LPL Financial beats expected earnings helped by record $26B recruitment assets

The third quarter delivered some new records for LPL Financial and expectation-beating earnings.

The firm reported its results late Wednesday revealing that net Income was $255 million, translating to diluted earnings per share of $3.39, up 16% from a year ago. Adjusted EPS was $4.16, beating the consensus expectation by 44 cents.

Among the records achieved were LPL’s best quarter ever for recruited assets, with the exception of those quarters where large institutions were onboarded. The firm saw $26 billion in recruited assets in Q3.

Advisor count was also at a new high with a headcount of 23,686 having added 224 in the quarter and a total 1,282 year-over-year.

Organic growth was strong with net new assets gaining $27 billion or 7% annualized, and total assets were at a record high of $1.6 trillion, a 26% rise from a year earlier.

Understandably, new CEO Rich Steinmeier is delighted with the latest results.

“I joined LPL with the mandate to accelerate our growth, and for the past six years, have worked closely with Matt Audette and the rest of our leadership team, to set our strategic vision, and to build and execute on the plan to achieve that vision,” he said. “Looking forward, our opportunity is clear – to assert our leadership and shape both the advisor and institutional markets.”

Among the core general and administrative expenses in the third quarter were costs related to Atria and Prudential, resulting in a range of $1,510-1,525 million. LPL successfully closed its acquisition of New York based Atria Wealth Solutions earlier this month.

The firm’s results noted that the onboarding of the retail wealth management business of Prudential is on track to take place during the fourth quarter of 2024. Its M&A activity this year has also included a definitive agreement to acquire New Jersey based hybrid RIA The Investment Center with the transaction expected to close in the first half of 2025.

Among the other notes in the earnings report were LPL Financial’s plan to resume its share repurchase program in Q4 2024, with an estimated $100 million of repurchases planned during the fourth quarter.

The firm’s CFO, Matt Audette spoke about the strength of the firm’s position.

“Specific to the third quarter, we delivered strong organic growth in both our traditional and new markets. As a complement, we announced our acquisition of The Investment Center, and early in the fourth quarter we closed our acquisition of Atria. As we look ahead, we remain excited by the opportunities we have to serve and support our advisors, while continuing to deliver an industry leading value proposition.”