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LPL Adds 385 FAs, $24B in Recruited Assets in Q1

By Alex Padalka April 30, 2021

LPL Financial added hundreds of advisors in the first quarter of 2021 and saw client assets soar year-over-year, but net income was down compared to the same quarter last year.

The company ended March with 17,672 financial advisors, or 385 more than it had at the end of 2020 and 909 more year-over-year, according to the company’s first-quarter earnings report.

“As we move into 2021, we remain focused on serving our advisors, growing our business and delivering shareholder value. This focus led to our highest quarter of organic growth in our history,” Matt Audette, LPL’s chief financial officer, says in a statement.

“We [are] also looking forward to onboarding three of our largest partners this year — BMO, M&T and Waddell & Reed — which collectively represent over $100 billion of assets to our platform,” he adds.

In October, LPL said that BMO Harris Financial Advisors plans to bring $14 billion in client assets to LPL’s platform. LPL says it ended up onboarding $15.2 billion in client assets from the deal, of which $11.8 billion transitioned during the first quarter and the rest expected to transition within the next few months.

In July, LPL announced that around $20 billion in client assets are coming from M&T Bank.

Waddell & Reed had around $63 billion in client assets when LPL announced its planned acquisition of the firm in December 2020, but that grew to around $70 billion by the end of the year. In its latest earnings report, LPL says that around 95% of Waddell & Reed’s advisors have committed to join LPL, with the deal expected to close as early as today.

In all, LPL says it saw $24 billion in recruited assets flow onto its platform in the first three months of 2021.That contributed to a trailing 12-month total of $56 billion, up 56% year-over-year, LPL adds.

LPL says its organic net new advisory assets in the first quarter totaled $23 billion, representing 19.7% annualized growth, while organic net new brokerage assets were $6 billion, which translates to 5.6% annualized growth.

As a result, total advisory and brokerage assets reached $958 billion by the end of March, a 43% increase year-over-year, according to the report.

LPL also saw its revenues grow around 17% year-over-year, posting $1.71 billion for the first quarter of 2021, according to the report.

Advisory revenues saw a 25% jump year-over-year, to $722.05 million, while asset-based revenues dropped 7%, to $264.71 million, LPL says.

Commission-based revenues rose 11%, to $557.23 million, and transaction and fee revenues inched up 3%, to $140.94 million, according to the report.

Total operating expenses also rose, however, to $1.49 billion, a 22% increase from the first quarter last year, the company says.

As a result, LPL’s net income in the first three months of 2020 was $129.62 million, which topped the $111.55 million posted in the prior quarter but was still 17% lower year-over-year, according to the report.

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Tags:  Finding and winning new clients , Client retention , Fees and compensation , Staffing and recruiting , LPL Financial , M&T Bank , Waddell & Reed

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