LPL Financial said its total recruited assets for 2022 were $82 billion, down about 8% from 2021. That included $15 billion of recruited assets in the fourth quarter 2022, up from nearly $13 billion in the third quarter and down from $17 billion in the year-ago quarter.
On an earnings call Thursday, CEO Dan Arnold said the fourth quarter was its strongest quarter of recruiting in 2022 in its traditional independent advisor channel, which accounted for $11 billion of recruited assets. The new affiliation models, including LPL’s Strategic Wealth Services, employee and RIA offering, recruited over $1 billion in assets during the quarter.
The firm also onboarded some large enterprises last year, including CUNA Mutual’s wealth business and People’s United.
Arnold said there has not been as much advisor churn over the last three years, and that has caused competitors to become more aggressive with their transition assistance. But in the third and fourth quarters, the firm has seen more advisors “exploring their strategic options,” he said.
“You’ll continue to see folks explore that movement from an employee-based model to independent model,” Arnold said. “We continue to see with more and more capabilities, folks in the independent model, looking for something that can serve and support them better and taking care of their clients. And finally, even with being able to help with their own succession planning creates another catalyst of opportunities.”
LPL’s advisor headcount was 21,275 at the end of the year, up 231 sequentially and 1,399 year-over-year.
Last year, the firm introduced a liquidity and succession planning offering, launched to fulfill a need for advisors who couldn’t find another advisor to help them carry out their ownership transition. LPL will buy their practice, run it under the Linsco model temporarily until that advisor’s eventual successor is ready.
“The offering has been well received and we are encouraged our early momentum, having already executed on a handful of transactions with providers on our product,” Arnold said.
This year, the firm will offer the capability to advisors outside of LPL.
That offering is part of LPL’s suite of business solutions, which ended the quarter with over 3,000 active users, up more than 30% year-over-year and generating a run-rate revenue of $36 million.
“When we started our services group, we focused on addressing some of the most complex challenges facing our advisers. We were often more acute for advisers with larger practices,” Arnold said. “With the insights and learnings from this initial client segment, we’re now expanding our service portfolio to address the needs of a broader adviser base.”
Overall, LPL reported reported net income of $319 million for the quarter, or diluted earnings per share of $3.95, up 199% from a year ago, beating analyst expectations by 18 cents a share, according to SeekingAlpha.com. The firm reported revenue of $2.33 billion, up 11% from a year ago, beating expectations by $60 million.