LPL Financial (LPLA) 31 Oct 202020 Q3 Earnings call transcript

Good afternoon. And thank you for joining Third Quarter 2020 Earnings Conference Call for LPL Financial Holdings Inc.

Joining the call today are President and Chief Executive Officer, Dan Arnold; and Chief Financial Officer, Matt Audette. Dan and Matt will offer introductory remarks and then the call will be open for questions. [Operator Instructions] The company has posted its earnings press release and supplementary information on the Investor Relations section of the company’s website, investor.lpl.com. opportunities forward-looking operating statements and results, well our include future LPL plans, will that as and risks financial outlook, other call statements, about including Financial’s as management Today’s foresees. potential and business strategies those or such timing reflect known subject differ of risks uncertainties events estimates unknown forward-looking actual cause from and that are to Such forward-looking may current expressed results beliefs in statements and management’s statements. or to implied and or materially the put disclosures well the the to factors uncertainties. listeners the to refers Exchange for earnings the as company Statements Securities Forward-looking release, and in Commission and the with more as under in recent contained The caption risk filings information company’s and risks other about press disclosures the such

will certain discuss call, During non-GAAP company the the measures. financial also

to reconciliation the financial will of please Arnold. investor.lpl.com. With non-GAAP GAAP that, figures, call be to at now the the such earnings a found measures company’s I comparable over For to turn release, can which Mr. refer

Thank today. you, joining our to call thanks Chris, for everyone and

past a just continue through throughout to advisors. with of an change Their quarter, our of stronger momentum grow to credit our We and going by care our our a enhancing this taking they This managing worth and of much provide and to employee new of needed is care a operate who environment. commitment have unfailing of attract creating driving matter financial our changed many this advisors Americans environment advisors our how support to year’s the the our in advisors, who opportunities as dedication and with agility to their clients. have serve this engage is take how to the We inspired create constraints in of forward. several pace done remained change value responded to ingenuity advice new millions and to has employees working believe solve talent. by this challenging so their challenges of the take our mission can the to on is This and new care focus of serve in Over how even we and We we position advisors, best business long-term opportunity us an is with our of work year our industry. additional entered advisors we change puts see months. environment clients for conditions

strategic new path helps higher business continue easiest increased will in the increases plan. and our advisors we our turn, will a in let’s on to platform well a market-leading advisors, thriving and perfect help forward key us which invest. business. to platform, and priorities market of to win creation. practice we Doing now our growth, and ahead, this the moving the looking on marketplace, scale organic components to sustainable long-term quarter capacity executing the the advisors is Now the our how also leadership run to construct deliver are investing and that that in shareholder mind, attracts focus third turn discuss context value for in of a us while gives our levels place This With

$XXX are and is reached advisory growth our a start executing assets translating we organic deliver high equity grow to to continued driven After let’s our In our new quarter, are on billion, the consistently year total market assets. continue Now how priorities over over XX% business from with ago our third by to advisory now results. a investing a of of XX% appreciation. platform, and up leading assets

to rate $XX assets at growth new nearly consistent rate. our the a billion high brought to in X% last annualized net $XX over assets net of growth These $XX new of months. the driven organic months, high annualized to of This to were X% which billion, in translates a growth to a translated Moving remained were growth, continued rates and our outcomes, primarily payments solid respect growth across half our which technology billion and growth business our models, XX new in year. enhanced and increased by experience. the In in quarter, retention. and the of third assets solid past to store $XX.X July and execution the summer new was respectively, advisor expected. seasonality in XX driven throughout Organic tax solid to quarter, sales develop over continued affiliation the August, service driven billion appeal impact and same-store development flexibility by sales, and with After of our With first the over by model the strength recruited new organic September, client results team. contributed third the we continued X% capabilities by service of experience the was evolving quarter as a

result, the nearly a As first up a ago. quarters percentage from of year, over the remained through three year retention points XX% X

traditional experience the is annual One our contributors national our advisor of to conference.

in-person online, rather due number having to connection of people Now environment, to as appreciated enabled center found moving the of experience. participate advisors digital cancel pivoted the industry. delivered expense of informative content we twice year, By a August the is savings a the the the believe we said, our importance to personal the the shared and from in not event both and than travel. That and we interaction continue last to our as time at of conference in this quarter and engaging approach we

