LPL Financial (LPLA) 28 Oct 222022 Q3 Earnings call transcript

Good afternoon and thank you for joining the Third Quarter 2022 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 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 Amy. joining everyone thanks And Thank

despite underscores continued continued market the to persistent respect well market organic than Over business. them advisors source strategic by quarter on With their by This business they third the both of take offset trillion perform results assets work areas, clients importance which for navigate was drove quarter, the quarter to a continued clients total support clients. with as taking helping plan. our I'll uncertainty. more performance, our decreased marked business our review well solid progress financial continued their the lower our $X.X out, solid commitment be volatility. third respect organic past was and their these third starting as can With quarter, of to care In advisors as our growth to to guidance resilient growth, equity. to of amid volatility, our care of mission, our so of on

billion, billion, the assets revenue. representing Third XX months were quarter just $XXX over assets $XX of past to net representing new annualized new X% X% net contributed organic

past to billion total assets, billion. to months markets. the results XX and addressable These QX, Looking at our expanded enhancements over bringing $XX by they our were $XX on-going recruited model our driven in the recruited assets were

our Looking backdrop on a at clients focused market their serving differentiated volatility, same-store sales, delivering remained and experience. of advisors continued the against

capabilities As continue winning expanding well a through in are result, share as advisors of combination drove the with respect as clients the improvement this both new and to in of and existing advisor the our combination the technology, wallet service With enhance experience new retention, continued and third which on-going we sales modernization to same-store quarter. with operations. market, delivery our

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

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

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

businesses. As the advisor clients advice the for across a empowering which advisors at institutions great our reminder, long-term great us, and entire leader operators to of being be center vision best means has their deliver to their and the to become market,

advisory personalized path life, time share. the extraordinary advisors and driven technology are Doing gives to human and experience their sustainable planning solutions to and through the clients, expertise, growth, advisors we're vision supporting in well providing this leadership market us organic capabilities that help same industry our bringing we efforts, a at advice this business For the deliver the owners. enabled across solutions their to experiences and

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

of while continued in their QX, also expand model. in growth recruiting billion traditional first markets the a models, with our markets, our businesses, by affiliation play they Our new involves adjustable in strategic source advisors meeting in approximately traditional are leveraging institutions which A of in assets. where winning and $X to evolution be

advisor rates the We of win increase depth and levels. and despite pipeline, our to breadth our industry the in remaining movement expand continue at lower

over Following to from a and conditions recruiting several the alternatives three exploring solid practice. over $X models, more are well market onboarded the models. and our strategic their enhanced assets respect two employees to give should wealth, clients, in new This CUNA With new institutions, offering, to way we large model. strategic for structural affiliation creates to strength respect new our People's advisors positioned past as finish With drive in growth quarters the quarter United. the the driven for financial volatility, across increasingly are believe team. billion favorable to we elevated all two RIA us we a and in acclimating This of recruited scenario headwinds per a to and market result continued year quarters,

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

to for we as look model As continue our our ahead, see grows. build we demand pipeline

and the Our providing It's helping differentiate play in for is advisors a create their our on focused A strategic experience in advisors second of efficiency personalized the that for marketplace focus digital drive our practice. help practices. clients. is their capabilities particular area

how to extended they brand, clients. we content the present advisors As their the an their our example, of utilize flexibility and and this they the optionality features and quarter have

play, making higher always for arm In advisors build that products content to which annuities terms and for end, matter capabilities and expertise. further our investments, also their also to the meet enhancements To their research we're both addition, provide we of of which contributes end, enrich drive markets. advisors in advisor needs. products, to move strategic tools, recruiting on appeal an third next are they working available and to focused delights advisors leading creating our clients, more breadth and efficient Well, increased of We've helps turn, broaden our advisors expanded and in it value deposits. client's clients clients to provide to which To our products our focus expanding this their experience certain easier out offering to on help that services These and these the solutions the industry on service in retention. proposition and market. in continue the opportunities and prospective to demand that subject in is and looking navigate existing we're and platform, with let's like alternative

that. care and the As our operational about we to couple end-to-end on primary a over this And processing into past think interface, our behind journey journey takes that model. an lenses, through service been reimagining the years, a reminder, of transform client service we've two model transforming place

experience, voice, for first digital offering thus they across chat, and access how Aspiration them flexibility support, greater is multichannel provide advisors when a service.

