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LPLA · LPL Financial Holdings

21 filings

10-K

LPLA 10-K Annual Reports

LPL Financial Holdings - 21 annual reports

Filing record · 2016–202610-K1210-Q338-K120

2025
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2025
LPL Financial Holdings Inc. reported 2025 net income of $863.0 million, or $10.92 per diluted share, down from $1,058.6 million, or $14.03 per diluted share, in 2024. Total revenue rose 37% to $16.99 billion from $12.39 billion, driven by the August 1, 2025 acquisition of Commonwealth Financial Network, which the Company paid for in cash of approximately $2.7 billion at closing. Total advisory and brokerage assets reached $2.4 trillion at December 31, 2025, versus $1.7 trillion a year earlier, with total net new assets of $431.5 billion. Adjusted EPS, a non-GAAP measure, was $20.09 compared with $16.51. The decline in GAAP net income reflected $740.4 million of acquisition costs, including $419.0 million recorded at the Commonwealth closing. Balance sheet and capital activity were significant in 2025. Corporate debt and other borrowings were $7.26 billion at year-end, against $5.49 billion a year earlier, after several senior notes issuances. The Company completed a public equity offering of approximately 5.4 million shares at $320.00 per share, with proceeds of about $1.7 billion used to fund the Commonwealth acquisition. Share repurchases were paused in early 2025 and totaled $100.0 million for the year, with $630.0 million remaining under the authorization. The Company's leverage ratio was 1.95 against a covenant maximum of 4.0, and the Board declared a $0.30 quarterly dividend payable March 24, 2026. Regulatory and operational items include an SEC notice that it had concluded an investigation into the Company's cash management program for corporate advisory accounts and did not intend to recommend enforcement action, announced January 23, 2026. Putative class action lawsuits related to cash sweep programs filed in July 2024 remain pending, and the Company intends to defend them vigorously. Management excluded Commonwealth from its internal control assessment, noting it represented approximately 14% of total assets and 7% of total revenues. The Company also expects to complete the conversion of Commonwealth's assets to its platform in the fourth quarter of 2026.
Feb 23, 2026
2024
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2024
LPL Financial Holdings Inc. (LPLA) reported net income of $1.06 billion, or $14.03 per diluted share, for the year ended December 31, 2024, compared with $1.07 billion, or $13.69 per diluted share, in 2023. Total revenue rose to $12.39 billion from $10.05 billion, and gross profit, a non-GAAP measure, was $4.50 billion versus $4.03 billion. Advisory and brokerage assets reached $1.74 trillion, and total net new assets were $235.6 billion, up from $104.1 billion. The company describes itself as the nation's largest independent broker-dealer, a leading investment advisory firm, and a top custodian, supporting nearly 29,000 financial advisors. Growth was driven by the acquisition of Atria Wealth Solutions, Inc., which closed on October 1, 2024, for an initial cash payment of approximately $859 million plus up to $330 million in contingent consideration, and by the completed transition of Prudential Advisors to the company's platform. Total indebtedness rose to $5.5 billion at year-end, of which $2.1 billion carried floating rates, and the leverage ratio was 1.89 against a covenant maximum of 4.0. Client cash balances were $55.1 billion, and the filing notes that the Federal Reserve reduced rates in the second half of 2024, which the company expects to affect its client cash revenue. The filing also discloses an SEC request for information in August 2024 about the company's cash management program for corporate advisory accounts, which the company describes as likely part of an industry-wide inquiry, and putative class actions filed in July 2024 relating to cash sweep programs. The company paid a $50.0 million SEC penalty in August 2024 and an $18.0 million AML-related civil penalty, which was paid in January 2025. Share repurchases of $170.0 million were made in 2024 after a pause tied to the Atria deal, and $730.0 million remained under the authorization at year-end.
