LPL Financial Holdings Inc. (LPLA) came out with quarterly earnings of $5.2 per share, beating the Zacks Consensus Estimate of $4.47 per share. This compares to earnings of $4.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +16.33%. A quarter ago, it was expected that this company would post earnings of $4.21 per share when it actually produced earnings of $4.51, delivering a surprise of +7.13%.Over the last four quarters, ...

Financial Data and Key Metrics Changes - Total assets reached a record $2.3 trillion, driven by the acquisition of Commonwealth Financial Network and solid organic growth, with organic net new assets of $33 billion, representing a 7% annualized growth rate [3][4] - Adjusted EPS for Q3 was $5.20, an increase of 25% year-over-year, with gross profit of $1,479 million, up $175 million sequentially [4][14] - Adjusted pre-tax margin was approximately 38%, reflecting the combination of organic growth and expense discipline [14] Business Line Data and Key Metrics Changes - Recruited assets in Q3 were $33 billion, contributing to a record $168 billion over the trailing 12 months [4][14] - In the traditional independent market, approximately $12 billion in assets were added during Q3, maintaining industry-leading capture rates despite low advisor movement [4][5] - The acquisition of Commonwealth Financial Network added $275 billion in assets during Q3, with nearly 80% of assets retained [13][18] Market Data and Key Metrics Changes - Client cash balances ended the quarter at $56 billion, up $5 billion, with $4 billion attributed to Commonwealth Financial Network [15] - The mix of fixed-rate balances in the ICA portfolio was approximately 60%, with an ICA yield of 351 basis points, up 9 basis points from Q2 [15][16] Company Strategy and Development Direction - The company aims to be the best firm in wealth management, focusing on client centricity, empowering employees, and improving operating leverage [9][10] - Plans to streamline services and adjust pricing to align with market value, enhancing the value proposition for advisors [10][17] - Continued focus on onboarding Commonwealth Financial Network and enhancing capabilities for all advisors [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing integration of Commonwealth Financial Network and the positive cultural alignment [25][27] - The company anticipates a return to historical norms in advisor movement, which could lead to higher organic growth in future quarters [46][48] - Management remains optimistic about the long-term growth trajectory and the ability to capture market share [48][62] Other Important Information - The company is focused on maintaining a strong capital position, with share repurchases paused until after the Commonwealth onboarding [21] - The expected run rate EBITDA for Commonwealth Financial Network is approximately $425 million once fully integrated [18] Q&A Session Summary Question: Update on Commonwealth integration and recruiting focus - Management confirmed that the integration is progressing well, with nearly 80% of assets retained, and plans to refocus recruiting efforts externally as retention improves [24][26] Question: Clarification on pricing changes and margin benefits - The 100-basis point improvement in margin is solely from pricing changes, with additional cost efficiencies expected to contribute further [30][31] Question: Timeline for achieving 90% retention target - The timeline for achieving the 90% retention target aligns with the onboarding of Commonwealth, expected in Q4 2026, but could occur sooner [32] Question: Progress on alternative investment capabilities - The company has significantly expanded its alternative investment offerings and is on track to have 120 alternatives available for sale by the end of the year [50][52] Question: Expectations for TA rates and advisor movement - Management expects TA rates to decrease as interest rates decline, with advisor movement anticipated to return to historical norms [56][57]

Financial Performance - Gross Profit reached $1.479 billion in Q3 2025, a 31% year-over-year increase[21, 81] - Adjusted Pre-Tax Income was $569 million in Q3 2025, up 35% year-over-year[27, 84] - Adjusted EPS increased to $5.20 in Q3 2025, a 25% year-over-year increase[25, 83] - The Adjusted Pre-Tax Margin was 38.4% in Q3 2025, a 1.2 percentage point increase year-over-year[23, 26] Assets and Growth - Total Advisory and Brokerage Assets reached $2.315 trillion in Q3 2025[13, 73] - Advisory Assets accounted for 58.2% of Total Assets in Q3 2025, a 2.2 percentage point increase year-over-year[13, 74] - Recruited Assets amounted to $32.6 billion in Q3 2025[15] - Organic Total Net New Assets (NNA) were $32.7 billion in Q3 2025[17] - The organic growth rate was approximately 7% in Q3 and approximately 12% over the past four quarters[17, 28] - Centrally Managed Assets grew to $203 billion in Q3 2025, with a 34% organic growth rate over the past 4 quarters[31] Client Cash and Payout - Client Cash decreased to 2.4% of total assets in Q3 2025[35, 52, 55] - Net Buy activity was $42 billion in Q3 2025[34, 55] - The Payout Rate was 87.5% in Q3 2025[36, 37] Expenses and Capital Management - The company lowered its 2025 Core G&A outlook range to $1.86 billion - $1.88 billion[59] - The company targets a leverage ratio between 1.5x and 2.5x[63, 64]

