LPL Financial, a recruiting powerhouse, said today it lost nearly 100 advisers since the end of March, reducing its head count of brokers and advisers to 14,256.
That's down 98 from the end of the first quarter but an increase of 63 over the end of June 2016.
The adviser departures were anticipated and previously discussed,
the company said in its second quarter earnings release Thursday afternoon.
Excluding the advisers who left the firm, adviser count for the three months ending in June increased by just two, the company said in reporting its second quarter earnings.
Many broker-dealers last year saw strong recruiting results as advisers jockeyed for position in preparation for the Department of Labor's fiduciary standard rule. They were looking for firms well prepared to handle the rule and bolting from those who they believed were not getting ready.
LPL in February reported
that 2016 was its best recruiting year ever, adding 323 net financial advisers. It later revealed that it paid handsomely for those recruits.
As of the end of last year, LPL had a forgivable loan balance of $136.7 million on its books, according to its annual audited financial statement that was filed at the end of February with the Securities and Exchange Commission. That's an increase of 44.7% over 2015, when it reported $94.5 million in forgivable loans. And compared with 2014, when the forgivable loan balance was $68.6 million, it is nearly double.
Chief financial officer Matt Audette said on the company's earning call that, over the first six months of the year, LPL had seen 218 advisers with $5.6 billion in assets leave the firm, with LPL expecting those moves. The firm is also looking to reduce its office space in Boston as it continues to focus on costs.
Compared to the last quarter of 2016 and the first quarter of the year, recruiting was clearly down, said CEO Dan Arnold. He said he blamed "uncertainty" due to regulatory outlook, more specifically the DOL fiduciary rule.
"Fast forward to today, and there's been reduction in that uncertainty," Mr. Arnold said. "That's better for the pipeline. We feel good about growing via recruiting over the long term."
LPL Financial Holdings Inc., the broker-dealer holding company, reported 74 cents of earnings per share,
beating estimates by eight cents, according to Seeking Alpha, while its revenues of $1.07 billion beat estimates by $20 million.