Feb 20, 2025
2023
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2023
LPL Financial Holdings Inc. reported net income of $1.07 billion, or $13.69 per diluted share, for the year ended December 31, 2023, compared with $845.7 million, or $10.40 per diluted share, in 2022. Total revenue rose to $10.05 billion from $8.60 billion, and gross profit, a non-GAAP measure, was $4.0 billion, up 26% from $3.2 billion. Total advisory and brokerage assets reached $1.4 trillion at year-end, up from $1.1 trillion, and total net new assets were $104.1 billion, compared with $95.9 billion in 2022. Client cash revenue grew substantially as federal funds rates rose, even though average client cash balances declined to $48.8 billion from $61.9 billion. The company returned capital to stockholders, repurchasing 5,075,900 shares for a total of $1.1 billion and paying $92.2 million in dividends. Total corporate debt and other borrowings stood at $3.7 billion at year-end, and the leverage ratio rose to 1.63 from 1.39. In November 2023 the company issued $750.0 million of 6.750% senior unsecured notes due 2028. Management also disclosed a $40.0 million regulatory charge in anticipation of a potential SEC settlement over records preservation for communications on personal devices, against a proposed $50.0 million civil penalty, with the settlement not yet reached. The filing describes pending strategic events, including a definitive agreement to acquire Atria Wealth Solutions, Inc., expected to close in the second half of 2024 with conversion in mid-2025, and a Prudential strategic relationship under which Prudential Advisors' brokerage and advisory assets are expected to transition to LPL in the second half of 2024, subject to regulatory approval.
Feb 21, 2024
2022
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2022
LPL Financial Holdings Inc. reported net income of $845.7 million, or $10.40 per diluted share, for the year ended December 31, 2022, compared with $459.9 million, or $5.63 per diluted share, in 2021. Total revenue rose to $8.60 billion from $7.72 billion, and gross profit, a non-GAAP measure, was $3.2 billion, up 30% from $2.5 billion. The company describes itself as the nation's largest independent broker-dealer, a leading investment advisory firm, and a top custodian, serving more than 21,000 financial advisors and approximately 7.9 million client accounts. Asset levels declined with markets. Total advisory and brokerage assets were $1.1 trillion at December 31, 2022, down from $1.2 trillion, while total net new assets were $95.9 billion compared with $190.0 billion in 2021. Client cash balances rose to $64.1 billion from $57.1 billion, and client cash revenue increased to $953.6 million from $360.8 million, driven by higher federal funds rates. Trailing commission revenue fell 8% to $1.29 billion. The company completed the acquisition of Financial Resources Group Investment Services on January 31, 2023, and its Board approved a $2.0 billion share repurchase authorization beginning in 2023. The quarterly cash dividend was increased 20% to $0.30 per share starting in the first quarter of 2023. At year-end, total corporate debt was $2.74 billion, and the reported leverage ratio was 1.39, down from 2.26. The filing also discloses an SEC request for information from October 2022 regarding records preservation for business communications on personal devices or unapproved messaging platforms, which management does not believe will have a material adverse effect. Management reported that LPL Financial's net capital was 8% of aggregate debits at year-end, below a 10% covenant that was cured within the allowed 5-day period.
Feb 23, 2023
2021
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2021
LPL Financial Holdings Inc. (LPLA) reported net income of $459.9 million, or $5.63 per diluted share, for 2021, compared with $472.6 million, or $5.86 per diluted share, in 2020. Total revenue rose to $7.72 billion from $5.87 billion, and total advisory and brokerage assets reached $1.2 trillion at December 31, 2021, up 33.6% from $903.1 billion. The company describes itself as the nation's largest independent broker-dealer, supporting nearly 20,000 financial advisors and approximately 7.2 million client accounts. Growth was driven largely by the April 30, 2021 acquisition of the wealth management business of Waddell & Reed Financial, Inc. for $300.0 million, and by organic net new assets of $118.8 billion, which included roughly $35.0 billion onboarded from M&T Bank and BMO Harris. Gross profit rose 16.7% to $2.45 billion, while expenses grew faster, with advisory and commission expense up 40.1% and net income declining 2.7%. Acquisition costs of $76.4 million weighed on results. Balance-sheet items include total corporate debt and other borrowings of $2.81 billion, a leverage ratio of 2.26 against a covenant maximum of 5.0, and corporate cash of $237.0 million. The company paid $80.1 million in dividends and repurchased $90.0 million of shares during 2021. Management also flagged ongoing exposure to COVID-19, low interest rates affecting client cash program revenue, and regulatory matters, and noted that Fed officials signaled a possible rate increase at the March 2022 meeting.
