Rich Steinmeier, who was recently appointed to the role of CEO at LPL Financial after the unexpected the dismissal of Dan Arnold earlier this month, led its first quarterly earnings call on Wednesday, along with Matt Audette, CFO and president. There were no new details on the reasons behind the latest leadership change, and Steinmeier, a longtime LPL executive, did not indicate any major changes in the firm's overall strategy.
“Our opportunity is clear: to assert our leadership and shape the advisor and institutional market,” Steinmeier said in his opening remarks.
He outlined three top priorities for the firm that emerged from discussions with the newly formed management committee.
“The first is, we need to maintain the client focus that this firm is known for – which is serving our advisors and our institutions and allowing them to serve their end clients with distinction,” he said. “It's what the firm was built on, and so for us that's one of the top priorities as we move forward making sure we don't lose sight of what makes us special.”
His second priority, which he noted was a “slight pivot” from the previous leadership agenda, is to give more decision-making power to the firm's employees.
“It's the ability to take employees who sit at all levels of this firm who are deeply connected to our clients and empower them to make decisions to help those clients succeed in whatever for them to define it,” he said.
Giving employees the information they need to make those business decisions will “allow us to feel more nimble and more direct in serving customers,” he said.
Steinmeier's third priority is to “boost operating leverage,” he said. The firm has grown rapidly over the past several years, moving into several different service areas and membership models for advisors. He pointed to Audette's expanded role, taking on operations, service, compliance and oversight duties, as a step towards bringing the pieces together at the operational level.
He also emphasized that the firm's success has not been based on the advisors' relationship with the CEO.
“These relationships that we have with our customers have been built over years and decades,” he said. “But it's not the relationship with me as CEO. There are relationships with relationship managers, advisory consultants, branch managers, supervisory consultants, transition specialists. What I've seen in the last three weeks is that those employees have stepped up in a big way.”
LPL reported $26 billion in assets raised during the third quarter, down from $24 billion in the second quarter, but down from $31 billion in the year-ago period. This included $23 billion raised in its traditional independent channel. New tie-up models, including LPL's Strategic Wealth Services, employee and RIA offerings, attracted $3 billion in assets during the quarter. The firm posted $87 billion in leveraged assets for the trailing 12-month period, up about 12% from a year earlier.
The number of IBD advisors was 23,686 at the end of the quarter, 224 sequentially and 1,282 year-over-year.
Earlier this month, LPL was shut down acquisition of Atria Wealth Solutionswith 2,200 advisors and 160 banks and credit unions and $110 billion in assets. Audette said the firm is on track to meet an 87% retention rate. And this business is estimated to deliver an EBITDA rate of $150 million, up from the initial estimate of $140 million.
The firm ended the quarter with $1.6 trillion in total advisory and brokerage assets, up 29% year over year. Total organic net new assets were $27 billion, an annual growth rate of 7%. Excluding the exit of several large supervisory jurisdiction offices, total new organic net assets were $33 billion, an annual growth rate of 9%.
According to SeekingAlpha.com. Adjusted earnings per share rose 11% from a year earlier to $4.16, beating expectations by 45 cents.