% from 6.0%.”

Financial firms kick off the next earnings season on Oct. 13, when JPMorgan plans to report its third-quarter results.

(Image: Chris Nicholls/ALM)