LPL Financial Holdings Inc

LPL Financial is the largest US independent broker-dealer, with nearly 29,000 financial advisors affiliated with its platform and roughly 10 million associated customer accounts at the end of 2024. The firm earns the bulk of its profit from interest income earned on client cash balances and from advisory fees and commissions tied to the $1.7 trillion in assets under management or advisory on its platform at year-end 2024. LPL specializes in the provision of turnkey wealth management services for affiliated independent advisors, but maintains a diverse array of affiliation modalities, running the gamut from more traditional employee models to a pure RIA custody approach. It earns tuck-in revenue from recordkeeping fees and the provision of software tools and services to its advisor base.

Sentiment Score: +24

Sentiment Change: +33

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LPL Financial Holdings Inc Earnings - Q3 2025 Analysis & Highlights

Key Takeaways

LPL Financial Holdings Inc (LPLA) Q3 2025 earnings call covered key financial achievements including record asset growth and EPS, driven by the acquisition of Commonwealth Financial Network and solid organic growth. Strategic initiatives, advisor recruiting, and cost efficiencies were also discussed, alongside future plans for pricing adjustments and capital deployment.

Key financial results:

Total assets increased to a record $2.3 trillion, driven by the acquisition of Commonwealth and solid organic growth and higher equity markets.

Organic net new assets of $33 billion, representing a 7% annualized growth rate.

Record adjusted EPS of $5.20, an increase of 25% from a year ago.

Gross profit was $1.479 billion, up $175 million sequentially.

Adjusted pre-tax margin of approximately 38%.

Business segment results:

Recruited assets were $33 billion in Q3, bringing the total for the trailing 12 months to a record $168 billion.

Traditional independent market added approximately $12 billion in assets during Q3.

Strategic wealth, independent employee, and enhanced RIA offering recruited roughly $3 billion in assets.

Onboarded First Horizon with $18 billion of AUM, of which $17 billion transitioned onto the platform in Q3.

Capital allocation:

Capital deployment focused on supporting organic growth and M&A.

Closed Commonwealth acquisition and continued to allocate capital to liquidity and succession solutions.

Share repurchases remain paused until Commonwealth is onboarded.

Industry trends and dynamics:

Depressed industry-wide advisor movement, but LPL maintained its industry-leading capture rate.

The firm is seeing advisor compensation changes at wirehouses, which may drive advisor churn.

Competitive landscape:

LPL has created the flexibility to serve any advisor in the evolution of their practice.

The company is the number one capturer of advisors in motion in the marketplace.

LPL's relative value proposition is the strongest in the marketplace in support of advisors.

Macroeconomic environment:

The company expects its ICA yield to decrease to roughly 345 basis points in Q4, driven by the impact of recent rate cuts.

Growth opportunities and strategies:

The company is focused on streamlining its Business Solutions portfolio to focus on high demand, high impact services.

The company plans to make additional adjustments as it evolves its offering, streamlining its services portfolio to focus on high demand, high impact services that deliver the greatest value to advisors while simplifying pricing across its advisory platforms.

The company is making targeted offsetting fee adjustments where it has been priced below the market.

The company is pursuing a multiyear journey to become increasingly more relevant to wirehouse advisors.

Financial Guidance and Outlook:

The company expects service and fee revenue to be roughly flat sequentially in Q4.

The company expects transaction revenue to be roughly $70 million in Q4.

The company is lowering its 2025 core G&A outlook to a range of $1,860 million to $1,880 million.

The company expects depreciation and amortization to increase by roughly $5 million in Q4.

The company expects interest expense to increase by approximately $5 million from Q3 in Q4.

The company anticipates Q4 interest income to decline to approximately $30 million.

The company estimates that pricing changes would increase its trailing 12-month adjusted pre-tax margin by approximately 1 percentage point in 2026.

The company's run rate EBITDA expectation has increased to approximately $425 million once Commonwealth is fully integrated.

The company is increasing its expected run rate EBITDA to approximately $155 million for Atria.

Commonwealth Acquisition:

The transaction is progressing well, and the company is on track to onboard Commonwealth in the fourth quarter of 2026.

Advisors representing nearly 80% of assets have signed to stay with Commonwealth and LPL.

The company continues to track towards its 90% retention target.

The company is ushering in a foundational shift in its advisor workstation ClientWorks, establishing a householding-based architecture.