LPL Financial (LPLA) 26 Oct 232023 Q3 Earnings call transcript

Good afternoon, and thank you for joining the Third Quarter 2023 Earnings Conference Call for LPL Financial Holdings Inc.

Joining the call today are our President and Chief Executive Officer, Dan Arnold; and Chief Financial Officer and Head of Business Operations, Matt Audette.

Dan and Matt will offer introductory remarks, and then the call will be open for questions. [Operator Instructions] The company has posted its earnings press release and supplementary information on the Investor Relations section of the company's website, investor.lpl.com. Today's call will include forward-looking statements, including statements about LPL Financial's future financial 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 Commission. disclosures forward-looking refers statements Securities other the the earnings listeners risk under to company's The more the uncertainties, forth caption information the as the as well release factors such risks the filings in company disclosures set contained in recent Exchange and

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

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

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

achieve guidance taking dreams. work, take personalized focused clients. Over our journey to the clients their our we past with them life they so of quarter, advisers provide of care our on of their that mission important the to on help support continue their goals financial care remain advisers can help To and

growth the stability and continued invest into due we our capacity commitment our our our and scale This quarter, the to to industry-leading back of appeal of future of combination to and see the platform. the model robust platform, model and

helping progress appealing opportunities a most thereby and As the as better and to else in solve in advisers anyone serve challenges player continue solid make capitalize industry. than result, enterprises and on we the

execution results both progress while delivered plan. we performance, make quarter areas, of results. also the with of starting third these our to continuing review our quarter strategic our solid of I'll on to respect business With another

as organic In solid the was at lower by markets. assets continued growth offset equity $X.X trillion total remained quarter,

Bank In of billion, assets were recruiting. $XX West net the QX $XX past Commerce organic quarter assets net growth months Prior new growth. recruited XX from new Bank. of approximately the assets a over for to $XX X% billion quarterly enterprises, rate. contributed were and annualized organic record representing $XX large billion XX% quarter, the represents representing Third a billion, including This to

This by model our market. expanded as enhancements outcome as the ongoing was driven to addressable well our

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same-store our result, and are a expanding clients. winning existing QX. advisers clients with As solid wallet new sales both Combination that share in drove

retention, enhance and operations through adviser evolution we respect new of the With to capabilities our as technology as the service well continue experience to delivery and of the functions.

As over a for XX third last and the XX%. result, months retention was asset approximately quarter the

an business Our outcomes year led of of third XX% adjusted a of increase results solid $X.XX quarter financial to ago. EPS, from

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

the share. vision market of long-term best our across leadership and the a advice leader reminder, advisers a to clients this as center adviser Now great become to empowering to industry be us deliver at to Doing marketplace, and gives well the organic us experience, is adviser which great for enterprises operators their the sustainable across being means their business. to path and growth

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advisers compete such marketplace. all that and we for advisers they meeting are affiliation XXX,XXX involves in the of evolution in work flexibility enterprises in our where the businesses creating can the This by models,

expanding As solid contribute growth markets, also our in while our to helps strategy traditional our this a result, addressable component of model.

rates recruiting of strong the in business the saw in efficacy new third and adding our the our With of of quarter affiliation and development win in result assets. appeal and respect a pipeline. independent our of model wealth, while offering, our to QX. employee $XX we market, our our to our recruiting strategic also And our traditional roughly depth Over models, billion team, enhanced as delivered in breadth approximately we quarter, maintained industry-leading date, assets $X expanding billion the strongest we RIA

thus these further to Subsequent combination is the advisers. of from ago, models demand we these value. to Add creating capabilities their have few a years to that differentiate growing the and models more launching awareness continued enhance prospective that their in marketplace, and

our we increase a result, to models. a As new sustained see within expect affiliation in growth

the and organic be growth bank $X as QX. of contributor a union traditional to continues recruited approximately added to assets consistent credit we in Next, billion space

the further the to continued progress onboardings learnings from early experience. previous The feedback we West from apply continue to During quarter, has large of and with onboarding positive enhance been Bank make we as also Commerce. and to enterprises, the the transitions these

we are experience, our the we confident positions unique This alternative commitment QX, of announced milestone Prudential to its that also a a enterprise well part complex broad model appeal would and enterprises for our to expanding as spectrum for the matched market. second ahead, our help Looking value in reflects business with onboard In the management of solve needs industry-leading of Financial of platform wealth us compelling that and this retail reinforces our in onboarding appeal our institutions. of proposition half the the of XXXX.

by encouraged the pipelines are momentum enterprise across strong we market. and ahead, Looking the

platform and thriving businesses. win and of Now within differentiate help marketplace that a we our advisers our the and are integration run services in vertical efforts, delivering technology focused on capabilities, comprehensive

more our clients and UMA and This plan. progress enhancing simplified past of services value key within text to provide our to lower we this These Now including platform. the trading includes on over management wealth a platforms and flexibility work expanded part pricing, advisers evolving across and journey our enhanced the differentiated like advisory fronts help capabilities, the the several personalized quarter, and investment efforts way. make for and will the our value-added continued strategy, continue through to world-class continuing more management, choice build

