LPL Nets 210 New Advisors in Q2 But Commissions, Fees Per FA Down 13%

By Alex Padalka July 31, 2020

LPL Financial says it had a successful second quarter growing its advisor ranks as well as client assets, but the company still saw a substantial drop in income.

LPL ended the second quarter of 2020 with $762 billion in total brokerage and advisory assets, a 14% gain from the prior quarter and an 8% increase year-over-year, according to the company’s second-quarter earnings report. 

Advisor assets grew by 16% to $375.3 billion in the second quarter of 2020, while brokerage assets rose by 11% to $386.4 billion, LPL says. Advisory assets made up 49.3% of the total assets in the second quarter of 2020, up from 48.1% in the prior quarter and 46.4% from a year prior, according to the report.

The company saw inflows of $13 billion in net new assets in the second quarter, which represents a 7.8% annualized growth rate, LPL says. Of those, $10.2 billion were in advisory assets, translating to a 12.7% annualized growth rate, and $2.8 billion were in brokerage assets, which translates to a 3.2% annualized growth rate, according to the report. 

Recruited assets in the second quarter made up $11.1 billion, LPL says.  

The company added 210 net new advisors in the latest quarter, bringing its ranks to 16,973 by the end of June, according to the report. That was 812 more advisors than the firm had a year ago, LPL says.

Average total assets per advisor also continued rising, reaching $44.9 million in the second quarter, up 12% from the prior quarter and up 3% year-over-year, according to the report.

LPL also says that it expects to onboard the advisors and assets of M&T Bank, with which LPL signed an agreement earlier this month, in the middle of 2021. M&T has around 170 advisors overseeing roughly $20 billion.

However, annualized commission and advisory fees per advisor dropped 13% in the second quarter, to $226,000, which was also 5% lower year-over-year, according to the report.

Furthermore, LPL’s net income in the second quarter was $101.7 million in the second quarter, down 35% from the prior quarter and down 30% year-over-year, the company says.

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