advisors first continue three to of an report, create While tune to already our option on fine an need. we expand and more easier these these capabilities, shared focused and increasingly see the digitally advisors phone many access they opportunity we're currently efficient as And as prefer their information more for the over we it we to making our each more a simpler they resolve call. can to experience digital And engage have requests. channels,

early experience. these our platform, the a we the of impact in also still client believe have we're while enhancing will scalability enhancements While innings, meaningful

And by these thriving Four generating of advisors four XXXX and and more value run offer and a ago, players of $XX client. helps advisors. the revenue a challenges spend service expansion, of Our rate proposition advice today. level with innovation roughly run advisors our the services strategic Through continues comprehensive subscription and portfolio portfolio on our started focused ongoing demand, comprehensive base we the the business period to strategic continued and to seasoning that face, deliver businesses with resonate million. We're to increase, the result so efforts group institutions developing of their a as time goal they this translated growing services into with practice ending years encouraged clients. our can solving have at group services of we

we with As launch solutions, on based for example services. the needs streamline we their with advisors behalf. continue on help financial identify reports. latest decisions accurate existing and the created solution work insights One solve service is our And business new on of CFO timely services, from new and further a to we advisors to bookkeeping

time or tracking in can and also profits closing. advisors result, more business growing a As managing their spend

and services forward, drive we to proposition portfolio, move we Looking In at remainder better the we several on of support have summary, while market we others year, for focused the the clients advisors and driving pilot value growth. in their as and in and pipeline leadership. our in increasing growth for our remain our quarter, to advisors expanding innovation And invest phase. enhancing incubation third the our the in and continue

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

with to business delivering right. All call. another focused solid growing and quarter our Thank speak advisors, shareholder growth. In the our everyone new serving of remain net glad third This quarter, assets Dan value. on earnings we led and to on you, and focus I'm today's

program launch today. as account enhanced you people and In we addition, noted onboarding the with our sweep the deposit of cash client

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

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

Our total our $XX to billion. billion, QX XX-month were assets recruited bringing $XX

expenses our and was highest financial and interest intangibles rates, from and a balances ago, the of prior year XX% QX is led As our costs higher of rising growth, ICA history. in to EPS $X.XX. combination for This to organic up acquisition results, the

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

components, down primarily advisory market by from bonus was the supply. were decrease production commission net expense, lower fees uptick and driven $XXX following the the for equity advisory chip. QX million, of $XX and fees payout The seasonal As million

to payout onboarding XX.X%, unit. in up QX for Our XX seasonality rate from quarter points due typical basis about the the was

sponsor up sequentially. term QX driven payment million by from ICA to assets million, was down $XXX was balance. $XXX as in in the during as revenue, base well revenue non-recurring respect average quarter, client million With higher a lower as QX asset $XXX revenue, The it sponsor Regarding cash as $X by was interest $XX rates average higher QX. short driven in decrease well million QX, million

$XX Within client billion sequentially balances, buying is net the to we that highlight would a balances $X in we added leading new portfolio, of in the was saw ICA $X rate our we Looking ever capacity banks at of in And $XX have which million, overall of of down seen. billion client QX activity further level deposit by end increase I quarter the billion. cash at improvements contracts. increase quarterly an driven as billion, demand, fixed $X that highest

more the ICA primarily Looking at during from was in it the QX driven term basis closely our in increase yields, QX, by quarter. basis rates up XX short points points XXX

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

As million was XXX revenue, from up for National IRAP XXXX and by QX, quarter. driven about our in Adviser Within $X fee it is up roughly QX, group, last which million the quarter [ph]. our from service we $XXX ended with Conference from services and subscriptions, revenues

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

advisor we do conferences results, not have QX to in large the quarter. any ahead Looking

We expect service to revenue sequentially. by roughly million decline $X fee and

transaction was trading it down volumes sequentially $X million $XX as million revenue, Regarding QX declined.