Financial Performance - Net loss for Q3 2025 was $30 million, resulting in a diluted loss per share of $0.37, compared to a net income of $255 million or $3.39 per share in Q3 2024[7] - Adjusted EPS increased by 25% year-over-year to $5.20, with gross profit rising 31% year-over-year to $1,479 million[4] - Total revenue for the three months ended September 30, 2025, was $4,551,977, representing a 19% increase from the previous quarter and a 46% increase year-over-year[20] - Advisory revenue increased to $2,210,499, up 29% from the previous quarter and 60% from the same period last year[20] - Total expenses for the three months ended September 30, 2025, were $4,586,088, a 32% increase from the previous quarter and a 66% increase year-over-year[20] - Net loss for the three months ended September 30, 2025, was $(29,517), compared to a net income of $273,249 in the previous quarter[20] - Earnings per share (diluted) for the three months ended September 30, 2025, was $(0.37), down from $3.40 in the previous quarter[20] - For the nine months ended September 30, 2025, total revenue reached $12,057,009, a 36% increase compared to the same period in 2024[22] - The company reported a decrease in net income for the nine months ended September 30, 2025, to $562,305, down 29% from $787,867 in the same period last year[22] - Adjusted pre-tax income for Q3 2025 was not explicitly stated but is derived from excluding non-cash items and acquisition costs, indicating a focus on core operating performance[51] Assets and Cash Balances - Total advisory and brokerage assets grew by 45% year-over-year to $2.3 trillion, with advisory assets increasing by 51% to $1.3 trillion[4] - Total net new assets reached $308 billion, including $275 billion from the Commonwealth acquisition, while organic net new assets were $33 billion, representing 7% annualized growth[4] - Corporate cash stood at $568 million, and total client cash balances increased by $10 billion year-over-year to $56 billion[4] - Total assets as of September 30, 2025, amounted to $18,032,214, an increase from $17,473,676 as of June 30, 2025[24] - Total client cash balances increased to $55.8 billion, reflecting a 10% rise from Q2 2025 and a 22% rise from Q3 2024[33] - Total client cash balances reached $55.8 million, a 6% increase from August 2025[36] - Total advisory and brokerage assets grew to $2,314.5 billion, up 21% from Q2 2025 and 45% from Q3 2024[29] Acquisitions and Growth - The acquisition of Commonwealth was completed, with an estimated run-rate EBITDA increase from $415 million to $425 million, and a retention target of 90% for advisors[11] - Atria Wealth Solutions conversion was completed with $115 billion of brokerage and advisory assets, leading to an increase in estimated run-rate EBITDA from $150 million to $155 million[11] - Acquired net new advisory assets totaled $199.4 billion, marking a substantial increase from previous quarters[31] - Acquisitions netted $1,526.3 million in Q3 2025, a substantial increase from $102.8 million in Q2 2025[44] - The company reported a significant increase in acquisition-related costs, with $743.0 million recognized in Q3 2025, compared to $269.6 million in Q2 2025[66] Expenses and Costs - Compensation and benefits expenses for the nine months ended September 30, 2025, were $1,210,055, a 49% increase from the previous year[22] - Advisory and commission expense in Q3 2025 was $3,025,274, representing a 21.9% increase from Q2 2025 ($2,483,165) and a 55.4% increase from Q3 2024 ($1,948,065)[54] - Core G&A expenses for Q3 2025 totaled $477,323, an increase from $425,595 in Q2 2025 and $359,134 in Q3 2024[56] - Acquisition costs in Q3 2025 amounted to $538,177, significantly higher than $74,875 in Q2 2025 and $22,243 in Q3 2024[60] Market Performance - The S&P 500 Index at the end of Q3 2025 was 6,688, an 8% increase from Q2 2025[29] - The S&P 500 Index rose by 4% to 6,688 at the end of the period, reflecting positive market conditions[36] Advisor Metrics - The number of advisors increased to 32,128, representing a 9% growth from Q2 2025 and a 36% increase year-over-year[44] - The annualized advisory fees and commissions per advisor increased to $442, an 18% rise from Q2 2025[44] Other Financial Metrics - Adjusted EBITDA for Q3 2025 was $774,789, a 13% increase from Q2 2025[27] - Adjusted EBITDA for Q3 2025 was $774.8 million, an increase from $688.3 million in Q2 2025 and $566.2 million in Q3 2024, reflecting a year-over-year growth of 36.8%[61] - Credit Agreement EBITDA for Q3 2025 was $3.44 billion, compared to $2.92 billion in Q2 2025 and $2.67 billion in Q4 2024, reflecting strong operational performance[66] Recognition and Awards - The company was recognized as the No. 1 Independent Broker-Dealer in the U.S. based on total revenues from 1996 to 2022[55]