Given we a formats structurally forward. of in-person leverage the going deliver evolve mix to these and and have how conferences digital opportunity our learnings, we

to solid outcomes quarter $X.XX. financial of business prior EPS also led third intangibles results Our to with

we made Let’s now our turn to strategy. the progress executing have on

for ahead, collectively look serve are compete continue believe market share. we advisors and our see we to demand to As additional well-positioned we growing advice and for

executing on remain our focused this, four Now we strategic in plays. light of

the the With This bank which increase to same $X the practices achieving rate our markets, continue recruiting rates our by At involves and over markets traditional time, new first repeatable also and where combination include is channel. increase Strategically, are play, to trillion a winning expanded expand win only we respect Our us highs $XX trillion. time. in from to which believe of traditional but practices. continue also to higher their our in we to growth affiliation growth, organic third-party new sustainable to leveraging reminder, our while as our in leadership the positions deliver also strategic this our drive benefiting attracting solid they larger results, market to to throughout markets, not evolution quarter. pipeline, meeting advisors we dynamic addressable models

brokerage institutions. advisory in and business launching respect support we As more year. Their agreement with value this an a we to its Bank. billion leading half banks the we to to their expand and the our addressable solid seeing summer, two move Together, BMO reminder, are their financial our representative and July, work we independent month, growing. to traction. their grow Harris our affiliation to model large serve Harris platform. our are signed Advisors Financial look We Bank our of Earlier institution, helping agreement M&T approximately advisory models signed is are retail prospective an the with And leading plans platform of assets employee business, with and our expansion proposition in these of continue in another XXX and brokerage transition BMO and new to markets, pipeline them advisors clients, first doing forward business. next $XX this interest from advisors to onto After gain retail serve

added the assets this which billion. Strategic also third more model two Services practices approximately on Wealth to We $X in bring quarter, recruited

momentum believe our new organic that they to affiliation rate models We see can time. growth increase and are building encouraged our over help

new our opportunistically Chicago. acquired Our Within week, spirit, delivery advisory as and focused providing that certain earlier existing In capabilities an advisors second trading the attract developing advisors on strategic are differentiate platform to we as marketplace this capabilities, is accelerate solutions. focused play new using to of that in this our play, help based strategic on internally M&A platform. Portfolio, Blaze we well the

strategic piece shift increasing advisors of As is the its more as advisor practices. especially a context, models-based foundational value trading to workflow and

from clients. capabilities trading provide deliver and will solution more to a to and enables experience we dynamic that flexible the their advisors engaging rebalancing Blaze, more With personalized and

strategic third our to an industry-leading delight advisors which move involves to experience clients. their play, Let’s creating and

of One this a parts play of model the key client service our model. transforming care into strategic is

organization, advisor service a provide we with delivered by omnichannel advisors As model at that our service manner rolled solid and NPS an scores. to management differentiated across for case solutions is and and capabilities. management our them works a and in case complex a time omnichannel self-help platform, best bringing a contribution designed our together reminder, After out to experience this they

call now provide model are client of to service online, next to make using analytics We over having a which category increase content work advisor’s to to each and needs without call. speech fine-tune will an relevant that and from works, capabilities easy our The is to navigate and within and monitor time. value performance big ever continue self-help learn solves

NPS is their channels contributing drive helping of and the our the ongoing for and enhancement to convenience one to access to experience easiest of for self-help goal LPL, and while make navigate Our practices, efficiency advisors advisor scores.

marketplace. advisors run the is successful Our in focused fourth independent play helping most strategic the on businesses

key of play the of components this One Solutions. Business is

the COVID-related now As Solution. a admin, changing and solve proven a more through expanded learn have offerings Plan that environment. have stronger of also advisors CFO like services, and this of The we our our value, developing and Assurance ways needs, leverage applicable we climate in innovation to utility as to proved solutions environment are our portfolio are across Office and these are and original different marketing delivering move new continuing to for and challenges. adapt to be we more to changing By a for catalyst broader advisors Remote year, seen advisors’ challenging Solutions, new

over subscriptions As continued clients, a quarter, at driving value the the Business invest end while doubled their and year proposition and in for advisors X,XXX to of the leadership. In Solutions the we past the summary, quarter. in our to our result, market third have increasing third growth

