LPL aims to boost profit through Uvest integration

Mar 20, 2011 @ 12:01 am

By Bruce Kelly

LPL Investment Holdings Inc. expects to save up to $12 million next year by moving brokers in its subsidiary Uvest Financial Services Group Inc. to LPL's proprietary clearing platform.

The company announced the move last Monday in a statement. About 500 representatives and advisers are affiliated with Uvest, a broker-dealer that primarily serves financial institutions such as banks and credit unions.

“We expect this integration will improve our company's pretax profitability by approximately $10 million to $12 million per year, beginning in 2012, through operational efficiencies and revenue opportunities,” said Michael Herley, a spokesman for LPL.

Uvest currently clears its brokers' trades through Pershing LLC, the industry's biggest clearing firm.

One securities analyst likes LPL's move to consolidate operations.

In a note to clients, Citigroup Inc.'s William Katz said that such efficiency moves should increase pretax income by roughly 6 cents a share on an after-tax basis.

Citigroup is maintaining its earnings-per-share forecast for LPL in 2011 at $1.74 a share. But the bank is raising its earnings-per-share expectations for the broker-dealer by 6 cents to $2.20 a share next year.

“We are increasingly warming to the story and see the stock defensive to a further market correction,” Mr. Katz wrote in a note to clients. “However, we look for a better entry, given limited upside to our revised target and potentially aggressive consensus expectations.”

E-mail Bruce Kelly at bkelly@investmentnews.com.

0
Comments

What do you think?

View comments

Most watched

INTV

Young professionals see lots of opportunity to reinvent the advice experience

Members of the 2019 InvestmentNews class of 40 Under 40 have strategies to overcome the challenges of being young in a mature industry.

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

Target-date fund design may be wrong for retirees

Researchers suggest the funds don't adequately hedge against sequence-of-returns risk in retirement.

InvestmentNews' 2019 class of 40 Under 40

Our 40 Under 40 project, now in its sixth year, highlights young talent in the financial advice industry. These individuals illustrate the tremendous potential of those coming up in the profession. These stories will surprise, entertain, educate and inspire.

New Jersey fiduciary rule: Pressure leads to public hearing, comment deadline extension

Industry push results in chance to air grievances on July 17 and another month to present objections.

Galvin to propose fiduciary rule for Massachusetts brokers

The secretary of the commonwealth is proposing a fiduciary standard in response to an SEC investment-advice rule he views as too weak.

Summer reading recommendations from financial advisers

Here are some books that will keep you informed and entertained during summer's downtime

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print