LPL Financial (LPLA) 3 Aug 222022 Q2 Earnings call transcript

Good afternoon and thank you for joining the Second Quarter 2022 Earnings Conference Call for LPL Financial Holdings Inc.

Joining on 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 and press release and supplementary information on the Investor Relations section of the company's website, investor.lpl.com. Today's call includes forward-looking statements, including statements about LPL's financial future and operating results, outlook, business strategies and plans as well as other opportunities and potential risks that management foresees. timing management's and or that or unknown actual or reflect subject and may implied statements differ results known to statements. to risks the in forward-looking such current those beliefs estimates are cause materially forward-looking Such from events expressed of and uncertainties

and and the about press Exchange disclosures Forward-looking refers Statements the other the the earnings listeners risk under to company's For more with uncertainties, forth caption information the as Commission. the as well release factors such risks the filings in company disclosures set contained in recent and Securities

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

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

to volatility. with our was organic business equity by to respect plan. our lower starting organic markets. than business the of perform results. want In led continue their With most. of remain times performance. the Over quarter market recognize $X.X solid navigate second of make time, In our the of clients Amid trillion them results both business I the clients, for to offset quarter the their dedication these assets they I'll spirit, quarter, continued to they by as our more advisers uncertainty, strategic and we outlook. to despite performance, on volatility growth, financial to so continued quarter, need persistent of our it our past our to we in market focused the and well our With taking can second care same to provide value reinforce advisers care solid continued geopolitical that their care review uncertainty. progress they areas, when total helping especially At take growth advisers respect mission decreased on to

net CUNA annualized were XX% These XX to billion quarter rate included new represented XX% contributed quarterly billion a results months. which past the from for Second growth. $XX organic assets $XX growth and

recruited addressable This $XX billion driven up the $X our assets $XX over total assets, QX, was past from ongoing Looking year enhancements to expanded which results our billion to in they markets. were period from at $XX our were same the ago. These model brought included the a XX months CUNA. billion billion by recruited and

advisers time with as enhance grow adviser With and and our operations. of continued continue moderate their are catalyst uncertainty and their technology a quarter, market as modernization advice and experience their same-store some professional continue products. to to respect in focus service for at the often environments sales, led of clients reinforce marketplace. the in and serving the activity advisers to value clients to on that differentiating delivery the as new periods of serve the ongoing while our capabilities Looking retention, of the solutions to in volatility well And through we heightened

was approximately second over result, months. XX% a retention the the past As and asset XX quarter XX% in

acquisition, to EPS financial $X.XX intangibles from outcomes quarter to year prior of solid Our led second of ago. and XX% results business of increase a an

progress to turn the Let's on plan. we made now our strategic

life, entire to and their capabilities we the be vision means and great leader clients institutions providing us which vision across is the market operators bring of being long-term are empowering become to our advisor-centered reminder, to advice to their to the advisers and at best for a this great deliver businesses. As the To growth to be we're the experience, to market advisers and human-driven expertise, technology-enabled gives organic supporting the At their industry owners. clients. across business path this time, same experiences our help planning solutions adviser extraordinary personalized efforts advice leadership Doing and their sustainable and that solutions us through share. deliver advisers well to a in

four have to on which strategic plays Now our into strategy, turn. I'll work execute review in our we organized

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of be Our recruiting continued with to assets. and approximately $X QX markets traditional source a growth in billion in

a increase strategic broader over We market volatility, past existing quarters. decisions on expand clients during may focus switching the like Historically, adviser breadth movement advisers pipeline, our depth rates win and continued the pause slowdown couple initial of our often to of and of supporting and firms. elevated in the making stages notwithstanding in

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assets has compelling. a employee the to for value model proven as in saw proposition be recruited quarter high Second new our for advisers

CUNA we complement People's growth, United Group employee model we May we year. Private next will With onboard large financial our announced the recently organic track to are to the Client onboarded of year. we business and at a to and in Scattergood on early to institutions, later this Boenning As acquisition respect which our onboard

each to drive from transition learn innovation more these improves turn use our that to to helps findings the experience even and to in make offering LPL continue We appealing.

demand this to expect grows. look continue for we in As ahead, as winning market model our we

differentiate is the play efficiency on their in that and focused drive in advisers providing practices. capabilities our help marketplace strategic second Our

to of enhance ClientWorks, expansion we the our As continue digitized a that operating with part core platform focus, workflows. of

serve the enhancements more management and makes in enhanced which to facilitates planning and more and scalability for also preparation client for solution accounts. within more our example, for advisory easier and value-added we Meeting client to Separately, data efficient client second effectively more we integrating For withdrawals advisers to advisers Money clients. operate dialogue support help These Move gold the enhancements by increase into introduced reviews. it quarter, automated workflow solution which Manager deposits our their within more