note activity less trading is October. day. we training in have QX, there ahead said, an we seen would As That I one in increase to look

So likely that. that would offset

seen on so And be would revenue to what transaction feel we great. flat relatively we we expect based have to date,

to sequentially. QX now G&A million million Core in was Turning expenses, $XX $XXX up

ahead, continue to to to drive see growth. we invest opportunities Looking

we So outlook XXXX while be within expect higher year end. be G&A to expect Core the to our we full range, towards

$XX up driven $X,XXX our outlook for $X,XXX first million are of person which advisor because it hosted million. sequentially, $XX by conference On returned expense, As the format to QX tightening three a a year, we to time range in the million we was expense promotional higher years. of to an conference the largest primarily million result, in

to recruiting growth spend ahead conference system. by we transition expect continued offset Looking lower partially and QX,

million will by As expense With depreciation million million a was promotional decrease sequentially. $XX amortization, we result, to up approximately $X respect expect and QX $XX sequentially. it in

QX, we expect sequentially. few ahead Looking increase amortization by and depreciation to million to a

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

to ahead we where to expect rates increase given QX approximately Looking million. interest LIBOR expense to are $XX today,

balance QX. corporate QX up our strong million remains from management, with sheet $XXX at cash in million, capital $XXX Regarding

Our and This a environment, down QX. interest times of our by leverage of times a power. was in ratio from combination improved rate higher meaningfully which driven have was X.X decline X.X both our continued growth earnings

leverage unchanged. is going look ratio our sheet forward, at our we As strategy balance

focus believe range and for half and over positions investing between a strong power, growth. time sheet balance downturn, having Our invest of half absorb we strikes balance a sheet updating a With to is us the and our are we the maintain growth. market improved to while same leverage to target at for can and of that right strength a operate range well economic earnings the preserving one capacity two to times, our to a a which cycles, balance

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

we share to end increase This repurchases established to As $X billion QX, that existing will authorization we of we million. our plan $XXX the complete to ahead at XXXX. of look approximately

we Looking $X work be on focus an our over begin framing to new execute to a years. which place quarter put a the in billion, two With authorization, established new to we'd roughly of authorization that executing XXXX. first share expect XXXX, that was in amount we to of in in position mind, a against repurchase we

the merge. business growth results. In to repurchases or organic another strong retain warrants to financial we will we the as quarter other and and capital closing always, the flexibility As opportunities adjust pace of environment delivered as across M&A allocation

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

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

Your open. line is

afternoon. good Hey,

to off range. question, adjusted wanted buyback target the Matt, with and So start on a I the just leverage

for authorization. pleased hoping see low quarters. cadence So given fall to the leverage timing of hear see could below or I executing or frame buyback range likely in step you you $X just in should certainly both. the that the end was And up, and that to coming meaningful billion EBITDA target the

Just we buybacks target think any stay opportunities should long range willingness over or absence to your how in around of the appetite about M&A, term? and optimize leverage within that the

the a think think I growth And right a million focused that I I of balancing capital it, $XXX prioritization it is you would we're we $XXX the deploying right, mean sheet with a capital prepared around think think I of third. emphasize strong is organic about balance I to as and remarks, years $X second billion is that, returning think what And on that making sure Sure. roughly, over quarter versus through I bit core And little when talked roughly the then having growth. drive we hear that allocation. M&A saying to the on us two shareholders million. in

down. highlight, to that for expect we I to that a we the would just to of an period and more growth for time that towards are for if it pace and organic get occurs, years, see deploy slow opportunities Now or or time where And M&A., of to more organic execute would interest two M&A opportunities if there's faster. elevated us through period capital for I'd over fewer against increase expect rates extended growth opportunities opposite

those just the judgments about along the see, and it's that we we'll way. So make opportunities really

higher certainly, targets the relative market And for was the could great. expect in to that a my And terms activity. I willingness of for just for rates bolsters M&A declines been are similar Dan environment of to you those follow-up, on given any particularly front? just position benefit question active landscape, they've or the the feeling maybe engage from higher pressures the peers, That's without rates? on M&A hoping your competitive How offsetting the benefit to the that speak versus equity be you deal self-clearing. in

Yes.