Now as strategy, by enhance proposition of encouraged integration an expand our seasoning business. evolving continue are our we additional and services of the and appeal to value this our the portfolio of vertical and part

As with of XX% solid number in users, a our increase. utilizing up services demand X,XXX result QX, ended to the quarter continued active year-over-year. group of the advisers We approximately

and recent reminder, we that are capital million to succession close external this a with our date, this LPL of solution a with advisers which we benefit approximately As portfolio LPL recently see XX our [indiscernible]. and of to solution, advisers, $XXX offering the interest and innovation And began existing is encouraged resonating is have early deployed to liquidity to are in building. learnings insights, the where

in is recruiting support this solution summary, Finally, growth efforts. clients enriching market for In we the our invest and service our and third by so, proposition continued appeal our of increasing leadership. advisers to model also driving value in to while adviser and quarter, another differentiated providing the their doing the

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

our In in everyone led we Thank to and This and continue to to our business third and you, delivering succession quarter, organic the growth speak traditional both call. today's focus make on new solution. value. focused with we progress and and glad strong on advisers, remain serving Dan, our I'm shareholder growing markets, with our liquidity

invest wealth onboard the Bank the of addition, and In management business our in preparing proposition. are in we West continuing to value onboarded to accomplished all while We industry-leading Bank Commerce of Prudential. of this

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

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

as from assets QX Prior well included large $XX recruiting billion West Commerce. new which this for of overall $X models, for in as which quarterly Our was the billion these quarter. a the to were enterprises, affiliation contributed Bank in record our recruited $XX billion,

expense combination or of sequentially. $X.XX growth EPS million financial X% QX As and adjusted to for $XX led results, Gross up billion, was our the profit discipline $X.XX. of organic

As for Bank were net advisory was payout payout our basis QX, up $XXX In components, West QX. seasonality Commerce from fees of points Bank. typical of in commission rate due XX the the million to million, and of the onboarding QX up XX.X%, $X from in

bonus a QX, the to year and ahead reminder production QX. typically highest throughout increases in is that Looking the

to rate anticipate to $X cash payout With target was we've decline year. So be QX, mix million billion to from quarterly ICA $XXX respect within roughly million, $XX XX% as down smallest XX%. cash it million. our declined approximately balances and client our $XX XX%. our to will fixed This and we marked revenue, increased the XX% of of the this Within seen portfolio, balances range rate

points rate yield floating ICA balances. decline XXX by from Our quarter, the in averaged basis a in down X basis QX, driven points

the floating rates QX, due X mix on lower cash today, of for rate based roughly balances As our to decline yield impact we ICA points where client basis are balances. interest and expect to by

$XXX from from As million revenue, Adviser Conference QX, our primarily for revenues service million and National driven was in by IRA. it fee $XX QX, up and

expect do we IRA adviser seasonally Looking and fees. not QX, large ahead to any have lower conferences

revenue will roughly fee decline $XX million by this, anticipate Given service we and sequentially.

It volume. on to to million revenue. trading transaction QX was sequentially $XX Moving up increased due $X million,

an in QX, As ahead we we to look activity in October. trading have increase seen

to date, million of by couple So we increase based would a revenue have what expect sequentially. to transaction on seen we

advisers but unlock the The for strategic announced advisers only Prudential. August, will existing Now serving we including X,XXX that let's relationship business its roughly are in In to opportunity wealth onboard broader the improve on platform, approximately will client our serve making assets. our serve our this not with turn to $XX advisers, retail management a and their help help Prudential also to relationship Prudential of we enterprises. connection investments billion and us experience with

ongoing board. approximately benefit $XX we to from respect are rate With earnings million the run Prudential, benefit a continue on to they EBITDA once estimate of

with we ahead, in of we cost said, million, continue of $XX transition, provide we roughly terms updates will are expected QX. the to we costs making onboard to as progress the Looking total in of approximately estimate to integration continue million With $XXX and Prudential. on onboarding that prepare

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

associated Looking of we XXXX by G&A are costs growth, range the end lower our $X million. growth supporting that and the our levels organic of core given ahead, variable strong with increasing

we range core billion $X.XX to be now result, to a $X.XX G&A expect in of a XXXX As billion.

as $XXX promotional was up adviser during million on $XX largest It year million, quarter. Moving conference our QX expense. the to hosted sequentially the of we

promotional related in Prudential of million $X roughly expense QX. incurred also We

expect At Looking ahead $XX the we time, and by for integration Prudential we same expect onboarding to QX. will million million. approximately by to to preparation QX, decline conference increase costs roughly from related $XX and ramping spend be

So overall, promotional to we expect flat million QX down to sequentially. $X be expense