Let's third on experience is play and creating strategic delights industry-leading turn, focused helps clients advisers which to service in adviser and and their next that our an retention. move drive recruiting

flexibility a chat past includes transformed giving into when years, model two support, client pyramid over thus and As how reminder, the service which service. they we our an access advisers have and voice, omnichannel for digital

to advisers. We continue model for drive to additional fine-tune and enhanced experience this an efficiency

of greater accuracy flexibility, continue to digital advisers. for in provide speed order next we capabilities As phase to our enrich our the and part our transformation, of expand processing and

efforts our scalability are of the client account to transactions we our for transformation advisers clearing the now efficiency process. and functions, are of transfer including these platform account and the progress of processes, collectively we Our seeing drive through expanding money currently we while robotics while And solid movement, remain increase and millions operational are in AI. as continue our which majority early By experience. processing these also of focused the of we the applications four critical on efforts, opening automation enhancing

comprehensive advisers moderating period slightly at macro is focused ended of sequential on In portfolio second clients. our and X,XXX the growth play advice the quarter, volatility. deliver developing strategic nearly with to businesses helps and the in fourth institutions that their services subscription from wake thriving Our a base

to to our on solutions As continue the insight, testing behalf with our can created for we new services Waddell them advisers. on the solve we platform. that identify services shorter-term engagement set proposition for work services. solve a for of to needs and as Reed need during transition for a existing Solutions existing former value process. in their utilized advisers a on is an And Admin CUNA opportunities & interim with expands new advisers some services, And catalyst advisers our we to of these how on of basis based for relates are they services to for we we example our innovation which help time One specific that onboarding further with

as and the for services year, of focused half have on in and several second remain enhancing And portfolio summary, continued drive quarter, the the for growth. pilot proposition expanding move we other growth Looking our phase. to value advisers we market we our advisers and and increasing In our we in invest and better at offerings leadership. driving the our while incubation the second pipeline in support services in clients forward, their

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

growing the earnings on Against market and our second growth. Dan I'm glad All shareholder speak delivered and delivering of serving call. our and on net we advisers, solid right. remain you, the today's another we assets focused new In quarter, with Thank quarter business volatile background, value. everyone to

In work preparing United. completed program addition, to onboard account. Reed, client Boenning acquire and enhance create the cash Waddell suite Substantially integration an onboarded to we the Scattergood, the and utilizing of signed free progressed agreement credits our to & CUNA are to People's

marketplace. differentiate look So win ahead, the by excited in the opportunities as help our to we continue and advisers we to be

annualized were let's markets. growth lower new to rate. growth offset X% assets or down brokerage quarter was and organic QX a than turn $X.X Total as billion more equity $XX advisory net Now, XX% were second continued our trillion, assets results. from business by Total

closely XX-month CUNA. at $XX QX from strongest $XX recruiting, in $XX history million our results more billion brought Looking These total to the were which assets billion. recruited included at our

The combination and and year highest was expense and client balances to of Now, our This higher let's to is organic cash ago $X.XX. interest prior QX costs to a growth, discipline from acquisition the rates, rising our XX% in turn up financials. led history. of intangibles EPS

Looking profit X% $XX reached new line million, gross growth, $XXX top high sequentially. of a million up at our or

production decline. were payout equity fees Looking from payout XX typical the seasonal QX points was primarily at fees in commission by In QX. our about seasonality. advisory The lower million due QX, down and QX advisory was rate net following of increase driven to components, from bonuses decrease and market XX%, the basis million, the $XX $XXX up

as we anticipate QX, typical to our XX%, increase CUNA. as ahead driven of well rate by in the roughly payout onboarding the will to build production the bonus Looking seasonal

quarter, driven revenues. asset-based million $X as period payment in was decreased to QX, a higher by This lower offset activity. down during was related assets $XXX the on Moving an million by sponsor $X sequentially equity. from revenue to partially average million Sponsor

higher $XX Turning driven short-term it revenue, up as million, from client was was This cash client well cash QX. interest average to higher $XXX as balance million rates. by

in increase $XX in capacity bank rate. QX Looking added of balances, up as billion, quarter cash $X at demand, are period, floating at saw leading rate to in deposit billion. portfolio, an improvements billion and the Within overall fixed ending we are we ICA $X balances in were they the client further $X which of our billion

