LPL Financial Announces Fourth Quarter and Full Year 2022 Results
Fourth Quarter 2022 Key Financial Results
Net Income was $319 million, translating to diluted earnings per share ("EPS") of $3.95, up 199% from a year ago
EPS prior to amortization of intangible assets and acquisition costs* increased 158% year-over-year to $4.21
Gross profit* increased 51% year-over-year to $972 million
Core G&A* increased 9% year-over-year to $327 million
EBITDA* increased 137% year-over-year to $533 million
Fourth Quarter 2022 Key Business Results
Total advisory and brokerage assets decreased 8% year-over-year to $1.11 trillion
Advisory assets decreased 9% year-over-year to $583 billion
Advisory assets as a percentage of total assets decreased to 52.5%, down from 53.3% a year ago
Total organic net new assets were $21 billion, representing 8% annualized growth
Organic net new advisory assets were $13 billion, representing 9% annualized growth
Organic net new brokerage assets were $9 billion, representing 7% annualized growth
Recruited assets(1) were $15 billion
Recruited assets for the year were $82 billion, down approximately 8% from a year ago
LPL Services Group had annualized revenue of $36 million in Q4, up 27% from a year ago
Services Group subscriptions were 4,479 at the end of Q4, up 1,457 year-over-year
Advisor count(2) was 21,275, up 231 sequentially and 1,399 year-over-year
Total client cash balances were $64 billion, a decrease of $3 billion sequentially and an increase of $7 billion year-over-year
Client cash balances as a percentage of total assets were 5.8%, down from 6.4% in the prior quarter, and up from 4.7% a year ago
Fourth Quarter 2022 Key Capital and Liquidity Results
Corporate cash(3) was $459 million
Leverage ratio(4) was 1.39x
Share repurchases were $150 million and dividends paid of $20 million
Full Year 2022 Key Financial and Business Results
Net Income was $846 million, translating to diluted EPS of $10.40, up 85% from a year ago
EPS prior to amortization of intangible assets and acquisition costs* increased 64% year-over-year to $11.52
Gross profit* increased 30% year-over-year to $3.19 billion
Core G&A* increased 13% year-over-year to $1.19 billion
EBITDA* increased 63% year-over-year to $1.53 billion
Total organic net new assets were $96 billion, representing an 8% growth rate, down from 13% in 2021
Share repurchases were $325 million and dividends paid of $80 million
Key Updates
Enterprises:
Commerce Bank: Announced an agreement with Commerce Bank to transition support of Commerce Financial Advisors to LPL's Institution Services platform, expected to onboard around mid-year. Commerce supports ~30 financial advisors who collectively serve ~$4.4 billion of brokerage and advisory assets**.
M&A:
Boenning & Scattergood: In January 2023, closed on the acquisition of the Private Client Group business of Boenning & Scattergood, a firm with ~30 financial advisors who serve ~$4 billion of brokerage and advisory assets
Financial Resources Group Investment Services ("FRGIS"): In January 2023, closed on the acquisition of FRGIS, an LPL branch office supporting ~800 financial advisors and 85 financial institutions, serving ~$40 billion of brokerage and advisory assets
Debt Rating: Moody's upgraded LPL to an investment grade rating (Baa3) on November 14, 2022
Core G&A*:
2022 Core G&A* was $1,192 million, which translates to a 13% growth rate year-over-year, and was within our outlook range of $1,185 million to $1,195 million
In 2023, the environment is creating an opportunity to accelerate investments to advance our strategic priorities. Accordingly, we plan to grow 2023 Core G&A* at a similar rate to 2022. Our 2023 Core G&A* outlook range is ~12% to ~15% year-over-year growth, or $1,335 million to $1,370 million
Capital Management:
Share repurchases: increased Q4 2022 repurchases to $150 million and plan to further increase in Q1 2023 to $250 million
Dividend: increasing quarterly cash dividend by 20% to $0.30 per share beginning in Q1 2023
SAN DIEGO, Feb. 02, 2023 (GLOBE NEWSWIRE) -- LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”) today announced results for its fourth quarter ended December 31, 2022, reporting net income of $319 million, or $3.95 per share. This compares with $108 million, or $1.32 per share, in the fourth quarter of 2021 and $232 million, or $2.86 per share, in the prior quarter.