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

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

for our increased floating rate expense, of by up in million revolver. impact was sequentially interest our $XX As higher debt QX, million and of driven on the it short-term usage interest $X rates

expect Looking ahead increase and interest we from debt by given QX. interest million approximately to $X balances expense QX, to current rates,

We corporate $XXX $XX remained million Regarding sheet of QX. million ended our balance from strong. cash management, QX with down capital

was ratio up from leverage QX. X.Xx, Our slightly

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

In QX, across framework. we entire allocated our capital

allocated capital We return growth, succession drive organic support invest to repurchasing continue and of solution to capital to within $XXX to liquidity million and our our M&A shares. shareholders, and

authorization we As our million years. shares, on plan on ahead X track us we repurchase of billion to to look over QX, keeping to execute our $XXX $X

summarize, value strong and results. sheet is well balance to frame. capital closing, of financial our allocation business are through delivered To another and In quarter drive our we strong, positioned we

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

[Operator Instructions] Steven from first Our Wolfe will Research. Chubak of question coming be

strong XX%, with slowdown some how organic range of to the tracking the in in would what guys in I confident I saw the XX% in the sustained? in your wanted peers. say biggest of to fact, just figure NNA assets this up to NNA end XX% past. stood recruited could the about growth quarter? the result that outlook. higher out came be to off at start of And that The hoping were was what the on the with level a have you the we really X% unpack relative are share the gains contributors question talked can, I organic you at was you growth

Dan. it's Steven,

can take Let that build me that. And certainly, of we off answer.

a term, think diverse but for that look, the the enterprise I to models, think solid only adviser a off as in and probably point of we've across in So I the of of the got saw speaks jumping our growth, it's place breadth short diversity as XX% we not And of and said, of sources quarter. the a growth. just growth you contribution all volume which importantly,

significant that if And inside highlighted things I outcome. I maybe that QX are a think of couple to overall

and operation solid by certainly to the execution performance continue appeal in I the and see levels store The sales new that be the billion quality of low a to That's first to day assets it's of in would solid And the the reinforces think we attrition complemented day. X% where recruited of for zone. X.X% $XX outcome we quarter.

And ago. the you $XX think look back of across we right, if quarterly different think if double of nature which of opportunity you or assets, QX more sustainability you recruiting of in down you $XX set. a I to billion the recruiting down lumpier that large see pretty our the adviser-oriented that take billion I of well some year assets, it large as feel store that growth to is new had on happening as models. the good enterprise of at prior we enterprises, underneath And in out than about of click out feel put Again, sales high that all of that. some And diversity

position the look, for better puts the any looking continue us It's so a right? for home. potentially gives of friction of out. that's model, in and us affiliation drivers It's a it in our to model then competing And of and our the to expansion that, us simplifying continued Pfizer flexibility to make differentiate newer, take the onboarding you capabilities of easier and and to help easier invest move of

and as We those growth creates forward. to our things key overall believe well, good it contributor rate sustainable go a do we we solid and growth

So that I hope helps.

That XQ That's in said, sweep deposit -- we XQ in really And And balances to cash tax outflows And cash continue Matt, than being harvesting? Dan. XX% surprise, roughly were a benefit follow-up How from seasonal down X%. September. color, client any cash peers. for of levels at more October? surprise you did for are maybe my cash that client trending to levels far helpful saw anticipating on so loss are resilient the question cash. X% declines

Yes, Steven.

tax end some cash or is I and So you the in answer for your to I think some loss at history part fourth do of the on maybe the -- December first, question -- last Typically harvesting. of think if a just guy, quarter. build see in typically seasonal

we So that year. see this common. I'd not be did It's surprised pretty if

question, of at we look on the headline I'd side are October, to when started see that on the stability see as is things going the think of we say core how some continue in quarter. we that cash third the the your in to I sweep

going would the end down over be And reminder October month. at a relatively fees for almost the -- that quarter, of been flat specifically a flows primarily cash, of immediately is that the but come in and that's to which and of $X.X month here have cash out first bring the outside billion I'd advisory little

it at we in which coming put $XX.X adviser of at So is of those AUM, the be level. that would would percent that around fourth from out. row right would AUM And at X.X% a put a billion month cash fees sweep really that were

course, here, of -- in as think those So in amount we've cash I resistance account to further I could the we've those down at necessary talked starting levels to place bit look trends, go see balances. a starting you're when a about manage we about of to you've really those think get before to natural before, think I we're talked where but it a from that and got

the Now growth organic that speak as at well and QX. well. look just When of October some seen coming Bank in to Commerce, that cash of Dan really lot we've seen organic year. drives in growth mind any so of keeping X% organic assets those to of prior because the about as to nature West running brings drivers maybe positive large onboard growth those is a enterprises with in seasonal the of at in out to talking what look far was just as that there, zone. continuing other you October, of we going And month advisory how the in in in we've is additional some the to prior when first for compares well, fees what X% That on is from last October trends come

there. to continuing see we're that strength So

of AUM and And in left may then institutions in, $X.X some there's come onboard October. those billion that to come X about from of --