value. the we to further to that, strategy drive turn long-term ahead, our executing differentiate the on As shareholder on focused our Matt. we remain With call will in and help look and to over I win marketplace advisors

on the Dan. third and value. to on business focused I speak In Thank you, delivering growing our advisors, our call. remain am serving we with glad And everyone quarter, today’s shareholder

large continue and drive expenses. we to and on did bank signed disciplined another of remaining closed these all strong growth, We on while recently three organic acquisitions

drive ahead, to we value. growth increasing and As opportunities organic long-term about look our shareholder we are excited

of high Now million, advisory $XXX organic from and new quarter continued total assets higher let’s results, turn to to increased our and by driven growth equity third up brokerage markets. X% a QX,

at Looking $XX.X assets annualized organic growth, a net rate. billion or new were total growth X.X%

with up results organic the summer increased X.X%, September at impact and seasonality. July Our payments included from August two growth which tax the months was as quarter client those and from throughout

retention, of two are Moving key on and which recruiting drivers growth. to organic

We the over same time, continued quarter. assets $XX.X to XX-month the brought which were $XX.X QX, our Recruited retention third in remained results year-to-date. strong At total in XX% to produce billion billion.

$X.X at Looking new Centrally new annualized assets annualized in platforms billion we grow over brought Managed XX% our of or net were which $XX.X positive assets also net QX. continue to continued mix, rate. as business advisory XX% trends growth growth assets to total. or a our rate, XX% Advisory to billion an see were

to results, organic to strong $X.XX. let’s EPS discipline to growth combined Now led with our expense of intangibles financial QX turn prior

net $XXX QX, they and primarily by commission payout, were commissions. fees higher of from million, up at million Looking advisory $XX fees driven and advisory

up sponsor average organic Moving asset-based as revenues and by on QX, increased, sequentially in driven equity $XXX to higher assets $XX million markets million revenues, were growth.

revenues, they rates. from primarily down were by million lower $X cash million, driven client interest short-term $XXX to Turning QX,

Looking remained cash at $X more $XX at they client billion elevated closely balances, sequentially. billion, up

LIBOR lower as points, matured ICA basis down yields, basis the rate was that points as driven $X.X quarter. from decrease As QX X QX. our for was contracts yield XXX rates, cash primarily fixed The billion of during well by client

in Looking ahead of full QX, as occurred have another maturing. $X.X that the billion impact to in of rate will as contracts the quarter fixed QX, well we decline LIBOR

sequentially. expect and were XX rates, yield factors to client QX, and at points decrease cash interest Given we the ICA by balances of these rates end our QX about basis where

sequentially, to revenues, were on Moving by they flat and QX and fee lower driven higher million transaction fee revenue trade. $XXX

with August in and volumes July trading more While normalized returned to levels, September increased market volatility. along

normalized highlight levels. returned that to volumes would QX, I more our to have ahead Looking October

Turning profit, XXX Solutions, help double continue of additional ago. year roughly to last X,XXX quarter end free Business business. their a up our total gross offerings recurring importantly, These to generate more of clients they This from and to their at subscriptions from and time the QX. million up with and scale annual advisors $XX serve they grow is

to organic turn up starting affiliation $XXX technology and growth was million expenses new let’s drive with G&A. Now continue models, Core service. sequentially, as $X in It to million invest our to we across QX,

we Looking of ahead remain $XXX in our million. lower Core G&A outlook to $XXX QX, track half be on to of million range the to XXXX

to conference. $XX $XX million in our national driven were by million sequentially, on promotional advisor expenses, up Moving they primarily QX,

seasonal Looking and anticipate ahead assistance. to QX, offset continued by we marketing in conference transition recruiting expense, growth partially lower

by $X expense promotional to As from million a expect QX result, QX. decrease we about

our rate, we in on XX% positive it that of tax expected from was expense below range XX%, a our to a benefited decision was QX. considered XX% non-deductible. is to This Turning prior as

on allocation, of for credit Moving our remains of million. enabler and QX, balance corporate key us to growth deploy remained agreement use sheet organic arise. opportunities capital $XXX positions strong capital balance to in leverage our sheet strength cash and of available X.XX with times when The a at net