Feb 22, 2022
2020
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2020
LPL Financial Holdings Inc. (LPLA) describes itself as a leader in the retail financial advice market and the nation's largest independent broker-dealer, serving independent financial advisors and financial institutions with technology, research, self-clearing and compliance services, and practice management programs. As of December 31, 2020, its advisors supported approximately 6.0 million client accounts, with total advisory and brokerage assets of $903.1 billion, up from $764.4 billion a year earlier. Net income for 2020 was $472.6 million, or $5.86 per diluted share, compared with $559.9 million, or $6.62 per share, in 2019. Total net revenues rose to $5,871.6 million from $5,624.9 million, while gross profit (a non-GAAP measure) declined to $2,103.3 million from $2,172.2 million. The company's net new assets were $60.2 billion in 2020, compared with $36.3 billion in 2019, and it ended the year with $48.9 billion in total client cash balances. Client cash revenues fell to $481.4 million from $652.8 million as the federal funds rate declined, a key pressure point identified in the filing. Shareholder returns totaled $229.1 million in 2020, including $150.0 million of share repurchases before the company suspended buybacks in early 2020 due to COVID-19 uncertainty, with $349.8 million remaining under the authorization. Total indebtedness was $2.3 billion at year-end. The filing also highlights the pending acquisition of the wealth management business of Waddell & Reed Financial, Inc. for $300.0 million, expected to close in the middle of 2021 upon Macquarie's acquisition of Waddell & Reed. Management notes that COVID-19 remains a risk to operations, advisor recruiting, and client cash economics, and that regulatory matters, including Regulation BI and new DOL fiduciary rules, may increase compliance costs.
Feb 23, 2021
2019
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2019
LPL Financial Holdings Inc. reported net income of $559.9 million, or $6.62 per diluted share, for 2019, up from $439.5 million, or $4.85 per diluted share, in 2018. Net revenues rose to $5.62 billion from $5.19 billion, and the company describes itself as the nation's largest independent broker-dealer, serving independent financial advisors and financial institutions with about 5.7 million client accounts and roughly 16,464 advisors at year-end 2019. Total brokerage and advisory assets served reached $764.4 billion at December 31, 2019, up from $628.1 billion, though total net new assets fell to $26.6 billion from $51.6 billion, as net new brokerage assets were outflows of $3.4 billion versus inflows of $24.1 billion in 2018. Advisory assets grew to $365.8 billion and represented 47.8% of total assets served. Gross profit, a non-GAAP measure, was $2.17 billion, up 11.5%, and the company returned $583.0 million to stockholders through $82.6 million of dividends and $500.4 million of share repurchases. The filing highlights ongoing regulatory exposure, including the SEC's Regulation BI with a compliance date of June 30, 2020, a pending Department of Labor fiduciary rule, and state-level standards of conduct. Total indebtedness was $2.4 billion at year-end, and the company issued $400.0 million of 4.625% senior notes due 2027 in November 2019. Management reported the company was in compliance with its financial covenants.
Feb 21, 2020
2018
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2018
LPL Financial Holdings Inc. reported net income of $439.5 million, or $4.85 per diluted share, for 2018, up from $238.9 million, or $2.59 per diluted share, in 2017. Net revenues were $5.19 billion, compared with $4.28 billion in 2017. Gross profit, a non-GAAP measure the company defines as net revenues less commission and advisory expenses and brokerage, clearing, and exchange fees, was $1,947.7 million, up 25.3%. The company describes itself as the nation's largest independent broker-dealer, serving independent financial advisors and financial institutions. Total brokerage and advisory assets served were $628.1 billion at year-end 2018, with net new assets of $51.6 billion. The 2017 acquisition of certain assets of National Planning Holdings, Inc. for $325 million and the 2018 acquisition of AdvisoryWorld for $28.1 million contributed to these results. The company returned $506.3 million to shareholders in 2018, including $88.4 million in dividends and $417.9 million in share repurchases covering 6,533,146 shares. Total indebtedness was $2.4 billion at December 31, 2018, of which $1.5 billion bears floating interest rates. The company reports that it was in compliance with both financial covenants under its revolving credit facility. The filing highlights regulatory and legal exposure. Under a settlement structure with the North American Securities Administrators Association related to historical state 'blue sky' law compliance, the company expects aggregate fines of approximately $26.4 million, with administrative orders entered in 21 jurisdictions and the remaining 32 expected in 2019. The scope and cost of potential customer remediation cannot yet be estimated, and actual reimbursements could exceed reserves. A putative securities class action related to share repurchases and financial performance in late 2015 is also pending, which the company intends to defend vigorously.
