LPL to Buy a $40B Branch Office With 800 Advisors

As of Sept. 30, LPL worked with close to 21,000 financial advisors, about 1,100 institution-based investment programs and some 500 RIA firms. 

Its total advisory and brokerage assets fell 8% year over year to $1.04 trillion, as advisory assets dropped 9% year over year to $543 billion. But its third-quarter earnings were $232 million (or $2.86 per share) vs. $103 million (or $1.26 per share) in the year-ago quarter and $161 million (or $1.97) per share in the prior quarter.

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On LPL’s Oct. 27 earnings call with equity analysts, President & CEO Dan Arnold emphasized the growth of assets tied to clients like banks and credit unions: The firm has “collectively added roughly between $65 billion and $70 billion in large financial institution assets over the last couple of years and continue to see strong momentum in the demand for the solution or the offering, which really … introduced a new concept into an outsourcing model … into the marketplace.”

As the firm has “added these larger institutions, we continue to innovate both in terms of how we support them day in and day out, and also just as importantly, how you transition them over. That’s a pretty big change-management effort, as you could imagine,” he explained. Over the past few years, LPL continues “to make our model more and more appealing.”

As for recent momentum with large financial institutions, Arnold said, “over the past two quarters, we onboarded two new clients, CUNA and People’s United Bank.”

The firm is “still very optimistic [about the] growing durability around the growth opportunity” in the institutional channel and has “a good solid pipeline. And though these deals are a little bit harder to predict in terms of the timing because they’re a longer sales cycle, [we] feel good that we have [an] opportunity to continue the momentum,” Arnold added.