As for aligned capital pursuing allocating the investing returns growth in with and generate, organic framework excess appropriate remains M&A and shareholders. focused capital our where on returning foremost, to opportunities we deployment, first capital

year. M&A, organic increasing for As including allocate we next and see growth to M&T look BMO we capital forward, assistance transition opportunities and to

we investing excited long-term strong With and closing, delivered capital deployment In flexible to of repurchases. for opportunities, grow create we set organic QX, as call quarter prioritizing continue plans we evolves, are our advisors, allocating to the questions. another our to we capital the will M&A. please said, adjust currently and will opportunities we That and shareholder and results these we in serve stay our we to including growth as share forward, Given about the that, look Operator, business remain open value. see opportunity

And Instructions] first from [Operator our of comes Katz you. Bill Citigroup. Thank question the with line

line is Your open. now

very question. evening, Okay. much Good the taking for you Thank everybody.

want maybe or resonating growth you little four marketplace. it take I seeing, versus really picture, different bit three assets, marketplace the down big that very to the between one driving particularly maybe your start speak resonating of Dan, new new maybe as what’s channels unpack obviously, the to recruited the the that organic the that’s detailed in sort strong things channels traditional a net the and Could with in are maybe so So, you both as well are you assets?

Yeah. Thanks, Bill.

take follow-on, you then that at please you little and away. try stab to fire give and a a if I color me Let a have got will

investments serve our So and look growth. we look to and if parts you or right? of and retention, are new or look, doing that serve growth in strategically if how different meant think match store from foremost think, about of the formula. that any they And across our that at I make that parts We, you model, all first same-store are sales market we sales, the we support models of to the

high So we for brought to $XX good the record sales, in that would was back trailing where assets, that. the in have that which is billion obviously making us, we results a is new progress. record I done, in referenced over which that have will XX-month oar high see in recruiting so store come in reinforce we water the

are. that existing a the This their of is years. that and more sustained clients existing I for couple with of value rewarded more think those growth getting that clearly, last clients, to support similar that’s the over service where is opportunity from on by prior ultimately different a itself XXX couple sales then and mix has forward and which value in the a out years. shift of rate, ability retention over of advisors play from advisor’s future the experience, going model that year, best gathering model, same-store the investing retention into from and the is attract. higher and place broadening our get I coming our last which bit they evolve to sort technology the think reflected may kind capabilities, assets in enhancing our in And that of front, years clients up the improving is us new a points needs they been of And basis and durable of where serve

if making are a you the the gives the that different you think they that. contribution horse around I water feel, to that will, have we and So in

the good the on of across click in we think -- store And with Board traditional has recruiting. traditional the significant markets on the a most the institutions think new your markets, getting last based down contribution XX independent I sales over months marketplace. if that the So or results the coming of most growing come recruiting from so I are question, our of our about and

three ramping you markets come see got is is that are now in, that the the beginning have there we new first or SWS and models one pipeline from that sound. to some contribution We the are

a More just that that a the Linsco to will begin model, the think you branded people model. and contribution SWS our that we pipeline Then importantly, and is It’s model, as employee-based positive our to really Services Strategic are in marketplace. see XXXX we model have moving or Wealth getting new also of I it from have bigger through reception. you

has RIA RIAs. contribution that or to the then so, solution And on an think, of we finally, model of and capabilities, in the we I segment up the appealing the to that are bullish future and are that we differentiated we for are the quite support some interesting the think again, marketplace, RIA pipeline. come some that building growth from is I We custodian point. only, from an come can that this of none think

it, and up create in it’s in think that’s time differentiated some going in a that to of to pick going see expect we are investing really that We model in and evolving a churn marketplace we compelling at the where solution the that such interesting, part marketplace.

So bit differently go point might up contribution about helps. think hope that of we but that’s this I how with then the models, how little think forward. them we as those you to about a

That’s helpful. one It is. Thank Maybe Matt. you. for

in priorities. terms where of thinking ended about you sort Just capital your of commentary

think you look as bend back that given stepping growth? back maybe down organic turbo that’s opportunity down How growth as to work-from-home Just with core year? not that charge just of in underlying letting everything an has much been business to COVID you next and growth out about on expense been reinvesting the backdrop and remote and versus office going further expense

Yeah. Hey, Bill.

hit So I expenses think principal question. on I think the about will on quarter’s you next our priorities. think we share I about G&A really Core think from it year, think we back allocation as capital in call. the a spending, to next and plans But When I your standpoint, it’s

and invest we see of drive highest use best to the growth. think and organic I capital

to the next bring that G&A that and that will be think will the bring on that Core principle for our year. I we we will principle laying to be plans

Thank you.