Feb 26, 2019
2017-A
LPL Financial Holdings Annual Report (Amendment), Year Ended Dec 31, 2017
LPL Financial Holdings Inc. (LPLA) reported net income of $238.9 million, or $2.59 per diluted share, for 2017, up from $191.9 million, or $2.13 per share, in 2016. Net revenues rose to $4.28 billion from $4.05 billion. The company describes itself as a leader in the retail financial advice market and the nation's largest independent broker-dealer, serving more than 15,000 independent financial advisors and approximately 4.8 million client accounts. Total brokerage and advisory assets served grew to $615.1 billion at December 31, 2017, from $509.4 billion, with total net new assets of $43.4 billion, versus $5.9 billion in 2016. Growth was supported by cash sweep revenue, which rose to $301.4 million from $173.7 million, and by the acquisition of certain assets of National Planning Holdings, Inc. (NPH), which onboarded $34.2 billion in assets in the first wave. The company refinanced its debt in 2017, issuing a $1.7 billion Term Loan B, $500.0 million of 5.75% senior unsecured notes, and $400.0 million of add-on notes. Total long-term borrowings were $2.39 billion at year-end, of which $1.5 billion carried floating rates. The company returned $204.0 million to shareholders through $90.3 million of dividends and $113.7 million of share repurchases. Risks highlighted in the filing include a putative class action lawsuit related to share repurchases and financial performance in late 2015, ongoing regulatory matters including blue sky compliance, and uncertainty around the Department of Labor fiduciary rule, whose full implementation was delayed to July 1, 2019. The filing also notes that the Tax Cuts and Jobs Act reduced the federal corporate tax rate from 35% to 21%, producing a one-time net tax benefit of $8.8 million in the fourth quarter of 2017. The company's effective tax rate was 34.5% for 2017. Total payout ratio to advisors increased to 86.67% from 85.91%.
Feb 27, 2018
2017
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2017
LPL Financial Holdings Inc. (NASDAQ: LPLA) reported net income of $238.9 million, or $2.59 per diluted share, for 2017, up from $191.9 million, or $2.13 per diluted share, in 2016. Net revenues rose to $4.28 billion from $4.05 billion, driven by higher asset-based fees (largely cash sweep revenue tied to federal funds rate increases) and advisory fee revenue. The filing describes the company as the nation's largest independent broker-dealer, serving more than 15,000 independent financial advisors with about 4.8 million client accounts. Total brokerage and advisory assets served reached $615.1 billion at year-end 2017, versus $509.4 billion a year earlier, with net new assets of $43.4 billion compared with $5.9 billion in 2016. Growth in 2017 was supported by the acquisition of certain assets of National Planning Holdings, Inc. (NPH), for which the company paid $325 million at closing and agreed to a potential contingent payment of up to $122.8 million. The company also refinanced its debt in 2017, issuing a $1.7 billion Term Loan B and $900 million of 5.75% senior unsecured notes in total, and returned $204.0 million to shareholders through dividends and share repurchases. Total indebtedness at December 31, 2017 was $2.4 billion, of which $1.5 billion bears floating rates. The filing also highlights ongoing risks. The Department of Labor fiduciary rule became applicable on June 9, 2017, with certain exemption conditions delayed to July 1, 2019, and the company expects increased compliance costs. The company has a number of pending regulatory matters, including state "blue sky" compliance, and a putative securities class action relating to share repurchases and financial performance in late 2015. Management expects the costs of the NPH onboarding to be largely complete by mid-2018.