"In 2022, we remained focused on our mission of taking care of our advisors, so they can take care of their clients,” said Dan Arnold, President and CEO. “This focus drove continued business growth, market share gains, and solid financial results. As we look ahead, we continue to strive to be the best at empowering advisors – to deliver great advice to their clients and to be great operators of their businesses.”
“Looking at 2022, we are proud of what we accomplished within our framework for driving long-term shareholder value,” said Matt Audette, CFO. “We continued to grow assets organically in both our traditional and new markets, successfully onboarded new enterprise clients, announced two strategic acquisitions, and developed our new liquidity & succession capability, including closing on our first few transactions. Going forward, our business momentum and financial strength position us well to continue creating long-term shareholder value.”
*See the Non-GAAP Financial Measures section and the endnotes to this release for further details about these non-GAAP financial measures.
**Estimates are based on prior business reported by Commerce, which has not been independently and fully verified by LPL Financial.
Dividend Declaration
The Company's Board of Directors declared a $0.30 per share dividend to be paid on March 28, 2023 to all stockholders of record as of March 14, 2023.
Conference Call and Additional Information
The Company will hold a conference call to discuss its results at 5:00 p.m. ET on Thursday, February 2. The conference call will be accessible at investor.lpl.com/events, with a replay available until February 23.
Contacts
Investor Relations
investor.relations@lplfinancial.com
(617) 897-4574
Media Relations
media.relations@lplfinancial.com
(980) 321-1232
About LPL Financial
LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve(5), serving more than 21,000 financial advisors, including advisors at approximately 1,100 enterprises and at approximately 500 registered investment advisor ("RIA") firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that investors deserve access to personalized guidance from a financial advisor. We believe advisors should have the freedom to choose the business model, services and technology they need and to manage their client relationships. Simply put, we take care of our advisors, so they can take care of their clients.
LPL and its affiliated companies provide financial services only from the United States.
Securities and Advisory services offered through LPL Financial LLC ("LPL Financial"), an SEC-registered broker-dealer and investment advisor. Member FINRA/SIPC. We routinely disclose information that may be important to shareholders in the "Investor Relations" or "Press Releases" section of our website.
Forward-Looking Statements
This press release contains statements regarding:
the amount and timing of the onboarding of acquired or recruited brokerage and advisory assets;
the Company's future financial and operating results, growth, priorities and business strategies, including forecasts and statements relating to future expenses (including 2023 Core G&A* outlook); and
future capabilities, future advisor service experience, future investments and capital deployment, including share repurchase activity and dividends, if any, and long-term shareholder value.
These and any other statements that are not related to present facts or current conditions, or that are not purely historical, constitute forward-looking statements. They reflect the Company's expectations and objectives as of February 2, 2023 and are not guarantees that expectations or objectives expressed or implied will be achieved. The achievement of such expectations and objectives involves risks and uncertainties that may cause actual results, levels of activity or the timing of events to differ materially from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include:
difficulties and delays in onboarding the assets of acquired or recruited advisors;
disruptions in the businesses of the Company that could make it more difficult to maintain relationships with advisors and their clients;
the choice by clients of acquired or recruited advisors not to open brokerage and/or advisory accounts at the Company;
changes in general economic and financial market conditions, including retail investor sentiment;
changes in interest rates and fees payable by banks participating in the Company's client cash programs, including the Company's strategy and success in managing client cash program fees;
changes in the growth and profitability of the Company's fee-based offerings;
fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenues;
effects of competition in the financial services industry and the success of the Company in attracting and retaining financial advisors and enterprises;
whether the retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company;
the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations;
the costs of settling and remediating issues related to regulatory matters or legal proceedings, including actual costs of reimbursing customers for losses in excess of our reserves;
changes made to the Company’s services and pricing, and the effect that such changes may have on the Company’s gross profit streams and costs;
the execution of the Company's plans and its success in realizing the synergies, expense savings, service improvements and efficiencies expected to result from its initiatives, acquisitions and programs; and
the other factors set forth in the Company's most recent Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or other filings with the Securities and Exchange Commission.
Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this earnings release, and you should not rely on statements contained herein as representing the Company's view as of any date subsequent to the date of this press release.