So up from that would there. us buy

So think and summarize in continuing I sweep as solid come starting show in organic overall, cash I'd to October levels. is growth to at stability

for moment of Blostein next be Goldman from Sachs. next And will coming one our Alexander our question question. And

on over and And then also you're through us about expect timing thinking how you time? you through how think this LPL talk refresh dynamics there? to you the the expand And on for the could Can This into a Pru insurance start number channel the with times we've with one Alex. is Luke we new If Prudential, newest being seen with you opportunity of could expand P&L channels partnership. just the TAM? the

take that look at the come you at look to just When large step and back start headline and [indiscernible]. you in opportunity then answer respect with bank will and enterprise Matt level, if set, with the maybe a me the space. answering Let

we new opportunity see that in you continue and to continue enterprises enterprise know, the see business interesting and a do X house, in large an large space we set As act would onboarded quarter, and different broker-dealers that their strategic to own approach. those RIAs that as and this TAM of consider

similar announcement economics reinforce look, certainly interesting investment They've proposition the forward And that to think experience shifting large working our managing value in and think go similar think in of case, we improvement think for of models, that you working from space these will and/or that building up the there, large We're again, got in and their a proposition, enhancing enterprise space. part part space. with I we and customized the we Prudential risk needs the chassis. enterprises with as value sets -- our perhaps solution so insurance part said, this win that that part opens of large solutions enterprises other the and growth. continued or those Pru efficiencies of personalized And help And in driving the a some us wins stimulate line top of as to in. solutions their different take hoping in we profiles, even that within about in resonate market

collectively that similar enterprises that and are these things looking we do, things Prudential. working ultimately, All are the on large as to I think both banks with we're

that So of up more is the a Prudential opportunity. open in think to is a we space. part We there opportunity discussions catalyst relevant think

continued growth again, us on on for durable the broader helps. the think, we side an insurance. is opportunity and that enterprise, large both bank market broader interesting the So If enterprise

$XX part expect latter there financial EBITDA following and on 'XX, them And assets. rate that the when would Between million. when of fully the onboard up and start that's about $XXX of they're We the onboarded. then reminders, now billion is to just are flying dynamics costs integration million would run of onboarding estimate overall and $XX and then our really in estimated

done you $XX And $XX $XXX million quarter, once of back guide the if then that rate. remaining XXXX. fourth through third onboarded, broadly million EBITDA run be in what that in quarter again, so the the million and would would they're you XXXX, we've meaning puts in at for look that come to our And far

helpful. bit topics everything follow-up. for Super Thanks the Awesome. Switching there. walking through a for

expanded for for saw just for related high-level that? quarter XX% up to that, fee This Can an revenue expectations existing CFO And think and revenue through you of services. drove opportunities? talk acceleration access are quarter-over-quarter. revenues your opportunities about you how FA do you services? both outsourced there uptake then what What service And and recently

Dan, Yes. jump if I with I'll as solution well. take to the in you favorite which the know this on first part line of is that, then, want your solutions, CFO and

so service and on think fees, X there's I I'd drivers. -- primary say

and We've product I factors that that in quarter seasonal think the the -- fees for the our largest first there. and Adviser National our come in through is the quarter. are had that third there's come just sponsors that Conference along third with revenues

IRA second, then And a high fees. seasonally is quarter for third the quarter

X through. advisers business, came growth a got from really to specific those organic the platform. But our think is things associated standpoint of maybe So with are longer-term that and fees on then second, I we've

So continue serve of support, number fees things along and the recurring here and as you've as and to grow up that, well. come show that those we with got advisers we

drivers. So those X are the broad

is also we seasonal drive ahead from the I really related more So that the -- advisers we the That the serve will I when organic the section services continue seasonality this is million you fees long-term item why think our on decline includes of growth, that's factors $XX QX, and look a to to support grow. more our out. expect But platform. coming standpoint think to core portfolio. this we coming or

to So it turn the over maybe to Dan talk CFO I'll about solution.

really just start it bundle out solution then complex be your these portfolio, practice, on were relevant you may the it to put of services for example, context our price a when Matt. initial then or the And larger at or let's our think so a use if solutions practices. portfolio, solutions, with Yes. point that rollout have that rolled may down specific a not question. an look, and you about reach didn't Initially, And Thanks, services we'll makes relevant you. -- of broader CFO our services more you out for initial if of be as we

And the through to of advisers all a original solutions that lot capabilities of of CFO sort figure that first to those around innovation, different were how package way in will the a for good a still out we so learning iteration realized within our value at point for point to for lower price leverage real that for and then advisers, would value a of and create that be create one problem that solve our needed advisers.