Feb 21, 2018
2016
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2016
LPL Financial Holdings Inc. reported net revenues of $4.05 billion for 2016, down from $4.28 billion in 2015, while net income rose to $191.9 million, or $2.13 per diluted share, from $168.8 million, or $1.74 per share. Management attributes the earnings improvement to increased cash sweep revenue and transaction and fee revenue, expense discipline, and a lower share count. Commission revenue fell 12.1% to $1.74 billion, driven by lower sales of alternative investments, variable annuities and mutual funds, while advisory revenue declined to $1.29 billion. Asset-based revenue rose 12.7% to $556.5 million, largely because cash sweep revenue more than doubled to $173.7 million from $95.3 million. Total advisory and brokerage assets served reached $509.4 billion at year-end 2016, up 7.1%, though net new assets slowed to $5.9 billion from $9.1 billion. Net new brokerage assets were outflows of $7.8 billion, reflecting the departure of an institutional client that was acquired by a bank with its own broker-dealer. Recurring revenue was 74.4% of net revenue in 2016, and the company reported total indebtedness of $2.2 billion with compliance with both financial covenants. The filing highlights regulatory risk, most notably the Department of Labor fiduciary rule (the DOL Rule), which was scheduled to become applicable on April 10, 2017 unless delayed or changed and is expected to increase compliance costs. The company also disclosed an accrual for a regulatory matter involving sales of certain securities and a putative class action lawsuit related to share repurchases and financial performance in late 2015. The board declared a quarterly dividend of $0.25 per share on February 24, 2017.
Feb 24, 2017
2015
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2015
LPL Financial Holdings Inc. reported net revenues of $4.28 billion for 2015, down 2.3% from $4.37 billion in 2014, while net income fell to $168.8 million from $178.0 million. Diluted EPS was $1.74 versus $1.75 in 2014, and Adjusted Earnings per diluted share declined to $2.22 from $2.44. Commission revenue dropped 6.7% to $1.98 billion, driven by weaker sales of alternative investments, annuities, mutual funds and equities, while advisory revenue rose 1.1% to $1.35 billion and asset-based revenue rose 3.6% to $493.7 million. The company described roughly 72% of 2015 net revenue as recurring. Brokerage and advisory assets were $475.6 billion at year-end, roughly flat with $475.1 billion a year earlier, as net new advisory assets of $16.7 billion were largely offset by market declines. Advisory assets under custody grew to $187.2 billion, and Hybrid RIA assets reached $118.7 billion. The company served more than 14,000 independent advisors and reported 3,410 full-time employees at year-end. Capital returns were significant: the company repurchased $390.8 million of stock in 2015 and paid $95.8 million in dividends. Total indebtedness rose to $2.2 billion after a November 2015 credit agreement amendment that added $700 million of term B loans. The company reported it was in compliance with its financial covenants, with a leverage ratio of 3.8 against a 5.0 maximum. Management also disclosed an accrual for a significant regulatory matter relating to sales of certain securities, and flagged the proposed Department of Labor fiduciary rule as a key future risk.
Feb 25, 2016
2014
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2014
LPL Financial Holdings Inc. (LPLA) describes itself as the nation's largest independent broker-dealer, a top custodian for registered investment advisors, and a leading independent consultant to retirement plans, serving more than 14,000 independent financial advisors, including advisors at more than 700 financial institutions. The company reported 2014 net revenues of $4.37 billion, up from $4.14 billion in 2013, and net income of $178.0 million, compared with $181.9 million in 2013. Diluted earnings per share were $1.75, versus $1.72 in 2013. Adjusted EBITDA was $516.5 million and Adjusted Earnings were $247.6 million, or $2.44 per diluted share, flat with 2013. Advisory and brokerage assets reached $475.1 billion at year-end 2014, and advisory assets under custody reached $175.8 billion. The filing highlights a shift toward recurring revenue, which was $2.99 billion, or 68% of net revenue, in 2014. The company also flagged that fee compression on its cash sweep programs is expected to increase further in 2015 and 2016 because of the low interest rate environment. Total debt was $1.63 billion at December 31, 2014, and the company repurchased $275.1 million of common stock during 2014 while paying $95.6 million in dividends. The Service Value Commitment restructuring program is expected to be completed in 2015, with total charges of approximately $68.0 million and expected annual pre-tax savings of approximately $32.0 million. The company reported that its internal control over financial reporting was effective as of December 31, 2014, and that it was in compliance with all covenants under its senior secured credit agreement. Legal and regulatory exposure beyond amounts accrued could range from $0 to $15 million, according to the filing. On February 18, 2015, the board declared a quarterly dividend of $0.25 per share, payable March 16, 2015.
