LPL Financial is “in line” to meet its 90% advisor retention rate goal for Commonwealth Financial Network advisors after announcing the acquisition at the end of March, according to CEO Rich Steinmeier.
In a call detailing LPL’s first quarter earnings, Steinmeier acknowledged the company was still in “the early innings” of its attempts to attract and retain Commonwealth advisors, but said there was regular engagement with the Commonwealth team.
Additionally, President and Chief Financial Officer Matt Audette said while there was “a lot of activity” of competitors soliciting Commonwealth advisors with attractive recruiting packages, he didn’t think there were many “credible players” that Commonwealth advisors would view as a realistic alternative.
He particularly called out smaller players trying to “assert themselves into this market opportunity,” arguing it would be difficult for them to be competitive relative to LPL’s capabilities, particularly when the firm promised to retain the Commonwealth culture and transfer over 90% of client accounts without repapering.
“I’m sure they will have the ability to carve unique positions in the market, but I think day by day it becomes more challenging for players that are not at scale to compete effectively with firms like ourselves, who not only have scale capacity to invest but have been committed,” he said. “And I think we are unique in the marketplace in that we have committed to the flexibility to ensure that unique communities and service experiences that have first been demonstrated through our newer affiliation models, but subsequently will be demonstrated through our Commonwealth partnership where we will allow them to feel flexible and small while gaining the scale and capabilities of a leading player in the marketplace.”
In late March, LPL announced the blockbuster deal to buy Commonwealth for about $2.7 billion in cash, linking the large IBD with a firm typically celebrated for its boutique, advisor-focused feel. The deal set up LPL to attempt to bring over Commonwealth’s 2,900 independent advisors and $285 billion in client assets (boosting LPL’s advisor count to 29,000 and $1.7 trillion in assets).
According to LPL’s first quarter earnings results, total advisory and brokerage assets were $1.8 trillion, up 3% from last year’s fourth quarter and 25% year-over-year. Total organic net new assets set a record at $71 billion, with a 16% annualized growth rate.
Recruited assets dropped between quarters from $79 billion to $39 billion (though the fourth quarter number included $63 billion from LPL’s acquisition of Prudential). The $39 billion in recruited assets was still a year-over-year increase of 91%.
Commonwealth is not the only acquisition LPL has juggled; according to Audette, in the first quarter, the firm onboarded Wintrust Financial’s retail wealth business and completed the transition of Prudential advisors onto LPL’s platform (the Wintrust and Prudential acquisitions were announced in 2024 and 2023, respectively).
Those transitions impacted LPL’s total assets, with $27 billion of its assets last quarter from Prudential and $16 billion from Wintrust. According to Audette, before onboarding Wintrust’s advisors and the remaining Prudential business, LPL’s annualized growth rate was at 7%. The firm also closed and onboarded The Investment Center last quarter and is preparing to onboard First Horizon after announcing its acquisition in April.
Finally, conversions for Atria Wealth Solutions began last weekend, completing two of the seven planned. Steinmeier said LPL was on target to meet its goals of 80% retention and $88 billion in assets, and the conversions would continue through the next few quarters.
Overall, analysts at Citizens Bank wrote that LPL remained a “compelling opportunity” for investors. They said the firm is delivering “some of the best organic growth” analysts had seen in over 20 years of covering the industry, which they found notable considering LPL’s scale.
“We anticipate organic growth to accelerate further over the next couple of years, and estimate LPL could get into the double-digits (NNA rate) as its newer affiliation channels scale further,” the analysts wrote.