up basis during more at it our fed QX, from by was driven Looking funds closely primarily points XXX XX QX, points basis the ICA rate increase yield, in the quarter. the in

increase. As to to are interest our we ICA we ahead historical Based expect to our QX, and XXX continue yield on yield our increase data, where look to expect points. QX to we today approximately ICA basis rates

want on, Before we I updated highlight moving client reporting balances. our to cash of that

our As we vehicle, these client cash as cash balances. of include we the reporting primary our to have prepare updated the suite for overflow introduction account

our market been in The historical historical reflecting these to the money purchased addition, In our release. is endnotes have information file. changes of data relocated balances available fund

service to from quarter. last QX we revenue $XXX about XXX and from X,XXX group, with up QX. is million, turn subscriptions let's which the nearly Now, our unchanged quarter services ended Within which fee was in

revenue, growth organic now while Our also roughly sales recruiting, contributing drive retention. services of same-store by to group and annual $XX generates helping million

IRA. fee increase Adviser Looking driven ahead expect National and $XX service we million revenue and by revenues to by roughly from QX, our sequentially, to Conference

Moving QX to $X it million, million transaction, was sequentially $XX decreased down on trading volume. due to

have revenue a look As transaction of from QX, in to $XX rate basis decline in volumes we QX. around result declined which run July seasonally ahead million in would on a

was It $XXX to Now in with QX. expenses, let's million starting G&A. turn core

stay growth. disciplined invest while to drive plan to to we on ahead, Looking continuing expenses

interest in increase the date, hike rate including significant we capital. are poised Given to last rates to the generate week, additional

with Our is the which framework organic and first support to and growth. capital drive foremost, for aligned remains generate we allocating returns investments this

increases rate anticipate the in $XX plan our and investments are core we to This some we range outlook $X.XXX billion. that deeper a of million accelerate core Now additional of G&A these up to of G&A to into billion $X.XXX to XXXX XXXX. cycle,

conference sequentially, by Moving expenses. lower on down expense, it $XX driven to QX was million, $X promotional million primarily

to week increase in-person approximately promotional years. to an we time million, ahead expense our $XXX largest last Looking conference primarily the we the first conference format adviser year which returned expect by for as of QX, spend three to will driven in hosted

we of billion Now, let's on We multiple EBITDA move total, quarter, platform. In approximately client an of the purchase Waddell the over generated annualized run end $XX million was joined the $XX to $XXX rate $XX to our At million assets X.Xx. estimated or basis. and roughly onboarded Reed. our bringing benefit as in EBITDA million, XX% of QX

have we completed going As no will now integration, longer substantially break we their stand-alone the out forward, results.

QX, and it up Turning amortization, in to $X million $XX depreciation sequentially. was million

QX, Looking to amortization to sequentially. we expect to million and increase ahead up $X depreciation by

as it LIBOR As in rates was higher cost increased for expense, interest million our million $X up debt. sequentially, the of $XX floating QX,

increase to $XX in the increase to expense primarily interest by expect we QX, to driven approximately LIBOR. million, ahead Looking

capital to on Moving management.

with balance in ratio remained Our QX, of and leverage $XXX strong million. at a cash X.Xx sheet corporate

deployment, returns repurchases, first our share focused foremost, M&A allocated allocating on the in QX, back investing shareholders. organic appropriate In to capital of capital buying we million growth framework and with $XX capital where returning pursuing shares. capital we for excess to and both organic get, remains aligned As growth and

QX, to million. increase cash of our $XX we business ahead level of look repurchases approximately to strong generation, to quarter results. closing, plan another we delivered improved given As financial and In we share

questions. With to opportunities our look our the we shareholder open we As serve excited forward, investing that, we grow operator, call and about for to create remain long-term the please see value. business advisers, continue

question [Operator first Alex Instructions] comes our Blostein Sachs. from from Goldman And

your has cycle. going believe play So that curious catch-up? XXX that, experienced, or in just cash running you just to beyond you rate appetite one lower you start hikes that, to a just maybe been the more the too on dynamics. bit of we’re guess comment guess, little we’ll the love guys a the fast fixed there’s some than why Matt, think and as basis follow-up I of duration sweep that a for done have saw slides last with of on deposit you reason do in the betas pace of little would Is to maybe thoughts referenced off what subsequent is. to that’s quarter? just likely as Or additional a And sustainable? a In bit the guys get points a hikes I on it we

Sure, Alex.