And to So that obviously you allocation we as as as when we two growth. Matt complement a before, capital, organic Steven then thanks think prioritize to for M&A the that think organic ours. areas. And about said, of I question. that look we've said key to And there's

operationally, all if more to to speed us create other makes contributes ecosystem way a second to the to the to a our in on that the deliver like sense We we and and/or look that that's that overall opportunities do explore that entire through in marketplace growth-oriented we that options way fits enhance category, value, execute continue those X it second scattered And capital continue then that be you alternatives to and to M&A the up we good deals with capabilities and think our consume well that relative we can binding strategy, in. to and ample our available acquisition or quarter there respect growth. interested certainly were to make look exploring smaller saw deploy and opportunistic inside I to up in our from advisers for opportunity the would

all may right may I point and in your -- of we our change we make again, complement market, at in looking for conditions those stay more [indiscernible]. may the can where exploration that opportunities acquisition consistent we the And market market using don't think relative and our available. leveraging how to think So our and our how get Certainly, at has M&A. posture around changed we about strategy the

helps. I hope that So

my for so very color. Thanks That’s questions. taking helpful much

with question. our next Goldman Blostein Thank Sachs. you, comes our question And for from next Alexander Please standby

open. is line Your

well. the as for good question guys, taking afternoon. Hey, Thanks

So maybe start along the around but starting question, could lines your level, question also bit flow to to obviously characteristics, meaning improving M&A. similar strategic as a of with I from Steven’s But you're visibility a also extend cash more. the

from be if accelerate in to areas are investment opportunity And think order what share what that best the growth want opportunity? could you to channels organic where where organic products? the organic in a to more So higher think perspective, accelerate were from you you'd to invest about capture the an here, to growth the of are

a great you that can then It's Yes, you of question. compliment to a add let me question. start, sort a that. Matt It's can

look, I the that wealth look would different, two the management automate One obvious we how create the the win we across landscapes. spectrum content. from that offerings, our advisory and platforms marketplace. capabilities of continue we that would differentiate our the So expand think, and anything platforms be, in across Think about to do can advisors more help

great planning In platform. places, other continue alternatives, etcetera with invest capabilities added examples planning in up financial about are to continue really examples in or our That's centrally our compelling turning that we again, planning of overlays, investment platform, terms differentiate UMA a Those we, and and that options, capabilities. a in can I marketplace think of in show where proposition. that value when to significantly the advisors would comes our we tax and where of help the broadening interesting competitive other advisors are we believe into managed think

area we decisions, what's can how one help So makes at businesses. really would them do be the understanding run them that anything in more one this that's do would that that, of Again, in we better of And happening better we second their focus. just and making effective businesses. example where

turned into our data points as create solution, those example, like, whether leverage are to CMO would we marketing of continue capability that expertise, our better examples where and making, services. analytics to be creating in CFO invest decision and solution, So using an

same us of to better time, that That's evolve into use at to platform, explore and about technology then purpose and how our So that you time. and models may compelling you where create combined, to and take spin our affiliation businesses. continue the actually may plug evolve, combination optionality more, Look, extend you operate run should addressable of think you celebrating so advisor and how help your all them and ultimately, helping our deliver advice such win we that our continue or them they services better overall and for differentiate the model. invest. to Think that, really we do we think expand enhancing and by and platform flexibility over for market, interesting are more more how places they

we same Matt, end So that our those contribute just couple you about store how drive set know think if store to of I of add? of obviously sales of would a and new into which overall all are deploying the sales, [Indiscernible]. don't -- capability examples might want towards would

it No, up. covered you

where follow Great, don't sweep go? I dynamics even with you thanks. up more spread competition a on in to And over fixed, in or kind just bookends have are they couple you the how thinking where starting quite that, actually piece, Thanks ICA variable last is obviously, deposit increase you And on How from for and are about it. broker point rapidly months, changed clearly But -- think think that. quick to start the ultimately banks about channel of the see could portfolio, the the of my last could here outflows. to the the spreads has quarters? see the would to the getting spread on three starting a

seeing we're Yes, those demand definitely leading, leading to spreads.