Feb 20, 2015
2013
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2013
LPL Financial Holdings Inc. (LPLA) reported net revenues of $4.14 billion for 2013, up from $3.66 billion in 2012, and net income of $181.9 million, or $1.72 per diluted share, compared with $151.9 million in 2012. The company describes itself as the nation's largest independent broker-dealer, a top custodian for registered investment advisors, and a leading independent consultant to retirement plans, supporting more than 13,600 independent financial advisors and 3,185 employees. Advisory and brokerage assets reached $438.4 billion at December 31, 2013, up from $373.3 billion, and advisory assets under custody were $151.6 billion. Recurring revenue was 65% of net revenue in 2013. Total debt was $1.54 billion at year-end, with a senior secured credit facility and a leverage ratio of 2.34 against a 4.25 covenant maximum. Adjusted EBITDA was $511.4 million and Adjusted Earnings per diluted share was $2.44. The company returned capital through $219.1 million of share repurchases and $68.0 million of dividends paid in 2013. In February 2014 it declared a $0.24 quarterly dividend, expanded its repurchase authorization by $150.0 million to $218.0 million, and repurchased 1.9 million shares from TPG Capital for $100.0 million. The filing also highlights the Service Value Commitment, a program expected to be completed in 2015 with total charges estimated at $65.0 million and expected annual pre-tax savings of approximately $30.0 million by 2015. Key risks noted include dependence on attracting advisors, sensitivity of cash sweep revenue to low interest rates, regulatory change under the Dodd-Frank Act, and reliance on outsourced service providers.
Feb 26, 2014
2012
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2012
LPL Financial Holdings Inc. describes itself as the nation's largest independent broker-dealer, a top custodian for registered investment advisors, and a leading independent consultant to retirement plans. It supports more than 13,300 independent financial advisors and advisors at approximately 700 financial institutions, and reports net revenues of $3.66 billion for 2012, up 5.2% from $3.48 billion in 2011, with net income of $151.9 million (diluted EPS of $1.37) compared with $170.4 million in 2011. Recurring revenue was 65% of net revenue in 2012, and advisory and brokerage assets reached $373.3 billion at December 31, 2012. Capital returns were significant in 2012: the company paid a $2.00 per share special dividend ($222.6 million), began quarterly dividends of $0.12, and spent $199.2 million repurchasing shares. On February 5, 2013 it declared a $0.135 quarterly dividend and expanded its Service Value Commitment, a program expected to be completed in 2015 with total charges of approximately $70 million to $75 million, including pre-tax restructuring charges of approximately $60 million to $65 million. Total debt was $1.3 billion at year-end, with a total leverage ratio of 2.38 to 1.00 against a covenant maximum of 4.00. Key risks highlighted include dependence on attracting and retaining advisors, sensitivity to market levels and interest rates (the low-rate environment has pressured cash sweep revenue), intense competition, extensive regulation including the Dodd-Frank Act and potential fiduciary standards, reliance on outsourced service providers, and the Sponsors' ownership of 43.1% of common stock, which gives them significant influence over stockholder votes.
Feb 26, 2013
2011
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2011
LPL Investment Holdings Inc. reported net revenues of $3.48 billion for 2011, up 11.8% from $3.11 billion in 2010, and net income of $170.4 million, or $1.50 diluted earnings per share, compared with a net loss of $56.9 million in 2010. The 2010 loss reflected a $222.0 million share-based compensation charge tied to the November 2010 IPO. Adjusted EBITDA rose to $459.7 million (11.3% growth stated in the filing) and Adjusted Earnings to $218.6 million, or $1.95 per diluted share. Commission revenue was $1.75 billion, advisory fees $1.03 billion, and recurring revenue was 63% of net revenue. Advisory and brokerage assets totaled $330.3 billion at December 31, 2011, including $101.6 billion in advisory assets under management. The company serves approximately 12,800 advisors and reports 12,847 advisors as of year-end, with a stated advisor production retention of 96%. Its open-architecture, self-clearing model pays advisors 85 to 90% of commission and advisory revenue. Total indebtedness was $1.3 billion at December 31, 2011, and the company was in compliance with its senior secured credit agreement covenants, with a leverage ratio of 1.77 against a 3.00 maximum. Cash and cash equivalents rose to $720.8 million. Risks highlighted include dependence on attracting and retaining advisors, sensitivity to market levels and interest rates (including low returns on cash sweep balances), regulatory and FINRA oversight, and a majority ownership position held by the Majority Holders at 61.9%. The filing also describes pending and completed acquisitions, including Concord Wealth Management (closed June 2011, total consideration about $33.8 million) and the announced acquisition of Fortigent Holdings Company, Inc., which had more than $50.0 billion in advisory assets. It also discloses a UVEST consolidation expected to generate $10.0 million to $12.0 million per year in pre-tax profitability improvements upon completion of integration.
