LPL Financial signs up 953 NPH advisers and $34.4 billion in assets

Broker-dealer says it is on track to bring over 70% of NPH revenue as part of its acquisition

Feb 1, 2018 @ 6:05 pm

By Bruce Kelly

LPL Financial Holdings Inc. reported Thursday that it was on track to hit its target of bringing over 70% of the revenue of National Planning Holdings, a company it acquired last year.

In its fourth-quarter earnings report, LPL did not report how much revenue it had brought over so far. However, it said it had brought over $34.4 billion in total brokerage and advisory assets and 953 eligible NPH advisers.

LPL announced in August that it bought the NPH broker-dealer network for $325 million from Jackson National, an insurance company. NPH was comprised of four firms with roughly 3,200 advisers and $120 billion in client assets.

As part of the deal, LPL agreed to pay Jackson National up to $123 million more based on the amount of revenue it brought over at the end of the transition. LPL is not assured that all of the NPH advisers are going to join the company.

In fact, over the past few months, there's been a scrum for NPH advisers. Three key LPL rivals, Commonwealth Financial Network, Cambridge Investment Research Inc. and Securities America Inc., were expected to pick up at least $100 million in revenue from NPH advisers, according to industry executives.

LPL expects to bring over $636.3 in revenue, or 70% of NPH's total.

The disparity between advisers joining LPL from NPH and the amount of revenues is to be expected. After a broker-dealer acquisition, adding advisers and revenue are two different lines of business. A smaller number of advisers are able to generate a larger amount of revenues because of the size of their individual or group practices.

LPL is bringng over NPH advisers in stages. The first wave of advisers came over from two NPH broker-dealers, National Planning Corp. and Investment Centers of America. Combined those two firms had 1,681 producing reps and advisers at the end of 2016, according to InvestmentNews data.

The second wave or group is comprised of advisers from Invest Financial Corp. and SII Investments. Combined, those firms had 1,591 advisers at the end of 2016. They are scheduled to move this month.

LPL reported net income of $64 million, or 69 cents per share, for the fourth quarter. That was a 52% increase from the same quarter in 2016, when LPL reported net income $42 million, or 46 cents per share.

"We delivered another solid quarter capping a year of consistent business and financial results," said Dan Arnold, president and CEO, in a press release. "We onboarded the first group of advisors from our NPH acquisition in December and the second group of advisors will join us in February."

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