LPL Financial Holdings Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
| Three Months Ended |
| Three Months Ended |
| |||||||
| December 31, | September 30, |
| December 31, |
| ||||||
|
| 2022 |
| 2022 |
| Change | 2021 | Change | |||
REVENUE |
|
|
|
|
| ||||||
Advisory | $ | 902,440 | $ | 923,766 |
| (2 | %) | $ | 997,338 | (10 | %) |
Asset-based: |
|
|
|
|
| ||||||
Client cash |
| 419,215 |
| 294,993 |
| 42 | % |
| 82,109 | n/m |
|
Other asset-based |
| 191,797 |
| 194,270 |
| (1 | %) |
| 219,931 | (13 | %) |
Total asset-based |
| 611,012 |
| 489,263 |
| 25 | % |
| 302,040 | 102 | % |
Commission: |
|
|
|
|
| ||||||
Trailing |
| 311,194 |
| 315,087 |
| (1 | %) |
| 364,455 | (15 | %) |
Sales-based |
| 271,089 |
| 269,893 |
| — | % |
| 248,382 | 9 | % |
Total commission |
| 582,283 |
| 584,980 |
| — | % |
| 612,837 | (5 | %) |
Service and fee |
| 120,022 |
| 121,745 |
| (1 | %) |
| 110,385 | 9 | % |
Transaction |
| 46,790 |
| 43,328 |
| 8 | % |
| 39,306 | 19 | % |
Interest income, net |
| 37,168 |
| 22,092 |
| 68 | % |
| 7,780 | n/m |
|
Other |
| 33,472 |
| (22,116 | ) | n/m |
|
| 24,506 | 37 | % |
Total revenue |
| 2,333,187 |
| 2,163,058 |
| 8 | % |
| 2,094,192 | 11 | % |
EXPENSE |
|
|
|
|
| ||||||
Advisory and commission |
| 1,341,743 |
| 1,304,528 |
| 3 | % |
| 1,431,157 | (6 | %) |
Compensation and benefits |
| 223,952 |
| 208,051 |
| 8 | % |
| 209,630 | 7 | % |
Promotional |
| 80,455 |
| 94,510 |
| (15 | %) |
| 87,743 | (8 | %) |
Occupancy and equipment |
| 58,144 |
| 54,636 |
| 6 | % |
| 47,800 | 22 | % |
Depreciation and amortization |
| 54,241 |
| 51,669 |
| 5 | % |
| 40,816 | 33 | % |
Interest expense on borrowings |
| 37,082 |
| 33,186 |
| 12 | % |
| 27,121 | 37 | % |
Amortization of other intangibles |
| 22,542 |
| 22,654 |
| — | % |
| 20,373 | 11 | % |
Professional services |
| 19,336 |
| 16,871 |
| 15 | % |
| 18,384 | 5 | % |
Brokerage, clearing and exchange |
| 19,251 |
| 20,850 |
| (8 | %) |
| 20,372 | (6 | %) |
Communications and data processing |
| 18,525 |
| 17,812 |
| 4 | % |
| 15,549 | 19 | % |
Other |
| 38,697 |
| 31,557 |
| 23 | % |
| 38,688 | — | % |
Total expense |
| 1,913,968 |
| 1,856,324 |
| 3 | % |
| 1,957,633 | (2 | %) |
INCOME BEFORE PROVISION FOR INCOME TAXES |
| 419,219 |
| 306,734 |
| 37 | % |
| 136,559 | n/m |
|
PROVISION FOR INCOME TAXES |
| 100,137 |
| 74,403 |
| 35 | % |
| 28,478 | n/m |
|
NET INCOME | $ | 319,082 | $ | 232,331 |
| 37 | % | $ | 108,081 | 195 | % |
EARNINGS PER SHARE |
|
|
|
|
| ||||||
Earnings per share, basic | $ | 4.01 | $ | 2.91 |
| 38 | % | $ | 1.35 | 197 | % |
Earnings per share, diluted | $ | 3.95 | $ | 2.86 |
| 38 | % | $ | 1.32 | 199 | % |
Weighted-average shares outstanding, basic |
| 79,483 |
| 79,805 |
| — | % |
| 80,064 | (1 | %) |
Weighted-average shares outstanding, diluted |
| 80,875 |
| 81,250 |
| — | % |
| 81,744 | (1 | %) |
LPL Financial Holdings Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
| Years Ended |
| |||||
| December 31, |
| |||||
|
| 2022 |
|
| 2021 | Change | |
REVENUE |
|
|
| ||||
Advisory | $ | 3,875,154 |
| $ | 3,525,430 | 10 | % |
Commission: |
|
|
| ||||
Trailing |
| 1,292,358 |
|
| 1,404,628 | (8 | %) |