Steven comes And line our next the Thank Wolfe you. Chubak from of Research. question with

open. now is line Your

my afternoon, for starting Matt. Good taking Good questions. off with Hi. a Maybe Dan. strategic just for question Dan. Thanks afternoon,

the strategy And more as your especially to you some of which Solutions, from marketed some multiples? of to the Business outside or continue strong advisors. proprietary and Some to that demand are LPL opportunity thinking given the are within Blaze, services channel. evolves out given especially trade including of market more much products those network, competitors are recently of for own solution being advisors AdvisoryWorld your and have advisor and acquisitions, of valuation seen those build there the maybe the you current white-label solutions some at just outside the your How about of you some space wealth services of higher

integrating is development Look, capabilities overall here marketplace into much strategy it’s And is our help part property in It’s construction enhance with workflow have component Blaze of M&A, bringing certainly portfolio accelerate those big good and and those to we market advisors. and really capabilities into associated solution certainly capability development, improve to of respect continue is continue our it, is that our it intent they then fully serve and we to offering and Dan. continue the share to the and that outside second in workflows with in to Good with in question. some our right, are in the associated for very ecosystem out our overall the said, of LPL innovate platform and and do opportunity a acquisition of use that to AdvisoryWorld, case, or to that’s and the trading a Hey. the here. Steven, that. and those to are the where evolve doing tool support what support cases that Yeah. That invest clients. capitalizing this on both to and this

way. understand in I the third-party us then serve learn significant doing ever the think marketplace begin platform, shift and of the to right it more positions to we which and and a by to continue marketplace that, outside if to to or us gives serve that want a LPL pivot to reserves how strategically chance

and it work from I to that us think the foundation do gives well.

now, here gives to So positioned the us allows of the be is chance and right strategic us it certainly though not element learn value a do that to that. priority to

organic momentum question, continued a to growth October? Bill’s as that that some follow-up Dan. remarks, you September. Matt, more on for clarifying on growth, one your those been in just just investments? on driving we investment. contemplate additional quarters Core a And into expense I we those growth largely QX can mean have has G&A what was know organic And recent earlier I us focused in saw for give momentum hoping of organic maybe color investments in some whether just can strong Thanks and

right, at we what That in being Yeah. month. has much end October, We pretty of seen the so far here continued. have Sure, momentum the look Steven. at

I keep So as consistent the the it fees in September. quarter. with advisory are describe mind paid the majority of and of month I’d in charged would first

the from at at in fees. just look October, the similar a bias a natural the September October M&A going that trends to from trending aside, you when to seen so organic level cash to on side, to And return at in to cash we sweep build continued growth continue. balance that the have September, modest is then amount that’s cash a have of So the have or down we pace. really see side change October Putting

I seeing results some think are we good there.

G&A Core track the that point, half on remain On outlook for our we side to your lower of range.

half $XXX it, lower to million. that million So $XXX call being, around

I completed think where being just that three land left. especially point we question, range to the with one quarters in of would and your

think how the and main the year. growth finish the variable we expense variable I with associated is organic

So we will are the to have quarters, do range, million more $XXX that the October, of probably we towards I’d given what have be how range. so three going out, as perspective meaning would it far first that have seen months But say, $XXX we end but we the in where well go, as upper two be to today. to see are million to so the we plays

my Thanks Matt. much for questions. great, so taking That’s

Thank you.

question with comes Alex Sachs. line of Goldman the next Our from Blostein

Your line is now open.

everybody. Hi, Great.

banking bit about channel. talk I a was more the So we could little hoping

the You two guys couple of months. in sizable announced last deals

more of perspective, of guys for So your financial framework for then join? a sort up Matt, think, through around bit maybe that you probably And these and to you that, to FAs makes year, that a those us gross next little assistance walk some a including profit that EBITDA Board? that that’s of talk pick on attractive changed of those earlier from place about alluded I an type going maybe amortization could advisors to what’s of ROA just you ROA of in kind of in transactions, transition some channel comments

