LPL Financial Reports Monthly Activity for August 2024

Rhea-AI Summary

LPL Financial released its monthly activity report for August 2024. Total advisory and brokerage assets reached $1.56 trillion, a 2.0% increase from July. Total net new assets were $6.8 billion, including $0.3 billion from acquisitions. Organic net new assets were $6.6 billion, a 5.2% annualized growth rate. Excluding $3.8 billion in off-boarded assets, organic growth was 8.1%. Total client cash balances decreased to $43.3 billion. Net buying in August was $12.6 billion. The S&P 500 Index ended at 5,648, up 2.3% from July, while the Russell 2000 Index decreased 1.6% to 2,218.

Positive

• Total advisory and brokerage assets increased by 2.0% to $1.56 trillion
• Organic net new assets grew at a 5.2% annualized rate, reaching $6.6 billion
• Excluding off-boarded assets, organic net new assets growth rate was 8.1%
• Net buying activity remained strong at $12.6 billion

Negative

• Total client cash balances decreased by $0.7 billion to $43.3 billion
• Off-boarding of $3.8 billion in assets from misaligned large OSJs

Insights

Financial Analyst

LPL Financial's August 2024 report reveals strong growth indicators. Total advisory and brokerage assets reached $1.56 trillion, a 2.0% increase from July. Organic net new assets were $6.6 billion, representing a 5.2% annualized growth rate. Excluding off-boarded assets, this rate jumps to 8.1%, signaling robust client acquisition and retention.

The 22.7% year-over-year increase in total assets underscores LPL's market share expansion. However, the 9.2% decrease in client cash balances to $43.3 billion suggests a shift towards invested assets, potentially boosting fee revenue but reducing interest income. The $12.6 billion net buying activity indicates investor confidence despite market volatility.

Market Research Analyst

LPL Financial's performance outpaces broader market indicators. While the S&P 500 grew 2.3% in August, LPL's assets increased by 2.0%, nearly matching the index despite including less volatile fixed-income assets. This suggests effective asset management and client trust in uncertain markets.

The company's organic growth rate of 8.1% (excluding off-boarded assets) is particularly impressive given the flat Fed Funds rate, indicating LPL's ability to attract clients in a competitive environment. The 27.7% year-over-year increase in advisory assets compared to 17.0% for brokerage assets reflects an industry shift towards fee-based models, potentially leading to more stable, recurring revenue streams for LPL.

SAN DIEGO, Sept. 19, 2024 (GLOBE NEWSWIRE) -- LPL Financial LLC (“LPL Financial”), a wholly owned subsidiary of LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”), today released its monthly activity report for August 2024.

Total advisory and brokerage assets at the end of August were $1.56 trillion, an increase of $30.8 billion, or 2.0%, compared to the end of July 2024.

Total net new assets for August were $6.8 billion, which included $0.3 billion of acquired net new assets resulting from Liquidity & Succession activity.

Total organic net new assets for August were $6.6 billion, translating to a 5.2% annualized growth rate. This included $3.8 billion of assets that off-boarded as part of the previously disclosed planned separation from misaligned large OSJs. Excluding these assets, organic net new assets were $10.4 billion, translating to a 8.1% annualized growth rate.

Total organic net new advisory assets were $5.4 billion, translating to a 7.7% annualized growth rate. Excluding the off-boarded assets from misaligned large OSJs, total organic net new advisory assets were $9.1 billion, translating to a 12.8% annualized growth rate.

Total client cash balances at the end of August were $43.3 billion, a decrease of $0.7 billion compared to the end of July 2024. Net buying in August was $12.6 billion.