Sales-based |
| 1,033,806 |
|
| 974,055 | 6 | % |
Total commission |
| 2,326,164 |
|
| 2,378,683 | (2 | %) |
Asset-based: |
|
|
| ||||
Client cash |
| 953,624 |
|
| 360,847 | 164 | % |
Other asset-based |
| 806,649 |
|
| 787,220 | 2 | % |
Total asset-based |
| 1,760,273 |
|
| 1,148,067 | 53 | % |
Service and fee |
| 467,381 |
|
| 411,761 | 14 | % |
Transaction |
| 181,260 |
|
| 156,336 | 16 | % |
Interest income, net |
| 77,126 |
|
| 28,577 | 170 | % |
Other |
| (86,533 | ) |
| 71,976 | n/m |
|
Total revenue |
| 8,600,825 |
|
| 7,720,830 | 11 | % |
EXPENSE |
|
|
| ||||
Advisory and commission |
| 5,324,827 |
|
| 5,180,090 | 3 | % |
Compensation and benefits |
| 820,736 |
|
| 741,003 | 11 | % |
Promotional |
| 339,994 |
|
| 302,285 | 12 | % |
Occupancy and equipment |
| 219,798 |
|
| 185,531 | 18 | % |
Depreciation and amortization |
| 199,817 |
|
| 151,428 | 32 | % |
Interest expense on borrowings |
| 126,234 |
|
| 104,414 | 21 | % |
Amortization of other intangibles |
| 87,560 |
|
| 79,260 | 10 | % |
Brokerage, clearing and exchange |
| 86,063 |
|
| 86,023 | — | % |
Professional services |
| 72,519 |
|
| 73,231 | (1 | %) |
Communications and data processing |
| 67,687 |
|
| 60,296 | 12 | % |
Loss on extinguishment of debt |
| — |
|
| 24,400 | (100 | %) |
Other |
| 143,937 |
|
| 131,540 | 9 | % |
Total expense |
| 7,489,172 |
|
| 7,119,501 | 5 | % |
INCOME BEFORE PROVISION FOR INCOME TAXES |
| 1,111,653 |
|
| 601,329 | 85 | % |
PROVISION FOR INCOME TAXES |
| 265,951 |
|
| 141,463 | 88 | % |
NET INCOME | $ | 845,702 |
| $ | 459,866 | 84 | % |
EARNINGS PER SHARE |
|
|
| ||||
Earnings per share, basic | $ | 10.60 |
| $ | 5.75 | 84 | % |
Earnings per share, diluted | $ | 10.40 |
| $ | 5.63 | 85 | % |
Weighted-average shares outstanding, basic |
| 79,801 |
|
| 80,002 | — | % |
Weighted-average shares outstanding, diluted |
| 81,285 |
|
| 81,742 | (1 | %) |
LPL Financial Holdings Inc.
Consolidated Statements of Financial Condition
(In thousands, except share data)
(Unaudited)
| December 31, 2022 | September 30, 2022 | December 31, 2021 | ||||||
ASSETS | |||||||||
Cash and equivalents | $ | 847,519 |
| $ | 1,219,418 |
| $ | 495,246 |
|
Cash and equivalents segregated under federal or other regulations |
| 2,199,362 |
|
| 2,268,090 |
|
| 1,496,463 |
|
Restricted cash |
| 90,389 |
|
| 91,712 |
|
| 80,655 |
|
Receivables from clients, net |
| 561,569 |
|
| 635,380 |
|
| 578,889 |
|
Receivables from brokers, dealers and clearing organizations |
| 56,276 |
|
| 120,211 |
|
| 102,503 |
|
Advisor loans, net |
| 1,123,004 |
|
| 1,022,546 |
|
| 963,869 |
|
Other receivables, net |
| 677,766 |
|
| 645,731 |
|
| 581,483 |
|
Investment securities ($36,758, $45,093 and $39,274 at fair value at December 31, 2022, September 30, 2022 and December 31, 2021, respectively) |
| 52,610 |
|
| 62,177 |
|
| 49,192 |
|
Property and equipment, net |
| 780,357 |
|
| 751,478 |
|
| 658,841 |
|
Goodwill |
| 1,642,468 |
|
| 1,642,468 |
|
| 1,642,443 |
|
Other intangibles, net |
| 427,676 |
|
| 427,791 |
|
| 455,028 |
|
Other assets |
| 1,023,230 |
|
| 808,781 |
|
| 886,988 |
|
Total assets | $ | 9,482,226 |
| $ | 9,695,783 |