Yes.

it’s Alex, So, Dan.

half of of up that and the Let Matt sort then B me that. of I part take with finish let will first

financial general with the marketplace. So, respect to look, institutions

and the third momentum solid over business a asset good all couple some and seen of of know, years, have today. outsourced last a that $X marketplace, it’s you We is trillion as roughly roughly

would $X So it’s what which service. outsourced. where results, those to coming last and outsourcing have that’s was are mainly year, there recruited are on share already again, already year that participants double from billion, solution we track that are we been mainly This or

think add value can traditionally if strategically, institutions. so, ourselves around this you that, larger concept we hasn’t these this marketplace part to the how case, of that outsourced, we financial I a challenged it’s of and might do in

of be I within a this find institutions profile an experience, we them, model. ways try I optimize to or position contribution value line business risk finally, the the so And think type would and a in think, if that complement them can place typically go could the that we and and a focused the we we in we marketplace second the have out for innovate we of deliver of that of is differentiated differentiated way, shifting that’s ensure done ultimately, offering for and And what they in is overall in to financial client which can extend themselves which know If characteristic important their how that is appealing overall interesting. on. financial proposition

to so are we not it’s to shift the where institutions. areas focused. such and dialogue if for some your Though have to the financial those these that’s try think a have and try hope that, used to will, so and the with had to are opportunity wins ways a that an a show this that to been everyone, model. couple differentiated you that’s of appealing. model that answers And focused we have that became we I solution unique with to think concept outsourced it’s got question. And evolve never in we out pretty extend the in had market with concept opportunity appealing, pretty that of come up channel. on that pretty there market, We this that, we try of that up innovative we It’s actively and I think have which sharing

When the side. side. financial bank of channel, on you institutions Yeah. at at on look Alex, the the those usually are assets the brokerage majority the traditional And,

So then are the of start the to our those and range look that XX-basis-point you are for ROA at at assets kind lower of and usually returns larger in and the their gross the end range. given size, XX-basis-point profit banks,

gross the that’s profit. think about to way So

On really an one our I way. them serve benefits primary is the transaction efficient cost the side, of of in can to the we scale think bring

underwrite rates a And assistance So the dynamics cost that always transition -- serve. banks. to the are there’s larger TA on banks we typically to those lower lower for really side, returns, those then given those for so

the you together, when economics ones, how think little margin are get these bit those on impact accretive we color financials that give to on their in for onboarding periods. all on future two on the we will I extent a specific then, the will and of us, and quarters, EBITDA in closer put the you things So as

with it case taxes. increased for that story you a kind as you Thanks. To sheet as your an And to a could we in sort what of in because advisor, practices financial I follow-up, or in follow-up, extent a Awesome. have some guess balance element of that your other allowing M&A that’s LPL, capital consolidation use backing think financial a in thoughts I financial just kind do with qualifies to acquisitions? driver potentially interesting do in advisors bring an around you to your to get law guys I industry obviously, change my just there’s tax is change acquiring the of be acquirer them the of am know, curious the broadly. of and gain that

Yeah.

making M&A corporate to be or the you come as that fundamental changes, the any is number and that consolidation environment, place activity the including which that look a potential and more or reasons, certainly is, questions we think question is which drives front there’s at for I a that logical the at they new level. before. one ask out up people faced we law there’s usually broad a more level, tax contemplate the are set new on of where advisor whether different or of needs Alex, not good scenarios change, And think do that have point, may

of have years one of those that obviously, that of think to we being these as said, and and make approach we going aligned disciplined a typically trending your both from make premise see trajectory I of in strategic landscape take on our standpoint, past and we would in both operationally. we acquisitions financial participant on a more standpoint, we they where the couple are sense would have from see sure And we -- be fronts. activity, strategic up activity. question you are a levels think a the the I the that are we But as

Great. Thanks very much.

Thank you.

Our on of Suisse. next question comes line Siegenthaler Credit with Craig

Your line is open.