Feb 27, 2012
2010
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2010
LPL Investment Holdings Inc. reported a net loss of $56.9 million for 2010 (diluted loss per share of $0.64), compared with net income of $47.5 million in 2009, driven primarily by a $222.0 million share-based compensation charge and $240.9 million of equity issuance and IPO-related costs recorded in connection with its initial public offering, which closed in November 2010 at $30.00 per share. Net revenues rose 13.2% to $3.11 billion, led by a 22.2% increase in advisory fees and a 9.7% increase in commissions, while total advisory and brokerage assets grew to $315.6 billion and the company supported 12,444 advisors. Adjusted EBITDA increased to $413.1 million and Adjusted Earnings to $172.7 million ($1.71 per diluted share), both non-GAAP measures the company emphasizes. The company's balance sheet carried $1.39 billion of senior secured credit facilities and subordinated notes at year-end, after it refinanced in May 2010 by redeeming $550.0 million of 10.75% notes with a new $580.0 million term loan maturing in 2017. Management reported that it was in compliance with all covenants, with a leverage ratio of 2.64 against a 3.70 maximum and interest coverage of 4.81 against a 2.60 minimum. The company also disclosed that it expects approximately $237.3 million of total tax benefits from the IPO-related deductions, and that the Majority Holders own about 62.9% of common stock, which gives them significant control over stockholder matters. Investors should weigh the company's strong revenue recovery and recurring-revenue base, which it stated was over 60% of revenue in 2010, against the reported loss, the heavy reliance on advisor retention, exposure to low interest rates on its cash sweep programs, and the lock-up expiration in mid-May 2011 that could pressure the share price.
Mar 9, 2011
2009
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2009
LPL Investment Holdings Inc. reported 2009 net revenues of $2.75 billion, down from $3.12 billion in 2008, while net income rose to $47.5 million from $45.5 million. The company describes itself as a leading provider of technology, brokerage and investment advisory services to independent financial advisors, financial advisors at financial institutions, registered investment advisors and financial institutions. It reported 11,950 financial advisors, 3.9 million funded client accounts and $279.4 billion in client assets as of December 31, 2009, and it states it was the largest independent broker-dealer as reported by Financial Planning magazine from 1996 through 2009. The decline in revenue was driven mainly by market conditions. Commission revenue fell 9.9%, advisory fees fell 15.2% and asset-based fees fell 22.5%, the last reflecting lower interest rates that reduced cash sweep fees. Restructuring charges rose to $58.7 million from $15.0 million, tied to the 2008 strategic business review and the 2009 consolidation of the Affiliated Entities into LPL Financial. Management expects that consolidation to cost about $74.2 million in total and to produce annual savings of $29.8 million. Leverage remains significant. At year-end the company had $1.37 billion of senior credit facilities and subordinated notes, including $550.0 million of 10.75% senior unsecured subordinated notes due 2015. Operating cash flow was $271.2 million, and the company states it was in compliance with its covenants. The Majority Holders, investment funds affiliated with TPG and Hellman & Friedman, own approximately 57.1% of capital stock on a fully diluted basis. There is no established public trading market for the common equity, and no dividends have been paid in the past four fiscal years.