so their you a a new of utilization or needs rollout more with reach of this And That Essentials. them, meet set again, that what will XX,XXX-plus of CFO being and makes broader we then applicable of continue what saw CFO that that's solutions. type it call to much and our we much the kind growth overall and think to sense drive suite price of point at advisers

as the side on that well. doing marketing We're

to point or that, innovate I just, to be out entire places term we now overall portfolio. in services got a handful that relevant our solutions we of our across base. across relevant are intermediate have on incubation. in the on in another more X will them roll -- We've and are where portfolio, solutions overall could which many adviser fine that near So these we With continue think, XX

driving in opportunity them spirit continue to help helping build to a for bit for us, to innovation So advisers points run good of it businesses. leverage and continues there's we place the still of of be think a

So of that's context Essentials. kind the CFO around

will from Ryan question And JMP our Securities. be Devin next of coming

incremental channel, love love dig particularly in a Great. quarter. of this corporate then maybe Would just drivers guess, even the conversion just some the as bit RIA. there little the Schwab this on outlook a the to on to quarter LPL? kind factor Ameritrade in and going the or and, the just was for large just momentum, some of the would really quarter nice net you start kind I want there, also of about RIA maybe into of forward new just think particularly players the opportunity to I whether consolidate assets and

Devin, it's Dan.

Let cover to [indiscernible] me you're points exploring. the sort of try that

general, and you our store think both foremost, same-store overall sales You and across, we of in continue and success new progress if first different growth affiliation in again, types advisory right? I look to have sales just see all at models. of

RIA cover RIA would $X.XX dollar or invested And still advisory. that I of RIA or see your solutions. So going corporate about every think pure we hybrid solutions new to

So that's contribution where sales. you're to going from the pick up same-store

And you to see advisory transitions that from conversions that overall tailwinds brokerage your Those are or growth. are still that are driving services. advisory

advisory the of then pull help that I different in back our you models attract LPL. set and more when of we're the affiliation if how think at a join certainly, models to diverse look different diversity advisers marketplace, and they and us positioned frankly and the continues advisers are do more

come traditional and look lot with space and more employ continue complex RIA. to more A models, the larger affiliation as And our click across advisers different as assets. pure you of models, terms will new that of $X recruiting right, a you're we that quarter just this in more billion you if record attract in wires with we practices, those strategic from represented affiliation on books. well breakaways said, be And seeing significant new down those of of will advisory

driver. and of more is more in, those are come more invest of business If well actually we continue their there's continue positioned recruited And we the tends I again books business invest over have you percentages advisory that significant assets that to as in what models, awareness they billion XX% certainly more to models, as affiliation and overall in $XX recruited see that is and to XX which to mix certainly, since we've last been We another months, demand. think new And more more have success launched. to advisory look of grow. those with feeling, of back they've them, we've

try specifically place, to question which continued around see and relative think as pure we and I to to do maybe Ameritrade, win. more that probably RIA of your it's compete the Schwab a business, interesting and

that positioned us So solution market our ongoing we help be solution or to created solution. by create continue a consolidation opportunity demand type model share ensure capitalize to that invest it to will differentiated just and win and be our in that's we whether of for that on

and vertically And ourselves strategic a adviser. that in to we space. move positions more as to well share try the when value I us forward an as We that we creates this for as partner think of think market outsized participate more integrated position

ICA for Thinking All the yield here kind of about right. XQ. path Matt. beyond just follow-up glide maybe

then billion of next $X.X we get maturing the that -- of, And on hearing rate on We're just any today, the modeling that there's this cadence, ratably. and just ICA much So book as year. kind we're seeing? how is there you demand closer think we seems there, what -- even the in improvement floating are you more off But of bank about the like, like. also I contracts on look system. color just sense of more it base rolling have could kind and as

like the of just so uplift might kind there? what look And

Yes, Devin.

of throughout in quarter $X.X side, billion then think the rate $X.X it about billion, and -- the that the the year. On first the evenly rest fixed I is of rolls off

here look the side. same X- would rate And is on quarter. the a plans the way be that billion floating I that have demand when as been X-year it our you $X about reinvest that think new the And in just at as is think rates zone. contracts, in fixed So rate to strong environment, we in I to

base on rate. your of to point kind above So the spreads

XXX point, look So to XXX we're demand well. if side where curve deposit rate you're but the to spreads on you at for the is see fixed to a the X- at range, starting with X-year for this money the as in

basis or can So contracts off think more you up rolling closer to XXX. for when average can maybe those you to XXX they're points at on

up, I'd double earnings balances rounding the So an they opportunity of those on to say, kind mature. as

think range, historically quarters. XX last floating seen point of the couple spreads rate which the I'd in probably seen the I that XX On basis high. for But is we've to say side, we've

see broad the demand the in But side. -- are is flow deposits, you pricing, you're see on pricing of there quite So starting if supplier just the and point, is to you a that floating the the through can good. rate a

And our from will of Ben Budish question come next Barclays.

