LPL Financial(US:LPLA)2021-10-29 02:04Financial Data and Key Metrics Changes - Total assets reached a new high of $1.13 trillion, up 40% year-over-year, driven by organic growth and equity market appreciation [8] - EPS prior to intangibles and acquisition costs was $1.77, an increase of 23% from the previous year [13][38] - Gross profit reached a new high of $631 million, up $29 million or 5% sequentially [38] Business Line Data and Key Metrics Changes - Net new assets for the third quarter were $27 billion, translating to a 10% annualized growth rate [8][36] - Recruited assets were $13 billion in Q3, bringing the total for the past year to $83 billion [9][37] - Advisory net new assets were $21 billion, representing a 16% annualized growth rate, with advisory assets now making up 52% of total assets [37] Market Data and Key Metrics Changes - The company saw solid recruiting results across markets, with $10 billion in traditional independent model and $2.5 billion in new affiliation models [10] - Asset retention was approximately 98% in Q3, indicating strong client engagement [12] Company Strategy and Development Direction - The long-term vision is to redefine the independent model and become a leader in the advisor marketplace [14] - The company is focused on enhancing advisor experience through new capabilities and technology, aiming for sustainable organic growth and increased market share [15] - Four strategic plays include expanding addressable markets, differentiating advisor capabilities, creating an industry-leading service experience, and helping advisors run successful businesses [16][20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing sustainable growth from financial institutions and the potential for continued organic growth [17][56] - The company is preparing to onboard CUNA Brokerage Services in the middle of next year, which is expected to contribute to growth [35] Other Important Information - The company has tightened its 2021 core G&A outlook to a range of $1 billion 45 million to $1 billion 60 million, reflecting the onboarding of Waddell & Reed [46] - The share repurchase program was restarted, with $40 million of shares bought back to offset dilution [50] Q&A Session Summary Question: Recruiting trends and business solutions penetration - Management highlighted excitement about opportunities in traditional bank outsourcing markets and the potential for growth in business solutions, indicating significant upside in penetration rates [56][58] Question: Guidance and inflation pressures - Updated guidance reflects organic growth and variable costs associated with supporting it, with a focus on delivering operating leverage [63] Question: ICA strategy and demand evolution - Demand for both floating and fixed rate contracts is improving, with more conversations occurring in the market [66][68] Question: Digital offering evolution - The company is investing in digital capabilities to enhance the advisor's value proposition and streamline operational processes [90][94] Question: RIA custody offering traction - The re-launch of the RIA custody offering has seen a positive response, with several advisors onboarded and a solid pipeline building [98][100]