Mar 9, 2010
2008-A
LPL Financial Holdings Annual Report (Amendment), Year Ended Dec 31, 2008
LPL Investment Holdings Inc. filed this Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2008. The amendment was made solely to correct the inadvertent omission of the auditor's signature on the Report of Independent Registered Public Accounting Firm in Item 8; the filing states there are no other changes to the original 2008 Form 10-K. The financial statements included show total revenues of $3,117,130 thousand in 2008, up from $2,717,605 thousand in 2007, and net income of $45,496 thousand, compared with $61,069 thousand in 2007. Total noninterest expenses rose to $2,905,652 thousand from $2,485,246 thousand, and commissions and advisory fees were $2,132,050 thousand. The balance sheet at December 31, 2008 shows total assets of $3,381,779 thousand, including goodwill of $1,293,366 thousand and intangible assets of $654,703 thousand, and total liabilities of $2,591,467 thousand. Senior credit facilities and subordinated notes totaled $1,377,647 thousand in long-term liabilities, and total stockholders' equity was $790,312 thousand. The filing notes a $550.00 million senior unsecured subordinated note bearing 10.75% interest due December 15, 2015, and a $90.00 million drawn balance on a $100.00 million revolving line of credit at December 31, 2008. During 2008 the company recorded $14.97 million in restructuring charges tied to a workforce reduction implemented on December 29, 2008. The company also issued 7,423,973 restricted shares to financial advisors in exchange for bonus credits under its amended Stock Bonus Plan, and the non-affiliate aggregate market value of voting stock was stated as zero.
Apr 3, 2009
2008
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2008
LPL Investment Holdings Inc. (now LPL Financial Holdings Inc.) reported total revenues of $3.12 billion for 2008, up from $2.72 billion in 2007, while net income fell to $45.5 million from $61.1 million. The company describes itself as a provider of technology, brokerage and investment advisory services to independent financial advisors, registered investment advisors and financial institutions, with 11,920 financial advisors licensed with its broker-dealer subsidiaries and $234 billion in client assets as of December 31, 2008. Revenue growth was driven largely by acquisitions of UVEST, IASG and IFMG, while production expenses (commissions and advisory fees paid out to customers) rose to $2.16 billion, with a stated production payout of 86.3% in 2008. Investors should weigh the company's leverage and cost pressures. Total indebtedness was $1.47 billion at December 31, 2008, including $550.00 million of 10.75% senior unsecured subordinated notes due 2015. Adjusted EBITDA rose to $360.0 million from $342.4 million, and the company recorded a $14.97 million restructuring charge tied to a workforce reduction of about 275 employees. The company stated it paid no dividends in the past three fiscal years and does not plan to pay dividends, and that there is no established trading market for its common equity. The Majority Holders, TPG and Hellman & Friedman, own approximately 60% of capital stock on a fully-diluted basis and have significant influence over corporate decisions.
Mar 24, 2009
2007
LPL Financial Holdings Annual Report, Year Ended Dec 31, 2007
LPL Investment Holdings Inc. (now LPL Financial Holdings Inc.) reports a 2007 year in which total revenues rose to $2.72 billion from $1.74 billion in 2006, and net income increased to $61.07 million from $33.64 million. The growth was driven by commission and advisory revenue, an increase in the number of licensed advisors to 11,089 at December 31, 2007 (from 7,006), and four acquisitions completed in 2007, including UVEST, IASG (Affiliated Broker-Dealers) and IFMG. The filing states that 2007 acquisitions added $412.75 million of revenue, and that excluding them, the number of overall FAs grew 15.2%. Profitability and leverage remain significant considerations. Income before taxes was $107.83 million, but interest expense from senior credit facilities and subordinated notes was $122.82 million. Total indebtedness was $1.45 billion at year-end, including $550.00 million of 10.75% senior unsecured subordinated notes due 2015. Operating cash flow fell to $10.07 million from $139.23 million in 2006, which the company attributed largely to increased segregated customer cash requirements. Total assets were $3.29 billion and stockholders' equity was $747.17 million. Ownership and governance are concentrated. Investment funds affiliated with TPG and Hellman & Friedman own approximately 59.3% of capital stock on a fully diluted basis, and the company states there is no established trading market for its common equity. The filing also discloses a FINRA complaint filed July 23, 2007 against subsidiary Mutual Service Corporation, for which the company states it is indemnified by prior owners.
Mar 31, 2008