I on doing Thanks. are and wanted follow-up all well. to Good hope everyone, evening, you NNAs.

have transactions So next seasonality, then was and year closing. taxes XQ impacted you two and NNA by accretive

So can you this comment off ability on to your accelerate level X% XXXX? into

you would And think Thanks run for anything, let be first fill Matt, question. helpful. that and me the take a Hey. Yeah. in you that at

as with certainly think headwind QX July, had payment and to see say, seasonality than where tax that hope. particular at look occurs certainly, I X% jumping the trends let’s that But you that you roughly rate. always in if a right the blended as But will the X% summer. and month July that in payments you the April is rate. just say was driven tax then think more off there’s let’s in little annualized that you year a will X% in next rather I jumping off So That by, a pop growth up point

that I of billion the and think outside institutions that that we look push number ourselves ourselves we drive the referred to. or financial higher comes from out $XX two forward large to challenge as or

that effectiveness us we in it invest our model to our continuing makes see activities sales the improve business appealing, more of development think activities. I own and

Our rate a new terms -- growth of to traditional to that markets recruiting. contribute in continue to higher

from you I have them. I think up little contribution them supplement we begin contribute as this our point, to new then. They markets, had said as because, very to

that next opportunity as So an in they as we ramp more year. robustly see

extend So new sales. as rate those especially ourselves to places continue both to the would the where are we challenge store growth

outcome. We levels XX% a sound continue a solid that’s now. standpoint we the and pretty level got service We experience to invest at retention have think in from model the and

and then experience, innovate, opportunity probably more a as help sales up I So we businesses grow of that’s new long-term way we tease opportunity think a and more see think called opportunity, that to that right where Solutions with with there’s we sales. continue run place and retention. in And which same-store continue do existing that their coming Growth forward to a is is that I to we same-store more think Solutions invest out I service to and to ways continue go that’s don’t phase good we are advisors Business about believe think there new in so inside especially a a offering though experimental now, to the in short as contribution explicit being

new next and store think hope ramp would I as you that term from where at So helps going it is store year, and come new you into about we sales longer that probably probably get least same-store.

probably Thank follow-up question just but year-over-year versus, have it a increase think, new assistance comprehensive. XX% I was wanted Matt, on I in X% your you, in Very one the for, I advisors? transition Dan. perspective net increase P&L

return and are year, larger several that the to what Craig. you I starting same, right? TA the is Sure, recruit that the really mean advisors, haven’t think changed. us on I and see returns years just It’s to not think I returns over based on larger underwritten approach and this starting assets the those come over and past the Yeah. but to hurdles

think any more advisors bring to from I is able us seeing you assets. more So related on dynamic to are there just being

for taking my questions. Great. Thanks

question with And from our comes Thank Stanley. Michael line next you. of the Morgan Cyprys

open. is line Your

Thanks for just evening. like question. Centrally looks back to the platform taking circle I of assets It Hey. assets. XX.X% client there. here Good and on wanted around Managed the that’s at stabilized

hope place about also product the initiatives the talk bit evolving of and about the could describe further is little that the participating set putting Managed more a accelerate of penetration. profile some on are of that advisors touch maybe are How just you could Centrally the platform? upon thinking when to I in the type you So and if you

Yeah.

those inside this and and I just the models if in there, or different of sub-questions or Centrally to for But me. the over some advisor’s look, that’s models as two significant it is platforms. really to a please miss way applies get, redirect good management construction PM and take way construction/management. a both based approach so them based emerging practices all rep in sustainable portfolio efficient of me optimize -- trend. really one let Managed your that we It’s And as believe approach So and way a

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Yeah.

a there. I a of across appeal couple It’s broad the thoughts actually think Board.

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you Thank Great. much. very

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is Your line now open.

a on for rolling because seems on of guide fixed all step decent at changed QX, question down yield has billion Yeah. the that balances floating Great. it for just off? the $X.X much ICA asked like and I A are question the

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resetting. it’s I history think in those zero, is if it near funds be it it’s Fed guide, where now today, typically would sits just settled contracts is when a where but

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where at today fixed. about XX% You are at just look we

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think I now, about there’s of just the right much liquidity billion not there’s the math, opportunity. But is in opportunity market, low moment in of lot you opportunity if are end five-year point curve the of So to the at the a the just some just so range trying run of $X on today. the thinking the I think,

Got it. Thank you.

Thank you.