Key Financial Results - The company reported a net loss of $30 million, translating to a diluted loss per share of $0.37, compared to a net income of $255 million or $3.39 per share in Q3 2024 [5][8] - Adjusted EPS increased by 25% year-over-year to $5.20 [5] - Gross profit rose by 31% year-over-year to $1,479 million [5] - Core G&A expenses increased by 33% year-over-year to $477 million [5] - Adjusted pre-tax income increased by 35% year-over-year to $569 million [5] - Total advisory and brokerage assets increased by 45% year-over-year to $2.3 trillion [5] Key Business Results - Total net new assets were $308 billion, including $275 billion from the acquisition of Commonwealth [5] - Organic net new assets were $33 billion, representing a 7% annualized growth [5] - Recruited assets were $33 billion, up 27% from a year ago [5] - Client cash balances increased to $56 billion, up $10 billion year-over-year [5] Key Capital and Liquidity Measures - The company onboarded First Horizon with $18 billion of brokerage and advisory assets, of which $17 billion transitioned onto the platform in Q3 [3] - Corporate cash stood at $568 million, with a leverage ratio of 2.04x [5] - The company declared a dividend of $0.30 per share to be paid on December 1, 2025 [10] M&A - The acquisition of Commonwealth was closed, with an expected conversion completion in Q4 2026 [6] - The estimated run-rate EBITDA for Commonwealth increased from $415 million to $425 million [6] - The company is tracking towards a 90% retention target for Commonwealth advisors, with nearly 80% of assets signed to date [6]

You can find original article here WealthManagement. Subscribe to our free daily WealthManagement newsletters. Nearly $1 billion in assets are set to leave Commonwealth Financial Network for other broker/dealers, according to company announcements made this week. The moves come ahead of Commonwealth owner LPL Financial’s earnings report on Thursday, during which analysts will no doubt be listening for an update on advisor attrition since LPL’s $2.7 billion cash deal for Commonwealth closed on Aug. 1. LPL ...

Core Insights - The upcoming earnings report for LPL Financial Holdings Inc. (LPLA) is anticipated to show quarterly earnings of $4.47 per share, reflecting a 7.5% increase year-over-year, with revenues expected to reach $4.34 billion, a 39.5% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has been revised 1.2% lower over the last 30 days, indicating a collective reevaluation by analysts [2] - Revisions to earnings estimates are crucial as they serve as indicators for predicting investor actions regarding the stock [3] Revenue Projections - Analysts estimate 'Revenue- Commission' will be $1.14 billion, representing a 41.2% year-over-year increase [5] - 'Revenue- Service and fee' is projected to reach $168.93 million, indicating a 15.9% increase from the previous year [5] - 'Revenue- Asset-based fees' is expected to be $778.34 million, reflecting a 24.3% year-over-year change [5] - 'Revenue- Advisory' is forecasted at $2.06 billion, a 49.2% increase from the prior-year quarter [6] Advisory and Brokerage Metrics - The number of advisors is estimated to be 31,123, up from 23,686 in the same quarter last year [6] - Total Advisory and Brokerage Assets - Advisory Assets are projected to be $1,284.19 billion, compared to $892.00 billion a year ago [6] - Total Advisory and Brokerage Assets - Brokerage Assets are expected to reach $949.53 billion, up from $700.10 billion last year [7] - Total Advisory and Brokerage Assets are projected at $2,233.72 billion, compared to $1,592.10 billion a year ago [7] Net New Assets - Net New Assets (NNA) - Net new advisory assets are estimated at $31.04 billion, up from $23.70 billion last year [8] - Total Net New Assets are projected to be $33.03 billion, compared to $27.50 billion in the same quarter of the previous year [8] - Net new advisors are expected to reach 515, compared to 224 in the same quarter last year [9] - Net New Assets (NNA) - Net new brokerage assets are forecasted at $1.99 billion, down from $3.80 billion a year ago [9] Stock Performance - Over the past month, LPL Financial shares have recorded a return of +3.1%, compared to the Zacks S&P 500 composite's +3.8% change [9] - Based on its Zacks Rank 3 (Hold), LPLA is expected to perform in line with the overall market in the upcoming period [10]