-- the the the slide, the point is operative primary maybe that that think slide point betas on on I the in prior cycle.

not given the I much system, think how surprise a that a I cash we emphasize far it's is are a but bit. just better just bit so would me the little little been betas to in have

a which and the center right? not is So of the our think second your here product probably of fixed I the time remain which side. demand quite gravity do heard for and on same rate driver coming think XX% I ability On to the the is our time that it's the rate-sensitive last on fixed, range I portfolio some objective of pricing to really XX% primary where zone in think to highlights is the product. a think that on really just you've goals of back. I question And get in into

on about at if had, growth we quite rates that at ended us more about build when on it's that fixed about came side, to the the $X fixed billion the in quite where well market, really in in -- portfolio. the And balances side. pandemic began. in able put the that that we back quarter added what with rate rate on the think of the XX% being we're the So some think that we quarter, up because starting since the $X demand right? rate I But the though variable most probably of you we came even some you look to there of add billion of was was variable time, demand side, So the $X billion place the

probably the healthy, be side the sheet more out side it's balances taking I their are growing. fixed rate it's I fixed that, or of system as spending where And encouraging importantly, is to think, shrinking think, it's fed additional balance to conducive on And loan look the things in the there. rates raise some lead whether management. ahead, the cash the think is to demand and So and demand consumer are to really going all general we would I remains consumer ultimately Those see. ultimately, to sweep that environment, about then continuing rate overall to

again, organic in for in net perhaps growth around with not Great. seen growth. assets. across we’ve and more question just organic moderation And terms just industry Obviously maybe second my the new surprisingly, volatility, of

you you just were we’ve slightly as sales that same-store run get lower the of As a love unpack recruiting that larger bit forward guys, transactions about from growth Just that and much rate slower on retention sort the ex more the to of think a color from coming is dynamics? organic to versus a little seen whole. we lower opportunity as think on versus that some firm would the for rate how

to of closely, large activity at with quarters one, prior relative And that activities. new new will take opportunity quarter traditional as to more right, we across we be types institution, markets, new if pivot as some our more looking as us again, And believe sales I look that we if options believe you that then talked explore forward, think to you at do more bit to solid saw in conditions will, an models a there store are you and look and begin a more and we Alex. with to saw just alternatives. about. slowing macro backdrop ex I'll more that the good if for store look, get demand, environment the the estimated think, robust as look these you through usually I And advisers

think out, sales I that that is our seen the X% lower up where end the you’ve which about have just environment. of pointed with two range so, target And we that’s remained retention years, levels feel past news The of and kind sluggish for good a range. is in to we more in little backed the year as at

see haven’t same-store variability so where you I period. of most then, headwind. sales through much seen the the is And there And

serve this up those not see ends where beginning get opportunity differentiate clients by in And course, required. Of think April and to I they quite being saw period then that more served market And a the of down a as it we headwind dialogue to tax to normal period June, with in some conference are the And that this see same-store saw last At market other you’re advisers. on demonstrate up April. beginning stimulus advisers you be with hear a you slightly returned in equity as real headwind. and growth payments quarter, April. may to the more have I think, And they sales We sluggishness value work well the back being new structural and think a the through of I logical a to as they’re advisers, dynamic place, opportunities who saw then frankly, to in this volatility. much a opportunity and May when moved volatile our quarter. to that’s week, of

think on I we the second in that headwind structurally quarter, speaking, that’s forward the we the do still go sales. So as But good biggest a opportunity short. same-store see headwind in

helps. that hope I there. pause me Let

Wolfe our Chubak from [Operator from question Steven Instructions] And next comes Research.

revenue to wanted sends on could of guys hire. and I growing a sense certainly revenue opportunity wanted you been you have that around just you a historically to long-term And that of advisers speak are just since strong many users your Bill a product. your lending could that banking was help of new It that you decision hiring opportunity. unpack announcement made the But if the your lending I here, strong in solutions. signal us sizable just a frame the hoping off, First to guys some get one It pursued. recent is especially peers haven’t Sappington. It’s focused

I their Yes. overall solve call and to This is trying we're more provide Dan. opportunities. I think, to value hear the two that we standpoint, for Look, might from One, a broaden spectrum. appetite approach with our advice strategic of advisers holistic clients to to, their a what

part appealing create you And that would you to if about certainly -- experience integrate that so think cash products of by clients. solutions create from to as is it's we that and that, bringing management client logical capabilities, a strategic And solutions the solving standpoint. and lending value those then, add to and those around the in economics and

that's So really for. solving what we're

and do go go and we're say, think was what the the the and the let's if "Hey, right, do I we that. did experience leadership to out going get this marketplace to insight to

experimenting and leadership concept; for and the it so been that that solutions advisers. just We tight where client there's to deliver questions that do a possibilities bring operationalize ask smart help have We integrations thus to about short third-party probably what overall have opportunities those into time partnerships end via period experience learning were compelling we're execute go then and interesting that and that's and client of us the on to think good our in better to through enough identify doing.