be long great not, even to typically We've on, in is along follow some outbound Day. kind the would does on and Ameritrade. of a kind were an of take that question showing were seen but of if is lines if Labor sure other alternative services there? another of seeing comment and you sort you you commentary can if something to the How providers. may a wanted custodians indicating who some convert there that same the that's sort it post media of not pickup interest on adviser could. for to you're maybe up press But pickup successful I I'm case if if

Yes.

out those development think one a answer I So exploring opportunities. affiliate an that team. for models, and with registered our in obviously business marketplace, broadly is us, that all I'd more we It significant as in advisers of opportunity the invest potentially see we to

opportunity. I real creates think value and it's our the demand to create continue first across appeal and foremost, model, structural we that

run, what have regardless and doing be we may the then opportunities of nimble when you But team efficacy and arise they that if market of well, capitalize will challenge be able business and on ourselves to to agile the be occur. may they may a in development short to and you're good when those

right? so the how that about And to that's we think we combination go market,

go story that you're for created up agile you come then create whatever team be differentiation may and and good a tell reason. You when structural have can and nimble opportunities great value, that that

may that just in generally may post broker-dealer the there's that some when another be transition complexity assets that whether unrest. arise occur may custodian create of or that opportunity may to look, occur, that service there's latter question, challenges to opportunity one depending management some environment, back from in technology, new the in that occur from your transition, because occur challenges, the one typically, that, new And marketplace, around then general there's whatever that the that may change be So transitions may case on another. of

create occur. to may and that well again, occur may I some when I well be that opportunity where free we conversions, post those positioned capitalize that prepared conversions to may And And hope think and helps. opportunity. try

of on follow-up corporate few Understood. just target Maybe last just ahead level. cash one the quick -- your been Yes. running for quarters

timing maybe Any degree the the you quarter? more a what for to intentional? there Or helpful. that of is conservatism color or be just Just matter that would end is for could share

balances Yes, look the leverage think a corporate you liquidity, about more overall you end of cash our bet. overall up little our ratio think when I being it's Short answer is bit timing, right? timing. managing I at

as As that. . simple

from question will Dan Jefferies. Fannon Our next of coming be

And And the and I or would more churn maybe that? adviser the churn looks industry of what for potential XX months? on for that to what the that quarter you over echo a acceleration NNA last terms year backlog next outlook. mean like of does ago, in . heard today and wanted X, about we've versus or up advisers follow up. And adds picking kind just

Yes.

lever said is headline, the earlier, that think as as contributor in a run longer both continue I growth of from to the and solid to growth we we look, standpoint So and term. a short or driver see recruiting

if We put start look just the at how color explore movement. to When position we typically out environment you ourselves for you. on set with to we So win. I opportunity that the went where adviser little a

last reflect actually movement as would I somewhere over more around flat turnover. it X.X% the year, or it's

from happened and where of independent shift in mix from we slowed movement as more an it sustained up bit down amongst some seen a we've movement the call is haven't been market of movement range of the We move or some has now. a for there's but a the What it's down that has that, where picked the big up the example. seen turnover wires

shift with right, level is look, is I competitively volume us to again, that rates of given mix see movement. challenge compete may of that I models, that regardless think advisers do our point our said, the lower continue for to I of the despite we all That we win we that what try succeed to move. how And spoke diversification the XXX,XXX think And all -- as, of movement. more you do improved neutral for into of of a ourselves

lower churn reason more over back So churn. of those think begins do up to to back believe overcome will number of that We levels that come and we've lots overall they trend time. norm. that, pick the there's towards the

rates well of And win that we -- model, got we I positions so if flexibility model, we've the higher sustain appealing think more can forward. because with better go at think we gotten as us our recruiting matched we've a

talked the some I the again, across is or there changes an it's if organization where time transition. we some because look there elevated movement question, you we in moments at there. may last think seen field changes competitive marketplace in landscape, said, are the what significant strategic about in playing haven't material going the That be through

always try they position get those there a may of bit opportunities when we And to on ourselves over index an gain occur. to

affiliation of the our and different I complement of of sort enterprise of appeal you marketplace. our adviser all look you if term, the nice add over the in growing think if at matched models. strength look that with our pipeline, the mandates you intermediate up bigger of out recruiting The growing

that and recruiting. think good strategy to And model about big give to desire longer professional, our structural or see opportunity feel for from the to to to in demand a I demand us advice where model growing continues for advantages And a advice, then the back matched back for with intermediate tailwind. attractiveness go term, we the short continue we independent of our the we a and our overall really receive financial the feel adviser

we model and really innovating certainly market invest demand to -- to back capitalize differentiate in large us understanding And the for advice think today, it. term that helps. from the to into singular Robust more our take demand have you If is in forward going long but opportunity positions feature and the off commitment ability exists on create current to jump model. our capacity going to on we growing focused leadership independent that platform and that in and hope our

I Yes, Matt, And that's here just a helpful. expenses. on follow-up guess,

the promo missed the quarter. So the first, for guidance is expense third

spend environment there's what know because If XX, I and And G&A, of it's then and about we -- curious So drove at been on the elevated looking we organic higher maintain for for growth? rate longer reasonable that? think so If what of solid Slide you trajectory obviously several not solid the the as about we levels spend is term, a about do these think much G&A to growth just 'XX, think years. organic for growth.