(End of period $ in billions, unless noted)	August	July	Change		August	Change
	2024	2024	M/M		2023	Y/Y
Advisory and Brokerage Assets
Advisory assets	869.5	850.6	2.2%		680.8	27.7%
Brokerage assets	690.6	678.7	1.8%		590.5	17.0%
Total Advisory and Brokerage Assets	1,560.1	1,529.3	2.0%		1,271.3	22.7%
Organic Net New Assets
Net new organic advisory assets	5.4	6.8	n/m		8.3	n/m
Net new organic brokerage assets	1.1	2.2	n/m		4.7	n/m
Total Organic Net New Assets	6.6	9.0	n/m		13.1	n/m
Acquired Net New Assets
Net new organic advisory assets	0.2	0.0	n/m		0.0	n/m
Net new organic brokerage assets	0.0	0.0	n/m		0.0	n/m
Total Acquired Net New Assets	0.3	0.0	n/m		0.0	n/m
Total Net New Assets
Net new advisory assets	5.7	6.8	n/m		8.3	n/m
Net new brokerage assets	1.2	2.2	n/m		4.7	n/m
Total Net New Assets	6.8	9.0	n/m		13.1	n/m
Net brokerage to advisory conversions	1.3	1.0	n/m		0.9	n/m

Client Cash Balances
Insured cash account sweep	30.4	31.1	(2.3%)	34.7	(12.4%)
Deposit cash account sweep	9.3	9.1	2.2%	9.1	2.2%
Total Bank Sweep	39.7	40.2	(1.2%)	43.8	(9.4%)
Money market sweep	2.2	2.3	(4.3%)	2.5	(12.0%)
Total Client Cash Sweep Held by Third Parties	41.9	42.5	(1.4%)	46.3	(9.5%)
Client cash account(1)	1.4	1.5	(6.7%)	1.3	7.7%
Total Client Cash Balances	43.3	44.0	(1.6%)	47.7	(9.2%)
Net buy (sell) activity	12.6	12.9	n/m	12.7	n/m
Market Drivers
S&P 500 Index (end of period)	5,648	5,522	2.3%	4,508	25.3%
Russell 2000 Index (end of period)	2,218	2,254	(1.6%)	1,900	16.7%
Fed Funds daily effective rate (average bps)	533	533	—%	533	—%

Note: Totals may not foot due to rounding. 

(1) During the first quarter of 2024, the Company updated its definition of client cash account balances to exclude other client payables. Prior period disclosures have been updated to reflect this change as applicable.

For additional information regarding these and other LPL Financial business metrics, please refer to the Company’s most recent earnings announcement, which is available in the quarterly results section of investor.lpl.com.

Contacts

Investor Relations
investor.relations@lplfinancial.com

Media Relations
media.relations@lplfinancial.com

About LPL Financial

LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve, serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 registered investment advisor (“RIA”) firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional. At LPL, independence means that advisors and institution leaders have the freedom they deserve to choose the business model, services and technology resources that allow them to run a thriving business. They have the flexibility to do business their way. And they have the freedom to manage their client relationships because they know their clients best. Simply put, we take care of our advisors and institutions, so they can take care of their clients.

Securities and Advisory services offered through LPL Financial LLC (“LPL Financial”), a registered investment advisor. Member FINRA/SIPC. LPL Financial and its affiliated companies provide financial services only from the United States.

Throughout this communication, the terms “financial advisors” and “advisors” are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.

We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

FAQ

What was LPL Financial's total advisory and brokerage assets for August 2024?

LPL Financial's total advisory and brokerage assets for August 2024 were $1.56 trillion, an increase of 2.0% from July 2024.

How much were LPL Financial's organic net new assets in August 2024?

LPL Financial's organic net new assets in August 2024 were $6.6 billion, translating to a 5.2% annualized growth rate.

What was the impact of off-boarded assets on LPL Financial's (LPLA) organic growth rate in August 2024?

Excluding $3.8 billion of off-boarded assets from misaligned large OSJs, LPL Financial's organic net new assets growth rate was 8.1% in August 2024.

How did client cash balances change for LPL Financial in August 2024?

LPL Financial's total client cash balances decreased by $0.7 billion to $43.3 billion at the end of August 2024 compared to July 2024.