to back kind just maybe So of pre-COVID. walk

in as flat enough said, then then And typically of, landed get don't in last funds starting funds new you're know, I now that so we're and and place lucky I that we XX. maybe where to if we think so. plus as usually during to a at year round then Right, think get in lived X or see we what a to zone to Fed now minus, right of I the we think right where probably that XX, a with think free and it plus COVID, Funds to were the XX. able spread putting the plus just you're I you I contracts XX see be And book would seeing even Fed we're come XX. if think I anything variable don't and code place were we're ended things back we

would good I But think point trend where the place with including we're positive XX. to I each that's go. it a one. is a to plus think quarter on think seeing we X that this it And quarter to

much. very thanks Great,

Thank you. from Please question. And our our stand Stanley. for with question Morgan by Cyprys comes Michael next next

Your line is open.

Great, thank you.

Just a or would question remaining still terms look then on us how maybe or with you remind that CUNA kind on to if the from could And the bank you there on outsourcing were just on through you're balances the the rest the just others, come more if in People's of pipeline funding if announcements front year is come in mandates. to as United We of update through? months? arrangements? year much saw no through be we having broadly, standpoint come any, regarding and surprised XX the outstanding next that, into the quarter, can over the And there a us banks, conversations of you additional and that through next

Yes.

with up? I'll to unit? that. want transition you balances Matt, to pick outstanding And this, me terms of what's then in Or, Let start the take the

good. it Yes. Yes, sounds

on that's the between onboarded mostly $X.X the to on direct it's think call of those. side. I'd come billion board. it two And the that in I on left

but a be bit time. those billion that So process longer right the for over, would takes for $X.X little that

for maybe second the of then question. And part your

effort the of concept the of to $XX see solution to financial we've that from talked for the institution into opportunity. the scale which of right? So these an the financial affiliation of So couple and the billion look, outsourcing offering, sort has strong And believe over marketplace, that all in all a selectively the model assets continue model in value as billion, $XX last proposition into large originally, we institutions just see years an the new we shift management growth I experiences better way momentum in hold. everything or ongoing years added attracting demand continue of think to what larger day last institutions, think innovate the to partly better done them of we And we've years, transition as I couple how a our client I this results couple risk profile more to these you is given of sort about in continue That's still both and appealing. could think roughly really introduced support continue management we And big over. the imagine. model also financial added all we as we that them And over we've day out. last better and more pretty change is you over terms how advise make

we future talk to prospects. as So

the the transition. I the simplify for we do and in able we're provide expand them, think overall to continue deliver which quality to effort which at we value, management it and the change

terms the are opportunity bit improvement to because growth very we believe sort we momentum pipeline. in matched in of a little harder durability growing the these and proposition, solid are in though cycle, good have And a we and momentum. longer that still sales they're enhancing opportunity have value have of deals optimistic with good the predict that, with that timing the the continue So around feel to

And just technology Okay. follow-up the portfolio a question on spend.

depreciation there relative basis? amortization rate of XX% continues in we think we I capitalized? D&A just through the remind goes Can expecting a see a the you we expect the little million on drift growth to P&L, $XXX then that on growth evolving? sort this year-on-year higher, that year. guys what are so to of versus P&L what you portion the can How or that and us And over you what's saw see quarter on

I at there. the there's portfolio, been quarter mean, I goes the and a rate, that million and growth on that piece primarily capitalized On that's that the growth, Yes. when quarters last look tech depreciation few few think amortization a you

a good that's think that. about framing I to So think

capitalized the good XX% the of think capitalization particular doing tech portfolio, But work rate, it XX% On versus thumb that type expense. depending in quarter. the that rule expense on is of moves I we're a around

Great. Thank you.