| $ | 7,991,600 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
LIABILITIES: |
|
|
| ||||||
Client payables | $ | 2,694,929 |
| $ | 3,275,860 |
| $ | 1,712,224 |
|
Payables to brokers, dealers and clearing organizations |
| 147,752 |
|
| 168,485 |
|
| 170,119 |
|
Accrued advisory and commission expenses payable |
| 203,292 |
|
| 194,480 |
|
| 222,379 |
|
Corporate debt and other borrowings, net |
| 2,717,444 |
|
| 2,719,096 |
|
| 2,814,044 |
|
Accounts payable and accrued liabilities |
| 448,630 |
|
| 392,810 |
|
| 384,025 |
|
Other liabilities |
| 1,102,627 |
|
| 945,540 |
|
| 1,018,276 |
|
Total liabilities |
| 7,314,674 |
|
| 7,696,271 |
|
| 6,321,067 |
|
STOCKHOLDERS’ EQUITY: |
|
|
| ||||||
Common stock, $0.001 par value; 600,000,000 shares authorized; 129,655,843 shares, 129,543,504 shares and 128,758,086 shares issued at December 31, 2022, September 30, 2022 and December 31, 2021, respectively |
| 130 |
|
| 129 |
|
| 129 |
|
Additional paid-in capital |
| 1,912,886 |
|
| 1,896,433 |
|
| 1,841,402 |
|
Treasury stock, at cost — 50,407,844 shares, 49,784,348 shares and 48,768,145 shares at December 31, 2022, September 30, 2022 and December 31, 2021, respectively |
| (2,846,536 | ) |
| (2,696,591 | ) |
| (2,498,600 | ) |
Retained earnings |
| 3,101,072 |
|
| 2,799,541 |
|
| 2,327,602 |
|
Total stockholders’ equity |
| 2,167,552 |
|
| 1,999,512 |
|
| 1,670,533 |
|
Total liabilities and stockholders’ equity | $ | 9,482,226 |
| $ | 9,695,783 |
| $ | 7,991,600 |
|
LPL Financial Holdings Inc.
Management's Statements of Operations
(In thousands, except per share data)
(Unaudited)
Certain information in this release is presented as reviewed by the Company’s management and includes information derived from the Company’s unaudited consolidated statements of income, non-GAAP financial measures and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures" in this release.
| Quarterly Results | ||||||||||||
| Q4 2022 | Q3 2022 | Change | Q4 2021 | Change | ||||||||
Gross Profit(6) |
|
|
|
|
| ||||||||
Advisory | $ | 902,440 |
| $ | 923,766 |
| (2 | %) | $ | 997,338 |
| (10 | %) |
Trailing commissions |
| 311,194 |
|
| 315,087 |
| (1 | %) |
| 364,455 |
| (15 | %) |
Sales-based commissions |
| 271,089 |
|
| 269,893 |
| — | % |
| 248,382 |
| 9 | % |
Advisory fees and commissions |
| 1,484,723 |
|
| 1,508,746 |
| (2 | %) |
| 1,610,175 |
| (8 | %) |
Production-based payout(7) |
| (1,313,026 | ) |
| (1,326,331 | ) | (1 | %) |
| (1,410,458 | ) | (7 | %) |
Advisory fees and commissions, net of payout |
| 171,697 |
|
| 182,415 |
| (6 | %) |
| 199,717 |
| (14 | %) |
Client cash(8) |
| 439,181 |
|
| 303,681 |
| 45 | % |
| 82,455 |
| n/m |
|
Other asset-based(9) |
| 191,797 |
|
| 194,270 |
| (1 | %) |
| 219,927 |
| (13 | %) |
Service and fee |
| 120,022 |
|
| 121,745 |
| (1 | %) |
| 110,385 |
| 9 | % |
Transaction |
| 46,790 |
|
| 43,328 |
| 8 | % |
| 39,306 |
| 19 | % |
Interest income and other, net(10) |
| 21,957 |
|
| 13,091 |
| 68 | % |
| 11,245 |
| 95 | % |
Total net advisory fees and commissions and attachment revenue |
| 991,444 |
|
| 858,530 |
| 15 | % |
| 663,035 |
| 50 | % |
Brokerage, clearing and exchange expense |
