LPL Financial Holdings Inc. (Nasdaq: LPLA), the parent of LPL Financial LLC – the nation’s largest independent broker-dealer, reported that total advisory and brokerage assets increased 46 percent year-over-year to $1.1 trillion, according to its second quarter 2021 results. This represents an increase of 16 percent compared to $958.3 billion in first quarter 2021.
Advisory assets increased 54 percent year-over-year to $578 billion. As a percentage of total assets, advisory asset increased to 51.9 percent, up from 49.3 percent a year ago. Brokerage assets increased 38 percent year-over-year to $535 billion.
Advisor count was 19,114, up 1,442 from last quarter and 2,141 year-over-year. This included the addition of more than 900 advisors from Waddell & Reed and more than 200 advisors from M&T Bank.
Total organic net new assets were $37 billion, translating to 16 percent annualized growth.
Organic net new advisory assets were $21 billion, and organic net new brokerage assets were $16 billion.
Acquired net new assets were $69 billion, of which $35 billion were brokerage and $33 billion were advisory, from the acquisition of the wealth management business of Waddell & Reed.
Recruited assets were $35 billion, more than triple a year ago. Over the trailing 12 months, recruited assets totaled $80 billion, more than double a year ago.
Net income totaled $119 million, or $1.46 per share in the second quarter of 2021. This compares with $102 million, or $1.27 per share, in the second quarter of 2020 and $130 million, or $1.59 per share, in the prior quarter.
Gross profit was $602 million during the second quarter of 2021, compared to $488 million for the same period last year, and $579 million during the first quarter of 2021.
Core general and administrative expenses increased 13 percent year-over-year to $252 million.
EBITDA increased 18 percent year-over-year to $243 million, and EBITDA as a percentage of gross profit was 40 percent. During the same period last year, EBITDA totaled nearly $207 million, and in the previous quarter totaled $278 million.
Total client cash balances were $48.4 billion, an increase of $0.1 billion sequentially. As a percentage of total assets, client cash balances were 4.4 percent.
“We delivered another quarter of strong results”, said Matt Audette, chief financial officer. “We drove new highs for assets and organic growth while also completing the onboarding of BMO, M&T and Waddell & Reed. Looking ahead, our business momentum and financial strength position us well to continue serving our clients, growing our business, and creating long-term shareholder value.”
LPL acquired Waddell & Reed’s wealth management business in April 2021 and onboarded advisors serving approximately 98 percent of client assets, equivalent to approximately $69 billion.
BMO Harris Financial Advisors onboarded $3.1 billion of brokerage assets in second quarter, which substantially completes the onboarding of its approximate $15 billion total assets.
LPL also onboarded the retail brokerage and advisory business of M&T Bank, with $21.9 billion total assets, of which $15.6 billion assets transitioned onto LPL’s platform in the second quarter. The remaining $6.3 billion of assets are held directly with sponsors and expected to onboard over the next several months, LPL said.
In addition, CUNA Brokerage Services signed an agreement to join LPL’s platform. The firm supports more than 500 advisors serving approximately $36 billion in brokerage and advisory assets and expects to onboard in early 2022.
LPL supports more than 19,000 financial advisors, 800 institution-based investment programs and 450 independent RIA firms nationwide.