Thank you. next question. One for please moment our

Hawken Our next with question from UBS. comes Brennan

line is open. Your

and we've Good a to as some driven my in seeing taking go of afternoon maybe Thanks I'd our wealth questions. heard expectations and whatnot. bonds other have you tweak more for demand should brokerage growth like And start, yield on in your growth guys. and for we side by the interest that term? near more mix to shift well? the seen find Are that buy and from firms management investor

Yes.

mix. So some short are answer seeing is we

very market income the Fixed it's I think assessing of right that. conditions. is you're by much of a good macro that in sort example environmentally driven

think also drive alt seeing a mix And of capital relative and a kind way you're I in in annuities. a market solutions perhaps the in it space new of conditions. the to to deploying higher those time-bound

you've expect In up of overlay. slowdown bit also environmental some of the noise we sort from just it in trend to a still show of bit and little brokerage you that of that think that a seen well, have to structural transition the run think advisory. in I a I still makes sense short as think continue.

So the mix. I those right are slight to way about think think

independent we of to recruit XX% would that larger new some the expected, of advisories that of And still before. they and still once bank which do up because new. we that brought much enterprise I If we advisers we've brokerage little to capabilities in a of macro and mix to or much assets expect platform expect as a advisory, and see they you'll see at hasn't assets to on, more now better or access probably a just more trend than time bit that we sort trend the have solutions of is of as trend to a about macro, see to we assets advisory. their sit transition typically to range to advisory But XX% overall over deployed tools, get because continued our higher in all that probably for have have that our typically also structural think you perhaps the begin reasons look that we from on of brokerage books talked

I color So hope that helps.

environmental an still little of [indiscernible]. kind towards a over structural exists trend influence the to that got You've of the bit advisory

sense. mix Sure, cyclical and little That of lot the makes a with of secular.

Yes. Yes.

have do we Should there I that would of great. or months. Or reason might with some driving continue little impacted that then factors growth about a been of expense about at the that, next by and the that play come second expense in using? think lot for rates tailwind is XXXX. for thinking any how should We've forecast and you and But incremental will of along any we a any we trajectory out be that investment reason point? provide -- be the out question, that growth -- to several And platform. assume early, rate Okay, as know it sense some slow it's of interest will my the in a some but benefits for be seen bit would

falling cycle, impacts that that primary that, been from category do interest into G&A, And that is year, looking really right? growth across the color. right, increases as And the our primary -- just building allocation past. typically drive and were you mid-single-digit to accelerating our we've pivoting rates cycle, really of year, those we incremental the your the on benefit Core part those just Sure, our framework that from growth capital we're mean, when growth Ben. really that got in in capital line it's And bottom be investments give is we right, rates think then XX% give and of mid-to-single advisers. the look rates focused start this And some -- in to drive coming to bit on we've that at I'll we to little from improving look look think in those you been increase XX% range, support the when allocating at. right? at the early a think a we'll this at. competition. the deploying investments to how financials, value And first I point and -- to improve the support as early. organic the highlighted category, and I the we we to deeper earnings margin, the our and cycle, I'll I from X we we economies, when And areas about

potentially today, see talked Now a M&A, in opportunities when other -- and $XXX about million shareholders per the to returning we QX see quarter at to We right, $XXX million that look increasing options, pivoting million capital year. the in we've we right? across $XXX in buyback opportunities then roughly next

we in it's finalize apply Investor always and allocation Now in on a on to drive we're I I'll interest a and I think the share guide at year, same we them environment position opportunities to to rate weeks, year-end out if earnings have predicted, we'll few color to on use framework do as invest plans going growth, the next us. those more the share and call. investments the be front does And of bit our level like we'll think capital normally then a and that Day play

it Matt. Appreciate color. that for Thanks Great.

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

Your line is open.

question volatile to slow move on Thanks, start adviser a appetite typically, or to good go evening. want we just markets, I In with adviser away. see recruiting.