| (19,251 | ) |
| (20,850 | ) | (8 | %) |
| (20,372 | ) | (6 | %) |
Gross Profit(6) |
| 972,193 |
|
| 837,680 |
| 16 | % |
| 642,663 |
| 51 | % |
|
|
|
|
|
| ||||||||
G&A Expense |
|
|
|
|
| ||||||||
Core G&A(11) |
| 327,040 |
|
| 298,026 |
| 10 | % |
| 299,401 |
| 9 | % |
Regulatory charges |
| 9,325 |
|
| 7,847 |
| 19 | % |
| 8,442 |
| 10 | % |
Promotional (ongoing)(12)(13) |
| 84,077 |
|
| 98,667 |
| (15 | %) |
| 86,071 |
| (2 | %) |
Acquisition costs(13) |
| 6,435 |
|
| 7,498 |
| (14 | %) |
| 14,291 |
| (55 | %) |
Employee share-based compensation |
| 12,232 |
|
| 11,399 |
| 7 | % |
| 9,589 |
| 28 | % |
Total G&A |
| 439,109 |
|
| 423,437 |
| 4 | % |
| 417,794 |
| 5 | % |
EBITDA(14) |
| 533,084 |
|
| 414,243 |
| 29 | % |
| 224,869 |
| 137 | % |
Depreciation and amortization |
| 54,241 |
|
| 51,669 |
| 5 | % |
| 40,816 |
| 33 | % |
Amortization of other intangibles |
| 22,542 |
|
| 22,654 |
| — | % |
| 20,373 |
| 11 | % |
Interest expense on borrowings |
| 37,082 |
|
| 33,186 |
| 12 | % |
| 27,121 |
| 37 | % |
INCOME BEFORE PROVISION FOR INCOME TAXES |
| 419,219 |
|
| 306,734 |
| 37 | % |
| 136,559 |
| n/m |
|
PROVISION FOR INCOME TAXES |
| 100,137 |
|
| 74,403 |
| 35 | % |
| 28,478 |
| n/m |
|
NET INCOME | $ | 319,082 |
| $ | 232,331 |
| 37 | % | $ | 108,081 |
| 195 | % |
Earnings per share, diluted | $ | 3.95 |
| $ | 2.86 |
| 38 | % | $ | 1.32 |
| 199 | % |
Weighted-average shares outstanding, diluted |
| 80,875 |
|
| 81,250 |
| — | % |
| 81,744 |
| (1 | %) |
EPS prior to amortization of intangible assets and acquisition costs(15) | $ | 4.21 |
| $ | 3.13 |
| 35 | % | $ | 1.63 |
| 158 | % |
LPL Financial Holdings Inc.
Operating Metrics
(Dollars in billions, except where noted)
(Unaudited)
| Q4 2022 | Q3 2022 | Change | Q4 2021 | Change | ||||||
Market Drivers |
|
|
|
|
| ||||||
S&P 500 Index (end of period) |
| 3,840 |
|
| 3,586 |
| 7% |
| 4,766 |
| (19%) |
Russell 2000 Index (end of period) |
| 1,761 |
|
| 1,665 |
| 6% |
| 2,245 |
| (22%) |
Fed Funds daily effective rate (average bps) |
| 366 |
|
| 219 |
| 147bps |
| 8 |
| 358bps |
|
|
|
|
|
| ||||||
Advisory and Brokerage Assets(16) |
|
|
|
|
| ||||||
Advisory assets | $ | 583.1 |
| $ | 542.6 |
| 7% | $ | 643.2 |
| (9%) |
Brokerage assets |
| 527.7 |
|
| 495.8 |
| 6% |
| 563.2 |
| (6%) |
Total Advisory and Brokerage Assets | $ | 1,110.8 |
| $ | 1,038.4 |
| 7% | $ | 1,206.4 |
| (8%) |
Advisory as a % of Total Advisory and Brokerage Assets |
| 52.5 | % |
| 52.3 | % | 20bps |
| 53.3 | % | (80bps) |
|
|
|
|
|
| ||||||
Assets by Platform |
|
|
|
|
| ||||||
Corporate advisory assets(17) | $ | 389.1 |
| $ | 361.6 |
| 8% | $ | 429.6 |
| (9%) |
Independent RIA advisory assets(17) |
| 194.0 |
|
| 181.0 |
| 7% |
| 213.6 |
| (9%) |
Brokerage assets |
| 527.7 |
|
| 495.8 |
| 6% |
| 563.2 |
| (6%) |
Total Advisory and Brokerage Assets | $ | 1,110.8 |
| $ | 1,038.4 |
| 7% | $ | 1,206.4 |
| (8%) |
|
|
|
|
|
| ||||||
Centrally Managed Assets |
|
|
|
|
| ||||||
Centrally managed assets(18) | $ | 89.2 |
| $ | 83.0 |
| 7% | $ | 96.1 |
| (7%) |
Centrally Managed as a % of Total Advisory Assets |
| 15.3 | % |
| 15.3 | % | —bps |
| 14.9 | % | 40bps |
LPL Financial Holdings Inc.