KBW. comes with Voigt Our next from Kyle the question line of

open. now is line Your

of maybe part on your actually Most pitching new you are you. the just solutions about quarter-over-quarter, are which up just as the subscriptions you most some seeing could resonating if And Thank my talk proposition just answered. more Business then XXX one, bit maybe for been uptake? solutions when if a you the asked advisors of how channels? qualitatively, value can to of follow-ups, color the the couple and But questions Solutions, are of a have wondering just give as

Yeah. It’s Dan.

me that. try swing at Let to

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doing appeal do how thing more the continue other are point thinking extend about to the cost, price we to again we and lower the The is lower advisors.

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on Maybe Dan. follow-up Matt for Thanks, a capital return.

though comfortable I last buyback organic and you level prioritizing even of mean you this towards was I we two think exact quarters, in that buyback, I some you growth take restarting M&A? phrase that are you that capital stated don’t if mentioned that wondering paused, the just the that should or think quarter. caught are more to But

from I I I us the year, mean, well. in we shares pretty were think, as if XXXX buying beginning the bridge maybe where Yeah. consistently of and QX back in

I macro, I continue while pause well think really COVID. the monitor really in think, the from the And prepared heard remarks, driven we March by as to uncertainty that business has you strengthened. was the in macro

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Got it. Thank you.

you. Thank

comes O'Hara Our Gerry question next from of line the Jefferies. with

Your is now open. line

throughout trends side obviously historical just me might of and the look broker other Thanks. this. dynamics, of for one a Maybe guess something recruitment to broker has there, pandemic on on expect sort Great. in but recruitment if pickup been the competitive too are we I strong

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up. are As you churn months, XX look over rates the win our rates last nine down are months, but

a which that continued has some team environment So make complexities by the and still share through created the story of have of helped I ways transition. to find job and to creative the think advisors persevering done the of you great

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premise I think correct. is So your

Great. Dan. Thanks for taking question, my

Thank you.

Worthington with our Thank comes line JP the Ken last you. from And question of Morgan.

now Your line is open.

filling Good Hi. for in is Cuddy This afternoon. Ken. Will

Hi, Will.

prior at a it XX%, ahead, first this stabilize the more year you looking production still of my XQ, a year like production math the back XX.X% do from current If trending and doesn’t around stabilize year? years. down XQ, increase revenue elevated revenue four a to levels down to of XX% -- or look So expect level right, and the hi. levels elevated you of in has down while deck do little and first the of production, the slide it’s seasonality year. Production from half this in been trended Why has is implies retention been of seen the think in first of and in half rate the normal for lower half there’s continue

Yeah.

that So one. let take me

to XX% think XX% to and place reasonable we We we think come X% back to that final what for conversely that’s I in question. of and a X% retention. to to landing range attrition, to are is play point trying think so somewhere maybe your

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then And the Solutions how like growth as P&L? and further, revenue that that item fee? transaction it. on dynamics bit that about we of in how growth the better, Got is understand of the think line then thanks a us Dan. volumes. on and roughly much out the And going Thanks, trading could that how is Matt, you break prepared revenue revenue, on line your to little that how commentary for can of Business the subscriptions, transaction much To fee we see drive help are remarks

majority mean of the line fees. Yeah. I is that

So call it three-fourth two-thirds, the zone fees. is

a is much of so to transactions piece it, your So question. smaller answer first

in businesses advisors Business to well is a to for AUM, we profit you their long-term. practice. emphasize now feel perhaps the them and of far, growing the maybe manage around expect more here. a will right earlier, experimental operate that for million to -- phase rate gross side, up And them the from the if grow and balance learning On color think setting able just and are the bit that grow it’s I as Dan’s But we be little so we there. from have growth run importantly, Solutions obviously, I And to we are quite $XX solutions some on think, about sheets, good as and their they more about or efficient over still

I that, the going are across up to that we do P&L. think if you see show

really from success think as well. that’s I where long-term the can come

taking Got questions. you for it. Thank my

now today’s And back Dan remarks. session. call for question-and-answer this closing you. like would I to the any does Arnold Thank turn conclude to

a stay look just day everyone the join safe. taking Thanks. and to next for Have wanted we forward speaking great please us afternoon and quarter. to again time Yeah. I with you to thank this

Thank for concludes gentlemen, and today’s participating. call. Ladies this you conference

disconnect. now may You