Yes.

I'll -- just promo think the I hit first.

came large those Commerce That's board which factor guide million timing in the highest. $XXX the West in million of a in at onboarding quarter. just the QX, when where to of our million, $XXX think are you enterprise come the expenses of Bank we was range, look expenses. typically for at I the in $XXX had both on We the the quarter really

and is the then bit just work estimate estimate And a got an million, ramped we've for started up onboarding still of integration $XXX our faster. we little Prudential, that which overall

So it's associated of timing with simply the those. expenses

QX. for was I'd think highlight I what that

think support your to we're making and every delivering question, with to and those perhaps think a adjusting and on each spend with plan focus I sure growth, I we drive second your organic operating then macro year, question the leverage. investing mean, I And growth, core overall that G&A on balancing investments I of in levels we're environment. the on think based to making those sure core

that's environment, think spend think is our advisers of And X% the investment success opportunity of be we was that environment. I remember, year like term get doing would value upon that from XX% improve over to in is drivers this I an our X% this capabilities the organic the right? having up XX% think really And of this if our and -- to guidance growth. you I really dependent where to helps about of of we're level we when our of what the that based about to things the So think one that proposition, in year, long that on the growth

back right for to if thinking get you're good this long I And spending you quite I I can we we're a it's So doing what there. just think on, think when decision use we aside think been when amount say, put term, we what that the we're of bucket was the environment a where be think year, and and capital. that's opportunistic

Stanley. from Our coming next Cyprys Michael question be of will Morgan

related expense Maybe just questions. continuing with

We've the in recent made that. to promotional on understand been expense. an support there's seen uptick some Just investments years. I

you order for promotional next that growth out an Should look next underlying should over maintain the in fully we think 'XX? of to all organic on on side, think achieve? we the as I the side about how sort expense And to looking for $XXX the out of think couple called year. run also in rate million we you -- of are growth that onboarding promotional coming Just about about years, guys true of out

Yes. point, it's the Well, It's I the institutions think when on financial institutions last coming you related for drivers, large X to on on things. and those that board. I look at $XXX million Prudential. think really And

Prudential, question, the those So your I weren't away. once onboarded, there be there's ongoing core But I a there think an set, you weren't opportunity expect level think that we board, those about million would wouldn't $XXX meaning unless our amount. or think to have any would that's any on coming large spend on to we specific of go a year others is That if board have of institutions that opportunity. to in expenses coming financial

organic number the the transition it's about the drivers at up we the growth primarily the key overall the the and of that and recruiting. are what organic coming that, shows you of other for There's of that's the our look growth, with promotional amortization of have, associated we size of in right? that institutions on growth amount But and I think assistance have large really board. or outside of growth the -- And enterprises when financial

is Q&A, on substantially board bring capital we're in increased up a that the here. I AUM think talked amount bunch during recruited helps board but shows it about the them the this this call and expense we bringing and that on on of

The board number our amount organic number financial engagement growth, of those other coming conferences spend, firm, large But is of would there naturally of the drivers. get, more our in key based have just at that the is more at on the big we one right? we the rise. bigger with person I'd I extent the would think highlight folks and That's the and to things then institutions much X in smaller advisers a are the conference those level value on just X be of

And just follow-up Great. a question on D&A.

million had of about imagine think capitalized. line. the I investments to platform to $XXX called you out going be D&A I come through that's

for cadence we about Just time to and think that do through? how frame the come

Yes. And that's associated with Prudential well. as

And So no you assistance transition investment. That's of total about reminder, think of that $XXX if Prudential investment. there's a million that. comes the overall along with

we're into be place typical in timing to periods, and comes then that quarter based are across like the typically up amortization X- can deployed. be once zone will which it, some call the technology during on to the a institution. will in So after It that And onboarding, they're financial that. there get mostly be large or you also leading the putting of X-year but

should about Is $XXX through roughly. think coming million fair? that or we So over that years X so,

deployed, it's that. once Yes, following years or Yes. X X

So to a good think that's . I about way it. think

And our Voigt next our KBW. next question of will for from coming question. be One moment Kyle

could you that of the wondering remind one us propose to was And meaningful hear rule. proposal, comply comply vacated. the be prior to expense given about of ultimately ahead kind the rule with implemented DOL investments of needs to already the new that great would any more that the to rule prior potential with made how changes feel were at if point, of environment. DOL of Obviously, this is just on comment It Maybe the level business state just fiduciary shortly. XXXX, today details high the set the some relative rule I to regulatory don't very a sounds new on like already but were have many you

Yes.