Operating Metrics
(Dollars in billions, except where noted)
(Unaudited)
| Q4 2022 | Q3 2022 | Change | Q4 2021 | Change | ||||||
Net New Assets (NNA)(19) |
|
|
|
|
| ||||||
Net new advisory assets | $ | 12.6 |
| $ | 11.0 |
| n/m | $ | 24.2 |
| n/m |
Net new brokerage assets |
| 8.6 |
|
| 8.9 |
| n/m |
| 2.0 |
| n/m |
Total Net New Assets | $ | 21.3 |
| $ | 19.9 |
| n/m | $ | 26.2 |
| n/m |
|
|
|
|
|
| ||||||
Organic Net New Assets |
|
|
|
|
| ||||||
Organic net new advisory assets | $ | 12.6 |
| $ | 11.0 |
| n/m | $ | 24.2 |
| n/m |
Organic net new brokerage assets |
| 8.6 |
|
| 8.9 |
| n/m |
| 2.0 |
| n/m |
Total Organic Net New Assets | $ | 21.3 |
| $ | 19.9 |
| n/m | $ | 26.2 |
| n/m |
|
|
|
|
|
| ||||||
Net brokerage to advisory conversions(20) | $ | 1.5 |
| $ | 1.7 |
| n/m | $ | 3.4 |
| n/m |
Organic advisory NNA annualized growth(21) |
| 9.3 | % |
| 7.9 | % | n/m |
| 16.3 | % | n/m |
Total organic NNA annualized growth(21) |
| 8.2 | % |
| 7.5 | % | n/m |
| 9.2 | % | n/m |
|
|
|
|
|
| ||||||
Net New Advisory Assets(19) |
|
|
|
|
| ||||||
Corporate RIA net new advisory assets | $ | 8.4 |
| $ | 7.1 |
| n/m | $ | 17.0 |
| n/m |
Independent RIA net new advisory assets |
| 4.3 |
|
| 3.9 |
| n/m |
| 7.2 |
| n/m |
Total Net New Advisory Assets | $ | 12.6 |
| $ | 11.0 |
| n/m | $ | 24.2 |
| n/m |
Centrally managed net new advisory assets(19) | $ | 1.3 |
| $ | 2.2 |
| n/m | $ | 4.4 |
| n/m |
|
|
|
|
|
| ||||||
Client Cash Balances(22) |
|
|
|
|
| ||||||
Insured cash account sweep | $ | 46.8 |
| $ | 47.7 |
| (2%) | $ | 30.0 |
| 56% |
Deposit cash account sweep |
| 11.5 |
|
| 12.7 |
| (9%) |
| 9.3 |
| 24% |
Total Bank Sweep |
| 58.4 |
|
| 60.3 |
| (3%) |
| 39.3 |
| 49% |
Money market sweep |
| 3.0 |
|
| 3.2 |
| (6%) |
| 16.1 |
| (81%) |
Total Client Cash Sweep Held by Third Parties |
| 61.4 |
|
| 63.5 |
| (3%) |
| 55.4 |
| 11% |
Client cash account |
| 2.7 |
|
| 3.3 |
| (18%) |
| 1.7 |
| 59% |
Total Client Cash Balances | $ | 64.1 |
| $ | 66.8 |
| (4%) | $ | 57.1 |
| 12% |
Client Cash Balances as a % of Total Assets |
| 5.8 | % |
| 6.4 | % | (60bps) |
| 4.7 | % | 110bps |
|
|
|
|
|
| ||||||
Client Cash Balances Average Yields - bps(23) |
|
|
|
|
| ||||||
Insured cash account sweep |
| 291 |
|
| 212 |
| 79 |
| 101 |
| 190 |
Deposit cash account sweep |
| 254 |
|
| 157 |
| 97 |
| 19 |
| 235 |
Money market sweep |
| 32 |
|
| 38 |
|