LPL doubles recruited assets in 2021

LPL Financial reported Thursday that it recruited advisers with $89 billion last year, more than double the amount — $42 billion — in the prior year.

The company also reported Thursday after the market close that in addition to assets from recruited advisers more than doubling, its affiliated registered reps and advisers reeled in net new assets last year of $119 billion, a 13% growth rate, up from 7% in 2020.

LPL's total advisory and brokerage assets increased 34% year-over-year to $1.21 trillion, the company reported.

Brokerage firms enjoyed an unusually strong 2021. The S&P 500 repeatedly hit record highs throughout the year and ultimately posted a total annual return, including dividends, of 28.7% — almost twice its annual median return of 15.4%.

That range of asset growth it saw over the past couple of years is what LPL, the largest independent contractor broker-dealer, has as its future target, CEO Dan Arnold said during a conference call with analysts Thursday to discuss financial results.

"If you think about our growth going forward, if you look at the last couple of years as a framework for that, you've got 7% growth in 2020 and 13% growth in 2021," Arnold said. "And those are probably pretty nice bookends as a way to think about a range of potential growth over the long run, or as we go forward."

Over the past few years, LPL has created a series of channels to target various types of advisers, including wirehouse advisers and those looking to establish registered investment advisory businesses.

"A lot of the recruiting success was the efficacy of the sales team, refining the way we went to the market and spoke with advisers," Rich Steinmeier, managing director and head of business development at LPL, said in an interview Friday. "We're also working with outside recruiters, and before 2018 we didn’t really do that."

He added that the new models targeted at wirehouse and so-called breakaway advisers, including sub-brands Linsco by LPL Financial and Strategic Wealth Services, brought in advisers with $2 billion in assets during the last three month of 2021.

"And all of those capabilities are growing and should perform better in the future," Steinmeier said.

LPL Financial also acquired net new assets of $71 billion in 2021 through mergers and acquisitions, the company reported. Of that amount, $34 billion were advisory assets and $37 billion were brokerage assets from LPL's purchase of the wealth management business of Waddell & Reed.

LPL's financial adviser head count at the end of December totaled 19,876, up 249, or 1%, compared to the end of September, and up 2,589, or 15% higher, compared to the end of 2020.