that helps. hope strategy. That's I So our

to And Matt. Great. wanted commentary just for unpacking made things some rate of maybe clarify. Two my just I the follow-up, earlier, that you

you could client a secondarily, in floating if on just curve cuts any ICA I’m of are fees seen patch. amount the some enter there quarter. the termed another concern more market? And I easing trying fixed be in you if you some allocations? of gone any, had rate still forward rate much in July risk have you First, has significant to your if gave in cash urgency cash, noted we for is lot And downside helpful of into sense there terms do year. back change that out How color in of cash next with gauge behavior around of that acute contracts. that because that running sweep is the pricing the a

second Steve. I'll one first, take the Yes.

think availability encouraging, I we're Alex, I'd from most interested think the rate doing in think $X said, marketplace the to since emphasize I below for right? we're our I the that our what if in perspective, range, is So target rate, I on side fixed fixed there's really the what's a And pandemic. having billion right, quarter do as that. we've to amount ability add been the this is in quarter just able

So is I rates here. our I of think with But we'd market. the that the increase it's encouraging. to perspective, question whether available think, your It's about premise in from all line like it's fixed in just

to Now July. first your in so with question, respect balances

at look the you month when in month fees of the advisory is the would -- or month the of you you think remind typically one primarily quarter. are that quarter, first just the I'd or see charged I what biggest

have the continued we would offset in by So was volatility, think But growth cash. of the least well as organic I half that typically that that as at first July. reduce the

So of flat. those And kind or add things saw ICA off. that I'd improved, demand the side. meaning I'd July the balances cash netted capacity relatively on But were further say two we mix

growth, dynamics of that advisory as just while didn't the quarter like to when that the though $X factor maybe up to think bit expect is July which that went it's went to those month actually you CUNA. prior fees you as I we even those direct the in same of of additional a M&A the And it, the would which has X% well organic CUNA balances in it, on ask in just the that macro. on money down. about you first And ICA little complete something call zone. of onboarding color go overflow is market have So the choppy looking billion any which environment side And give front things update, July, in

helps to you give hope a So I little that [indiscernible].

our Cyprys comes from And Michael question next Morgan from Stanley.

Great.

a expenses. Just on had question

but expense I sort G&A there. year. probably saw for guidance for also know for year around guidance moving core about As the ‘XX, growth to implies growth think we I think any here XX% this you this the XX.X% get into increase But to that ‘XX, pieces growth of I

So surprised growth I guess, level that, would growth XX% you of this year. for that persisted be

there out. as us some terms in of the wins imagine same impact rate you models the have in of would time, of sort in out acquisitions you falling be level of be growth moving any pieces of initiatives the into to expenses large of run ‘XX? going and that And ‘XX at just terms and guess, some our the expenses we kind on, that as the pieces mandate at year in this from a as just with helping coming of help persisted I as just So that rate about well to here think full the some surprised moving I build around run on ‘XX? year are are But impact synergies the we some that will

help just there would So any be appreciated.

probably about going in And where up driver our three Yes, really economics focused look the I on start into bottom year, across that on where quarters, first to of above to Scattergood typically so of that, investments primary technology, the signed. we advisers. our our positioned points and few that, here how supporting we rates that allocation areas, are with of support identified now about framework on plan that, that well to to the drive the we in returning And front. remarks, and we we recall the in the and really organic -- capital you asking buyback I that interest at mean specifically, and $XX in those and see sitting beyond what allocate really increase our Boenning increase for course, And this all accelerate to expense cycle. capital We I do I we spend, sure, when course. we interest basis prepared the that to really recently having And that talked decisions. I points, got $XX million, up line key $XX we focus, really our foremost, good that improve example that think first the including from the that basis past and of I think just quarter. where then, this XXX M&A. thing, we've looking in the to rate highlighted million of areas XXX you're think feel And opportunities serving growth. capabilities, of upon. to we and The well the I'll think in are a And to perspective increase And investments fall on of like to which shareholders. allocate benefits capital or and as once is drive really is that million

