LPL Financial reported a 10% year-over-year jump in its first-quarter adjusted earnings to $319 million, while its adjusted earnings per share increased more than 9% to $4.24 per share. But a significant portion of the earnings call Thursday focused on LPL’s $2.7 billion acquisition of Commonwealth Financial Network, announced in late March.
The results, released late Thursday, beat analysts’ estimates, and the stock was trading nearly 5% higher early on Friday.
During the call, CEO Rich Steinmeier pointed to a variety of efforts he and the LPL leadership team have made to get to know many of Commonwealth’s 2,900 advisors — including through wine tasting tours and "rain-soaked" bike rides in the desert in Scottsdale.
“I can’t underscore enough how honored we are to be partnering with the team at Commonwealth as we jointly engage with their advisors to articulate the power of combining our two firms,” Steinmeier said.
“I have personally had the good fortune of speaking with a number of Commonwealth advisors, and the more time I spend with them, the more I understand the power of this distinguished community,” he added.
Many of these advisors have worked together for decades, Steinmeier noted, supported by a highly responsive management team.
“That has cultivated a unique culture and family-like atmosphere,” he said. “I have the utmost conviction in the value of preserving and fostering the Commonwealth community. We remain steadfast in our commitment to delivering on this tremendous opportunity to bring together the best of two great firms.”
Steinmeier said LPL will “preserve Commonwealth’s industry-leading service experience,” which has ranked No. 1 in independent advisor satisfaction with J.D. Power for 11 consecutive years.
“We’ll build upon that with an upgraded best-of-breed platform, including more flexible technology, a more comprehensive product set, extensive research, and unique capabilities like LPL’s liquidity and succession offering,” he explained. “We are still in the early innings of the retention effort, but are tracking to our plan and in line with our expectations with respect to advisor commitments.”
Headcount Surge
As of March 31, the independent broker-dealer’s advisor headcount was 29,493, marking an increase of nearly 29% from the prior year thanks to solid recruiting performance and the integration of earlier acquisitions — including big teams from Prudential Advisors, Wintrust Investments and others.
Advisory and brokerage assets rose 25% from a year ago to $1.8 trillion; organic net new assets were $71 billion, representing 16% annualized growth.
“It’s been a strong start to the year for LPL,” Steinmeier said.
Recruited assets for the quarter ended March 31 were estimated at $39 billion, up 91% from a year ago. Recruited assets over the trailing 12 months were a record $167 billion.
“We accomplished this against a challenging operating backdrop with rising macroeconomic uncertainty,” Steinmeier said. “It’s periods like this that serve as a reminder of the value of professional advice, the importance of our responsibility to support our advisors, and the strength and resiliency of our business model.”
Pictured: Rich Steinmeier
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