Updated Thursday, 12:45 p.m.
LPL Financial posted strong revenue growth, but profit declined slightly, as the firm encountered higher expenses in the first quarter.
The firm remained above the $1 billion revenue mark, bringing in $1.08 billion for the quarter, up from $975,000 in the year-earlier quarter, but earnings fell slightly to $53 million from $54.8 million in the first quarter last year.
The firm said the slide in profit was a result of higher expenses, which rose 13% to $987,044 from $848,874 a year ago.
Commission and advisory expenses rose 12.9% to $744 million in the quarter.
The firm also recorded a $5.3 million charge related to rent and maintenance expenses from the relocation of its San Diego headquarters to a new office.
LPL also reported that regulatory fees were up 6% from the first quarter of last year. The firm spent $8.4 million in the quarter, up from $7.9 million a year ago.
Recruiting expenses also rose as upfront loans provided to past newly recruited practices or financial institutions continued to amortize. The charges reported in the first quarter were $7.3 million, up 62% from $4.5 million a year ago.
The firm had 13,726 financial advisers at the end of the quarter.
The firm added a net 53 advisers in the quarter, more than twice what it added in the first quarter of last year but well shy of the 110 gained last quarter.
LPL reported a net increase of 349 advisers from March 31, 2013, to March 31 this year. That number comes in just shy of the firm's stated goal of adding 400 to 500 advisers per year, but is not surprising since the firm warned that
bad weather had slowed down its prospecting in the first three months of the year.
The firm also lost 40 advisers due to the departure of an affiliated bank, according to a presentation made by executives at the Bernstein Financial Summit Conference in early March.
Despite the slowdown, the firm reported solid asset growth and higher commissions per adviser.
Total advisory and brokerage assets were $447.1 billion, up 13% from $394 billion in the year-earlier quarter. The firm said it added $4.4 billion advisory assets last quarter from new accounts and deposits into existing accounts.
Annualized commission per adviser rose to $156,000 last quarter from $145,000 a year ago.
Commission per adviser declined from $163,000 in the fourth quarter, however. Part of that sequential decline was attributable to lower commissions from alternative investments, executives said on a conference call with investors and analysts. Alternative sales commission were near $60 million for first quarter compared with closer to $80 million in the fourth quarter last year.
An earlier version of this story inaccurately described recruiting costs for LPL in the firsts quarter. The figure cited represents the amortizable amount of forgivable loans or recoverable advances that are charged to earnings in the quarter. This transition assistance represents payments to newly recruited advisers.