Now to really question year our capital. flexible is what time. on framework just allocate where to I'd can when your make we'll year. next Really do end think remain which our about that drive really emphasize, right? we'll really at I the is making share we that capital and sure to allocation year, when and thinking closer we next we how focused continue this typically to do get on But of apply we decisions

with an then. give to quarter, standpoint we update So our repurchase close next planned million from the just I completing a highlight current And getting share would $XX you we'll are authorization. for

an naturally as after update also refresh will new we do one work and that give to something with you well. a we'll that's So that

more How on we about Okay. quarter you management M&A, the then transaction that $XX front, the next sort And expect into saw the quarter. of you and of for pace just mentioned million And fourth beyond? the the on sustained in the capital be buybacks clearly, are broadly you thinking to announced that? maybe quarter, should just

model. I employee think an it was

guess be where I spending So M&A to platform you you And of else point? the properties at how on might much additive this sort out that? there? are are And seeing time guys what

the on entry on strategy, the you would new in had can from done our types traditional think about I whether side mean it's different the front, into I of technology our to anything markets we've M&A Yes. capabilities that build. when to M&A at otherwise advancing look helping advance have accelerate market that we -- all our that the

our -- goes acquisition of not. it back a that And price a if advance can it it bring on strategy think to to to that of I course, makes be goes operation, in sense. it’s we’re it’s if and financial whether position able all So, growth to it. or And

to So prior the about perspective same. framework really opportunities allocate On that really to that answering said a what at I is the for capital. think I’d we’ve share go back our is are really just question, the repurchases, while what and I it’s had

where returning through we’ll with and expect think M&A repurchases. the rates to and more shareholders on be allocate organic capital see capital interest we and do opportunities to have focused I to are, growth on then we share

share So like like would make it look there. have looks the opportunities repurchases but see just at what sense, time. we We’ll just depending if on the allocate capital what to

And our from from Brennan next question UBS. comes Hawken

and Steven start I’d questions. follow-up with Alex’s like a to to

that they’re side contracts, funds. But volume to is quarter. ICA you still this saw the think fund do rate? premium on Matt, fed being was well, on back rate to rate that we and floating the going to fed that the get typically as demand indicated that, translate done at that So price you floating to improving certainly you demand when historical flat the thinking into

XX contracts quarter. basis remember, mean, So were funds funds demand we of with of funds We even And the think I that couple plus back or the the been plus a minus I when we'll it in Fed are I -- I positive at get so. Fed peaked, pretty think a through and would are Fed big moving quick emphasize the -- And just plus some funds contracts a I was where points X% in funds now that peak, of starting Brennan. I in from think right? were Fed range -- amount the just the Fed It's now think was the volume, big, right? to XX. maybe improvement. to Sure, that variable

will So drive the say to be. trend factors look marketplace I if the continues. it's hard to when know just at you that just demand that and continue would

to continued from [ph] XX%, increase. balance X-ish XX% up that spreads go surprise we And from if whether saw we not So it would standpoint just me that the that the zone to a demand funds at to to in the overall saw a amount. XXX with [ph], the mind that relatively but of at about piece is keep peak, XXX know Fed spread the we're that's harder small talking

Sure, sure. that are And didn’t you I realize improvements seeing some small price. in

and certainly encouraging makes it that’s sense. So

to that a payment nature? be Should might I why fees, related other On recurring? in onetime we flagged believe consider the period Or reason that activity. prior to Matt, is there $X you an be million asset-based

recurring. prior so Its not Yes. related, period

from next Securities. JMP our Devin comes Ryan question from And

And just what on bit how I question, just both First touched dig motion of can But a you're there's some or in on today. seeking in M&A that to little been that's just recruiting. And after any people going there properties. little to M&A a more terms kind flavor in if advisers or seeing you are Matt, people this get affiliation around current and the pool gravitating are you're the the out we whether want strategy, model LPL proactively in bit, either of if then more evolving if environment? whether aggressively backdrop, targets kind in just of of

market. two seeing I having are much in So know a are hearing some all. you some as of kind aren't at sides of the we're success lot people

a love just So get to for little that. flavor

don't it of take Devin, If questions I at back. in that Yes, and me get there. a couple please let stab circle just all, a

of will, time. movement, us grow about to and all And probably than overall quarter opportunity in that the period saw think the rate to the that for good or in models we we have, We solutions we've that sure share that's for gone the of we reflective marketplace. across year, with create with you've is making different And expand I advisers certainly, the think appealing And as model participation talked awareness of if So you of solutions affiliation different I models. set, our very different proactive just the the been the think terms and problems expansion I historical sure we've to capabilities norms second in the this continued segments. we well vertical that for. affiliation our during to respect aware are past movement investment our marketplace ongoing solve multiple more we and that less people can making slower integration on make heard models, that of all them are there's the horizontal more want sort again in our of in help and

go of that want within data the the on. structure has going a base people think, And and way. done team to that aware a and sure set to tell in crisp a in using so job, way good I story capability the that insights to way a we market are of make that's and change innovation smart of to and And really consistent the creating

And at so, intentional on be and we're intentional we improve about new how better very advisers to about and good can very at trying constantly working attracting get that.