So good recruiting strong on to hear the the pipeline. comment

dig I'd kind curious, bit around And there's executing like little you're to expectations pipeline. I'm channels, of a what building. just maybe seeing actually then like maybe will where bit on a just spring across a So little in momentum of coiled that

conversations I'm pipeline a slowed that the expanding. has assuming So is conversions bit, but natural maybe in what's actual the and

color more just love I'd So get Thanks. there. to

considerations. supporting talked strategic term, certainly right, talked store we've complexity headwinds focus the on serving their new we've said the or short about some then delayed more recruiting rightfully and the clients in conditions it, Yes. and it, about, Devin, drives sales as can so sometimes marketplace create you and across macro the in

to So pickup improve those of programs. we beginning I quarter some or the the practice we their about saw third give a to market-driven their adviser desire talked headwinds think as in of structural certainly way to an

good seen recruited of the models capabilities the that to RIA in And for it channel, so And the feel feel one forward, focusing the a advisers little and if quarters. new channel models, pipeline standpoint. consistently wealth feel each again, channel we all strong aligns last our X so back have, strategic enhancing finish the recruiting three up employee program with as billion year and I models over from well a as of our certainly, you've that sets and affiliation like, traditional a we've as certainly think the pivot as model go over the to about well are the we the new right, on well those great different we we that structurally these across we've created --

overlay evolution focus then we it for afield sales. great as so And good our to And trying top, those the you traditional markets. new store positioning go for feel we And going a interesting our the market marketplace sets about in we that financial institution up on over higher when continued drive forward. as the complement of continue to to

the to with you appealing buying we've I Hope recruited efficacy at got model in billion continue breadth affiliation on work met both think better, and answers… XX look with the met drive that trailing if outcomes, that our to continue we [ph]. more XX, about to results and execute to models of

the it's kind ranges a you primarily about X.X% as some you. the end. on assets to kind today, LPL, in that's than operational of higher trended wealth cash, But color. follow-up, kind its just where of of And think customer space. want appreciate others the has different of you're and at of of Great Thank Yes. I cash

about low was from is the average X.X% think like the in XXXX I X%. in XXXX

average, normal, I we where market are quite that where the thinking range. if of about denominator in and higher love sentiment here. get help back back maybe also X.X% is to matters to gets bit the end, just we in in I So kind know any improves a more we're the but something

about So thinking to that love about think maybe how little guys given range where is cash you more that a trend and it could to are you just operational.

Yes. operational. Yes. It's definitely

that the referring best history, that things you at to think empirical I the to. data the were look are

X% of been. average we've an think I is where

of think they brokerage And were our higher in neutral that But of have than more a gone you and as different have in were of So down in back mind, position the are market then. cash They amount to keep today. to mix assets rebalance. general, closer a lows advisory maybe will facilitate X%.

So in -- low upper X.X% X.X% you're more that mix low zone I where that feels we're change, that mix today towards end change. And end like right, think that is given that would maybe certainly the sitting end.

I would that that's have. So range the

contacts, are it. of so appreciate couple Those Okay.

question Thank Bill with Suisse. for next from question. Credit And you. our Please standby comes our next Katz

line open. Your is

you for Thank the Thank Good you very evening question. much. everyone. taking

line maybe picking of last questioning. that So just on up

higher, sort range. Just the back that the the how else Is to your being on percentage are, points relative of float wonder given if you into I take to see XX% in XX add target maybe where of then about to I get you the us should reason range? of number you XX% quarter. we pacing there update thinking think all you fixed that sort could to any to think And could equal?

Yes, Bill, back. and to Welcome you good again. to hear. hear from Good

portfolio. XX% target rolling a our at range to think in remains I XX%

to interest fixed where also there's fixed, some even year to add to now, we're And in XX% to amount like able steepness QX, we'd think that's we've and the in majority of bit want billion We of and higher billion of able little low seeing right? And closer be the what year subject rate right. we'd $X of rates meaning we've market, add a new been periods rates, to demand we're So right? is -- pre-COVID. been our is the I of into to that ever, closer that that to single $X to right? just billion, I we're the volatility. added continue this On brings in balances want most in the maybe in minimizing on periods of to think curve, getting to color So to ability do the a XX% really $X that we're does return, in that overall, ICA demand there stay

Right, strong. shrinking are environment be like balance banks continues to the to all the balances additional healthy. are and things consumer the it where that And rates demand would more feel the improving. look from growing. sheet those Fed their And remain raising when up from does point to to to continue is of really at themselves, then you that forward, set spending demand. it's So lead certainly Loan side this

about or in and whether FX. becomes more and fixed banks not liability what their their interest those is asset management Now that's

banks -- far So it say all conducive approved. has more the environment overall becomes but I ICA. a to we've take and little in that there'll challenging information been to fixed bit what feel needing that confident so more is be more that seen And