in. So let one that take me

released before review as White the And the to know, the public and so is look, at proposal a that's procedural step, under is House of Office And Management the that's you DOL comments. Budget. there proposal

insight not inside there's what's on that. of of a So contained lot

of spectate lot a be. may been there's that what think I to dialogue about

think we more step. as to next we'll But move the I learn

once it occur to which some that is it's and/or believe do we not. comment, ultimately, of changes process, what that through, public from to a that may work long either think proposed I moves

some ultimately down And products rule think and we think -- around example was like public said, innovation did regulation I full -- ultimately good an I didn't mutual as we as as about being pivoted fiduciary so ultimately wasn't had to said, and XXXX funds work considered. utilized back as best even what's That interest. significant you the struck the that XXXX you'll some see a did, in dialogue

different, baseline, innovative lot and think that is as of and a way, we the the -- great serve What will work a I by that did.

out and/or in today some circumstances the we aligned which it as -- Some think think proposes a we're adjust the for of context, with. use well been dialogue in are it has in prepares the the occur we different marketplace And whatever changes years which I a using, rule. the and you around to do think and BI, pivot may bit different. that are do higher not is we for ultimately couple of Reg rule a us itself into standard know, really Reg of BI just we released care,

we think, and standard a lot run establishing relevance has course and to dialogue and And to think of that And that is rule the rule create right in that of care, of effective that the occur. it's SEC regulator of its allowing the all that place, and parts across for is aligning we in consequently, that that retirement that set both non-retirement. the ensure business, because around think will consideration ultimately and higher we

some there harm choice by limiting you big investors and proposals that to go advice think if that away and those ultimately to to the obviously, I think And take access is the back a relevant lot outcome. brokerage not of middle-income [indiscernible] will of you it's accounts, retirement in a XXXX, risk begins a potential be and concern good in I which which outcome [ of ] have would lot big that earning systemically, smaller and a low pushback around

pivot to and open deliver are incrementally, that All [indiscernible] on to choice that. around is and principal we're those review prepared public well think said, and do we add circumstances of between this choice, we we continue this changes investors different sort if always process. another So debate are option to serve and will think there a it's the we believe the just some have and brokerage both advisory, it believe

So we is little point a don't know I yet. you that really hope color. gives The

there we debate, a good is we'll is be think considered, something being and it healthy and that I will well-prepared. be think

Great. succession And then just the on for my follow-up, just liquidity and solutions.

broader that any you're could be that that know frame I that disclosed I time, the relative your internally could You deployed you opening time any comes know now they how capital far? topic solution on second so is size And then curious updated us to from to and guess thoughts part but of offering this way the potentially of give externally. there up externally? meaningful to question, business suite if

Yes.

it and I'll then turn that part to I Matt to to you look, over of me So -- think the let address strategic your ask question. -- capital take

the problem differentiated came certainly a liquidity team did to the of and next advisers great was need, to over ultimately problem challenge. X/X existing relevant of right, appealing look, with XX we with been and that retiring that of on job solving very that that of succession premise a big up solution So solution up potentially a solve the advisers years, same coming LPL creative facing we're a has

made the appealing way we've to then doing to assets, think Because that that we concept take probability to that broadly outside move differentiated to learnings basically have external of the we've in platform. platform. platform, generated sense high the to it it marketplace, internally the to the motivate for that interest some of because outside and be insights around marketplace. potentially had its nature, as because another in those We In interest offer the LPL and then days, us think it's if to and learnings those XX that, be to the going I them would And of just our and to moved we've we've of market our demand offered and to been and it. the

smart to right be it's so. hard learn way data to to capital more a don't But order do a feeling in we We'll to we because and think just that. support in do attract the LPL size of have now enough assets to deployment another platform

to now services at we may how are that's that it learn come of respect have So future more. other that offer outside But that's aside With possibility. More kind the in that as to a strategically. we our I of we about to journey. platform, where least set we as continue think think we

-- continue internally outside portfolio LPL the and We on of to on set number growing see respect LPL opportunity advisers expanding on platform. new with our and platform, that to distribution the solutions versus the of broadening innovating

point of continue want take add advisory our about ask, to at you our think more platform that? think outside that some do it's a near-term to Do supporting as here. focus logically relevant apply could that So I is and question to growing base. services you

Kyle. Yes,

you're ] wouldn't to it recruiting taking externally, I the the mean, as I capital is X think well solution. other any a L&S events. transaction, this taking level see I that as external, There's really succession when of citing than highlight you're doing -- [ headline that the deployment different event

of would will think talked amounts different our on But it capability occurring. about connection would from Dan a is be long-term individual strategic we've It's point growth. those frame capital standpoint the nothing knowing are relatively this that think capital about, is X of that These from I capital things standpoint, an that deployment be be and as level. covering good standpoint before. headline small the deployment from an So than more adviser a about a

today's And Thank this participating. for you concludes conference call.

disconnect. now may You