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that [ph], with. Audette professional marketing think the I services started CFO, as

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And comes question from next our O'Hara from Jefferies. Gerald

for some or context business maybe what and Can to just like the solutions contracts Maybe color kind little as us kind look a are? anything Or just the around the opportunity terms or sticking a insight renewal longer-term there? the of give long to kind of of how of those with you us bit stickiness subscriptions moment. give the of

Yes.

plan our marketing So assurance have are there's So a CFO as strategy, professional solution. and offered, have that adding some services variety of M&A different a the paraplanning and that before, business plan, right? more then you even I solutions business remote the solutions now you office, services that that solutions, resilience created mentioned like we've are

use And they may so how they're values and than adviser create different an slightly different slightly they're them. that in the

as things but on commitment high have a LPL. to think from their to transition that speaking, over if of to & contracts services value learning had speaking, the used and service, that want make when types make as the a was services, that And it's take you one to people they not. and different I retention as admin for marketplace year our think you to really to help a nature. that marketplace, those or in you got "Hey, used present year then moved gave Reed that have frame, me But though generally about they're that's rates into them done you sure understand that think contract the Waddell services. to professional I whether it of advisers start those enough it these informed we so intent distinctively over added my I time, some longer-term value created We're say, And not whether saw them on not enough We to just understood also way I a or a they different acclimated have it than that remarks. said us typically sure shorter time i.e., hadn't to for to the

find that just was then contract on one different vision would long-term term and solution. ultimately a their So

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sort the to I comments ended those go it. follow-up, a kind sort along, think of need maybe saying how respect and you along sell that of coming time out last about year, gave around early this of kind with pipeline the as -- then also encouraging And and I was days, to by I you you of guess, relaunch helpful. color that's some strategy think RIA Okay, lines. But

So little be to a bit an coming able hoping of to you give might as us along. how that's update

And looking will, posture we those to for of ago, the marketplace partner continue that -- strategic like as Yes, opportunities And to our only. us integrated a go kind you vertically leverage if the we that for are I relaunched, we RIA in to to good think to a went folks question. year or RIAs offensive a was relative more marketplace, offering.

-- is add I recruiting past compelling that and up you’re not months. there’s we we more more we we differentiated really to capabilities think custodian the the show that go had partner and pricing a and about establish in ourselves That can strategic do and continue XX and more We and just the and that competitive said, seeing can be market opportunity as how to believe we’ve that more a partner and a intentional over value-added to RIAs.

you’ll play And more in so we coming quarters. that there hear have more the about to

And Voigt our KBW. next question comes Kyle from from

capital management. on question follow-up a Maybe

And how your with X.Xx guess, this this your at would target LTM Your business. in I leverage quickly which when range. the calculated be that relatively I as to targeted a ratio how guess very significantly using kind end still that below leverage trend willing roughly rate current is range, you can rapidly consider growing the you your without significantly down below of the year? sensitivity guess, leverage bottom view your any look debt ratio and we of it’s investing move let towards to optimal do ratio you’ve is ratio in I see X.Xx out period EBITDA? disclosed, you easy is

Yes, Kyle.

think range. I starting the we're just with

that are see to And think the to But supportive organic really, growth think, in opportunities deploy and advisers to really sheet positioning us M&A, a that right including to we are is are point based now, think of of of higher think supporting as investments cycle to driven as with get in a does us. balance being addition handful recruiting operate in flexibility important. on lower amount or feel in. I And that, is well. I that the larger It's we interest economics key that to the we where I of have we it even the we those capital the range get by EBITDA And is X% your and of interest our things. strength of by I think think the the comfortable the the as percentage higher deeper on range important rates I X.XX%, and and like that's I it. think question, end positioned into -- right rate

I of I that's but and short below significantly end that to period your by dropping I maybe for we low small of question a end if amount wouldn't the think maybe say range time, think up okay. a

not but focus we capital. of that gravity I think really and about we being center and where thoughtful that only our is allocate allocate when capital deliberate

think value drive to good we that we're think capital I our that's and want I So feel we Overall, to positioned perspective. allocate today.