Core Insights - Edge Wealth Advisory Group has joined LPL Financial's broker-dealer and Registered Investment Advisor platform, managing approximately $200 million in advisory, brokerage, and retirement plan assets [1][10] - The team consists of John Edgecomb and Robb Edgecomb, who have a combined 65 years of experience serving various client demographics [2] - The partnership with LPL Financial is driven by a desire for greater independence, flexibility, and access to advanced technology [4] Company Overview - LPL Financial Holdings Inc. is one of the fastest-growing wealth management firms in the U.S., supporting over 29,000 financial advisors and approximately 1,100 financial institutions [7] - The firm services and custody approximately $1.9 trillion in brokerage and advisory assets for around 7 million Americans [7] Client Approach - The Edge Wealth Advisory Group emphasizes a comprehensive understanding of each client's financial situation, including their goals and potential risks [3] - The firm aims to provide independent, comprehensive advice, aligning with LPL's financial philosophy [5] Future Aspirations - The Edge Wealth Advisory Group is excited about utilizing advanced planning software and integrating AI into their business operations [5] - The team plans to expand their services in Texas and surrounding states with the support of LPL Financial [5]

Core Insights - LPL Financial LLC has welcomed Shawn Gentle, AIF® of Gentle Family Wealth Partners, to its broker-dealer and Registered Investment Advisor platform, managing approximately $280 million in advisory, brokerage, and retirement plan assets [1][9] Company Overview - LPL Financial Holdings Inc. is one of the fastest-growing wealth management firms in the U.S., supporting over 29,000 financial advisors and approximately 1,100 financial institutions, with around $1.9 trillion in brokerage and advisory assets for about 7 million Americans [7] Advisor Background - Shawn Gentle brings 37 years of experience in finance and economics, serving clients across the Southeast, including retirees, business owners, and entrepreneurs [2][3] - Gentle is actively involved with charitable organizations, assisting clients in achieving their legacy and philanthropic goals [2][3] Transition to LPL Financial - Gentle chose to transition to LPL for its advanced technology, autonomy, and robust support, emphasizing the importance of cybersecurity and technological innovation in today's financial environment [4][5] - The partnership with LPL allows Gentle to maintain a personalized approach while benefiting from the resources of a leading financial organization [5] Future Plans - Gentle plans to utilize LPL's resources for succession planning and practice acquisition, aiming to succeed retiring advisors and eventually transition his own practice [5]

Core Insights - LPL's acquisition of Commonwealth for $2.7 billion has triggered a recruitment surge, with many advisors opting for alternatives like Osaic despite LPL's resources [1][4] - Advisors from Commonwealth express concerns about LPL's culture and the potential loss of personal touch, indicating that size does not guarantee preference among advisors [1][3] Group 1: Advisor Sentiment - Advisors from Commonwealth are prioritizing minimal disruption and high-quality service, as highlighted by Thomas Hinck's emphasis on quick responses over impersonal service [2] - Concerns about LPL's size and its impact on culture are prevalent among Commonwealth advisors, with fears that the personal touch may diminish over time [3] Group 2: Transition Dynamics - LPL asserts its commitment to maintaining Commonwealth's culture and providing a seamless transition experience for advisors, emphasizing a frictionless, paperless conversion process [4] - Several former Commonwealth firms have already transitioned to Osaic, indicating a trend of advisors seeking alternatives post-acquisition [4]