LPL hits target for attracting NPH assets

Independent broker-dealer says it has added $70.2 billion in net new assets as a result of the acquisition

May 3, 2018 @ 5:28 pm

By Bruce Kelly

In line with its prior guidance, LPL Financial Holdings Inc. said Thursday that total net new assets from its acquisition of the four National Planning Holdings broker-dealers totaled $70.2 billion.

LPL Financial, the broker-dealer, 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. LPL said about 1,900 NPH advisers had joined LPL.

Over the winter, LPL executives revised that asset figure down to $105 billion after subtracting $15 billion in advisory assets that were held with third-party asset managers or other custodians. In February, the company also said it was aiming to transfer $70 billion to $75 billion of total NPH reportable assets to its platform.

Those NPH assets could eventually climb to $75 billion, CEO Dan Arnold said on a first-quarter conference call with analysts on Thursday afternoon.

LPL moved the NPH advisers to LPL in two waves, first in December and then in February.

Meanwhile, LPL reported an almost doubling of its earnings per share for the first three months of 2018. For the first quarter of 2018, the company reported net income of $94 million or $1.01, per share. In the same period last year, LPL reported $48 million of net income, or 52 cents per share.

On Wednesday, LPL Financial and North American Securities Administrators Association said they reached a settlement that could total as much as $26 million when it is eventually closed. Under terms of the settlement, LPL also has agreed to repurchase from investors securities held in LPL accounts determined to have been unregistered, non-exempt equity or fixed-income securities sold since Oct. 1, 2006.

Mr. Arnold said on the Thursday call that the securities in the settlement represented a small part of LPL's business, and the firm was focused on offering remediation to clients. The company also expects insurance to cover a portion of the costs of the settlement.

The firm reported 16,067 advisers at the end of March, a 12% increase compared with the same period a year earlier, driven primarily by advisers coming over from NPH.

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