Understood. duration incremental that’s size. short of a -- and recent on we’ve question money sorting more And treasury a that’s I obviously or the client given around the that for idea income but signs demand yield-seeking a any [indiscernible] potential week whether And and acknowledging client on as behavior commentary cash. behavior the small fixed very most July just gotten just instruments? follow-up on you seeing cash, appreciate adviser Are of

Just seen notable? there’s that’s been behavior wondering in change if been you’ve any

Yes.

quarters some at business have maybe I up the think changed? of the percent in the largely question, to on zone. and the rate-seeking your down reminders up is play But we anything the breaking as think cash got market factor of out. usually when tend sweep the just cash in move right couple I of I seeing when And think our primary that it's of and X% to think has you AUM to where I as sensitivity I at think I especially quarter, Kyle, really that And this there. the just tends sentiment the and look a look I industry that why you operational. our last a cash lowest And we that's couple think no. that of in of is have behavior. answer it's is you're And opposed

given both as at you to have QX the and AUM, actually quarter, up percent a quarter. X.X% up interest rates meaningfully dollars in in looking balances as the during Just cash grew gone the volatility just our that of saw

behavior be validates think think I that not of tends QX, back couple is last you’re cash cash and on the the cash empirical operational So, that looking the that the really we have. data I rate-seeking the to even really quarters, -- at seeing

And our from Siegenthaler America. comes Craig next from question Bank of

backdrop I channel little RIA is with wanted is two come which a how was the back how and both the in the this you macro just year on update to custodians provide than the a some pure Can also channel evolving to I relaunched of interested biggest us you competitive changes also And RIA merger ago. landscape year-to-date? more to of doing? the an

Yes.

models over quarters, the a affiliation RIA is solution to assets. billion certainly, business, look, respect with our significant recruited each quarters, contributor the in those last RIA think seen in a the two $X And I of collectively, little So that. you've we've to

with today. good we're marketplace seeing again, the our So in offering traction

I a you, strategic though, partner integrated the custodian. As vertically be to than shared we just a opportunity more significant with see

intentional to our we're even be one offering. pricing that branding of that that's in about terms how potentially trying both so of And and offering, think about of the we our things our

chance large favors or with disruption consolidation change I size to to win more there. that share the that usually, custodians, opportunity, do they're creates the marketplace. play can the you of well about to there's forward. hear more that And out capitalize go prepare there's if the But there we market some potential two that continue of and given so And as prepared, on think see you'll where do change, opportunity. we to in

the I a see amongst forward. number as as share that we go to of possibilities so we And think and certainly win opportunities one

intentional little see give color and helps So, opportunity the we're we be bit that a how I more hope capitalizing. about you trying and context on to

my bank channel. on And follow-up I to the do wanted

now? the year more macro next this with year streak big two banks is right United People’s a it What’s wins? year the little just focusing two channel keep you in to backdrop win also, with alive CUNA for shortly. to wins making per additional So both year? the coming And wins potential find tougher bank internally last the and next Can of

good Yes, question.

a our clients. continues to of spectrum forward, we as pipeline larger look, so go financial build institutional And across

So more you create typical some more I have to think of value your it's dialogue and you that proposition momentum opportunity. where continue to and tends that and success, iterate all

of So a whole biggest we And certainly up. that picking is the the transition in onboarding change see one process. demand hurdles just

We that's change. the to you continue now if onboarding making say apply that of I'd one barriers, and of transition process, that to insights and we new opportunity transition of And like make innovations, to our learn as a those saw differentiated the big and the and a capability. things reduce will, one

of confident evolution record steady growth and this wins, making is think -- of we this the a so, our the increasingly of feel smooth the transitions And channel. ongoing track in that of us in the durability model,

answers maybe question. first that your So

Your have to banks willingness second interest and this dialogue. around their question the their and

to constructive a Now operational I opportunity of opportunities volatility. economics needs reasons those again, market discussion. in explore potential see There’s a dialogue well. in those we spectrum we continuing notwithstanding to and across evolve a efficiency, a And add significant have lot the programs, to needs of possibilities think risk the have value of sort management, to growth needs a their

of So macro hasn’t really the this. trajectory altered

call remarks. I Dan am Arnold closing the to turn like I now for further back no would questions. And over to showing

again us to thank everyone look we quarter. Have to you afternoon like forward I’d the day. taking just to a speaking great for and time with next this join

Thank you.

now may You disconnect.