XX% monitoring. there, we'll that demand is the low improved, we've today. I though that range even which So the to manage But we've we're talked still want below through, XX% we'll to if keep think of end

Okay, thanks. And just a follow-up.

front or Why I'm sort cyclically coming the X was down. couple going Just turn. and apologize years. the would down? previously X heard about commentary the less franchise just significant there forward? I heard understand I'm The looking this messaging you leverage a power trying next a of of that back of is it target say to X case. It leverage if Is incorrectly, better earnings it I that to function perhaps certainly of Is you something like that's has bringing It What reduce why X.X the bring now step the to conservatism? new ratio has I be your shape. to of feels in and point correctly. quarters at to opportunities this in been probably X.X maybe it? never

Yes. Yes, of course.

the of when look has sheet to has growth, capacity right? invest combination strong down. I think and right, we really maintaining driver environment improving, which ratio focused Our rate our having So interest ratio power the for growth. on unchanged, leverage combined with been a leverage our a decline the earnings balance driven of the And right? is really strategy, at in It's the

ratio given when even for what our solve about the link. the be ourselves between to so to things, times things, consistently the is think striking cycle right thinking declined, those making second, and solving just to sure for objectives. we're balance and and given Right? wanted that leverage support -- for those economic we're X.X that to we something achieve our macro all we positions able advisers be, sure investing growth. target So really to positioning strength two leverage should And preserving perspective then that us X.X In in our sheet balance making

So that the driver. was

you Perfect. much. Thank very

standby our Thank question. for you. Please next

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

is open. line Your

Most I just updated in evening. know answered mine terms but the over XX I of couple Hi, have betas, already, one betas been the good of increased had Maybe incremental on follow-ups. a to could of set last if those XX% peak betas basis But is you wondering now to thoughts more to there of just move the more as provide trend the Fed on some points. the for incremental last meaningfully above -- cycle?

And look coming around XX%. us. coming right, most the think we're When you are They far have bit favorable, recent peaked would that highlighted. cycle, betas as Yes, so hikes, better. at in little mean XX% Kyle. been I at for have a I you the in last the

that's is product think those We've betas. Our to competitive competitive, here And continue it what remain want a we is I drives got to -- in approach, right? the marketplace. we'll monitor be though, and that to

in So price anything just think we to that would the price I way. I a sensitivity marketplace, change product. continue we'll see meaningful don't say, particular the pointing looking to this at of

than last up ended being think we'd time. if So betas I be surprised materially different

just so then a corporate the on cash. leverage on And more really Okay. conversation just follow-up

XQ, just higher that near-term opportunistic last to balances. the your quarter. than maintain you're accounting years for $XXX cash in historically there say, of wondering build million there's You just if preference to of cash I'm decision-making end corporate a balances to balances the when to or you have cash on over the very maximum a the built for X X likely maintain of repurchases higher is in kind in into the year. over up running still flexibility cash And third with higher even order M&A, part

we're there same to corporate think there's nothing allocate And all infer quarter, prepared materially things M&A that capital I So can our it of what you And pretty to we hasn't back changed returning to right? those I and about have framework. invest second going build in which is allocation no our to to time, it's emerges be improve of advantage the think capital and opportunities growth different, see at balance -- before. each think economics third. our shareholders the to million. being $XXX I take Well, way for about other cash than first, the It's cash target in organic

target our that will to and above framework. deploy allocation we're capital be So but objective our across now, it right

Great. Thank you.

Instructions] to conference closing now questions I'm this turn would for at Thank Mr. no the showing time. remarks. you.[Operator further back like I to Arnold

and for Analyst greater afternoon. detail. And look then to New Hope time November us everyone, we Day this the join we're Thanks, in York as reminder, a forward you XX. you to holding We in taking day. on our speaking Investor have discuss our with great as business a

participating. call. This concludes today's conference Thank for you

disconnect. You may now