LPL Financial (LPLA) 30 Apr 242024 Q1 Earnings call transcript

Good afternoon, and thank you for joining the First Quarter 2024 Earnings Conference Call for LPL Financial Holdings Inc.

Joining the call today are the 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 to the questions. The company would appreciate if analysts would limit themselves to 1 question and 1 follow-up, each. The company has 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 financials, future financial and operating results, outlook, business strategies and plans as well as other opportunities and potential risks of management foresees. timing management's and and 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

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

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

For a earnings to company's release comparable reconciliation which can figures, at measures the please be refer the non-GAAP of to found financial investor.lpl.com.

to Arnold. to like call With would turn that, Mr. now over the I

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

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

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

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

to the review of results. trillion was with first as higher continuing solid while growth complemented of quarter strategic these areas, increased by another quarter, plan. to continued markets. $X.X business I'll delivered results both we performance, our equity our to quarter the make assets on progress of respect total organic also starting In our execution With solid

growth. X% This first X% approximately new net an contributed billion XX $XX assets organic growth. ], new past to over representing annualized were net [ Regarding XX% organic assets the organic quarter growth, representing of months

In the enhancements periods institutions. markets. well when quarter, represents which our driven a expanded ongoing as the model [ were large assets billion, our This recruited as first quarterly outcome by recruiting to for record was ] onboarding $XX addressable

sales, remain Looking advisers at on their same-store a care and our differentiated taking delivering of focused clients experience.

the QX. capabilities a result, share the expanding clients we with of enhance new in drove are new clients, same to through and time, that advisers winning and combination in functions. of both wallet the service technology As At our continue existing delivery solid same-store and evolution the experience adviser sales operations our

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

outcomes first financial business results adjusted EPS Our led quarter with solid $X.XX. of to

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

of the the long-term our invest to reminder, to with a as the across throughout help leader the businesses. life Now center become vision into flexibility back adviser and services unprecedented marketplace. that, how deliver affiliate maximize the advisers adviser To in do cycle capabilities can success to Hence, us. provide is strategy our platform

experience, Doing sustainable and this the across a share. well market to gives adviser organic us leadership industry path growth

XXX,XXX advisers positioned Now to strategic such marketplace. X where expand to into advisers attention, organize we to strategy, execute the affiliate horizontal ways the we are look our our in that on categories: we that to institutions work compete and all can

their delivering our where services, and focus and we great operators to marketplace advisers on of in technology businesses. the integration, capabilities, to be differentiate vertical win In help

start let's efforts context, as around horizontal that with with our expansion. And

With to as our of quarterly At offering, models, the we we of these $XX increasing model we our enhanced expect of of over strategic reaching look affiliation capabilities and ongoing ahead, depth the recruiting time, delivered maintained first traditional our to billion marketplace rates and and appeal And and industry-leading increase high a RIA approximately wealth, Now another while billion our our ongoing that sustained saw breadth employee market, quarter, assets. strong our in also the we expanding due new win the the we independent in roughly new $X the assets. enhancements same evolution in our the our respect growth. models in recruiting to go-to-market will awareness a drive approach, of pipeline. solid in the quarter, their

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

make continued And management onboard preparation time, approximately advisory wealth of will to onboard to [ also Collectively, marketplace wealth that we deals same institution continued of the management brokerage its institution at where large the quarter, Prudential of our prior we Finance. the ] announced During to X progress with XXXX. services early will the these billion by Financial we business plan. Wintrust businesses and our $XX retail X assets add

to the organic complement we differentiated also This planned a as technology approximately banks transaction give to will credit advisory advisers approximately acquisition our advisers in managing which unions, billion ]. capabilities, and assets $XXX access announced Solutions, Atria Wealth Atria and service. [ XXX Now our of X,XXX growth, supports of

of close complete to in and transaction conversion We are the mid-XXXX. year the half on this track in the back

we're solid momentum seeing liquidity succession finally, solution. And and for

advisers LPL signed existing with creating build our outside in advisers quarter. our deal also to external with interest while including continues ecosystem, the demand first As

and we the platform businesses. into integration comprehensive investing the differentiate vertical win to and Now run help model within focused technology our a on thriving advisers capabilities, back services that our of in remain marketplace efforts, and

a simpler several enhancing evolving products. body to our operational utilize, our solve and make wealth And platform. including transact including for the and alternative build journey, it across management platform, key we ongoing As custodial of progress within of to a our the including their capabilities focus, nontraditional and effort, of are we these of that investment for needs that easier our are world-class the interest continue focused demand, and reimagining of help manage and for investment clients, advisers areas alternatives work, increasing part this products. To meeting investments making experience end-to-end we

time, And more at the advisers for doubled have of than last expanding available the the to over number utilize. offer, alternative our for product investment products year, same we

efforts within key is continued of enhancement vertical our area of to Another clients. integration the their deliver the advisers experience our

flexibility experience. the plan that of primary One tailor their ways we is increased providing ideal do advisers for and to

platform we designed which our View in-client to For can client-by-client example, on adviser basis. Account a digital features access personalize [ ]

recently cadence which launched digital a a we traditional channel statement. see flexibility information, statement in to in-client increased our also enrich adding clients interactive addition, to provides In further the of the of series experience unique and the that enhancements the delivery

solutions investment. advisers worth and to financial of of integration the vertical the to so, net high And work these as advice businesses. In operators solve be help including depth need, their services and continued on them reminder, delivering for key that and more and broad spectrum more breadth number the a effective a advice spirit, that our needs of we more position catering investors Our personalized services in is area of also help a planning, and institutions a deliver of complex great help doing of are the expand portfolio strategy. of our developing advisers utilization great

we a strong recently, market. which tax demand high is For efforts part introduced more indications planning been our our we net And seeing our analysis Last our enhance worth to have example, as the in year, of net service, capabilities. enrich support our of expanded and investment worth state case early [ their through services clients favorable. adviser ] the aspects to product design, high client and and planning planning

innovation, our feedback, provides by this the of outsourced Investment prospects practices. powered And feel is with them additional advisers personalized part proposition service, and Officer Finally, based their we're LPL services adviser Chief efficiency help our unlocking investment differentiation initial in adviser's expand latest ]. new growth Collectively, Visor win with our of platform. and expertise in on [ increase to the enable our to clients, our these the value new which

every build to businesses to and the needs for of their forward, their maximize themselves, we perfect our will practice for solve move we continue order advisers' them As success. help in at ultimately stage

in and while their In in continued leadership. the first proposition we advisers summary, growth market to clients invest our and value the increasing driving quarter, for

look strategy help to our long-term further focused value. shareholder we remain and marketplace our ahead, differentiate the in on and we result, drive win executing advisers As a as

I'll turn the Matt. call that, over With to

Alright. glad Thank and to call. you, I'm Dan, speak everyone with on

to we quarter businesses and another into growing As delivering we led strong Wintrust. wealth we XXXX, value. and our advisers, onboard the in organic and markets, are our traditional business shareholder remain of preparing both focused and growth focus to management This Prudential move new of on serving our

external an our in including continue deal In solution, liquidity [ with signed and addition, momentum our succession practice we first to ]. build

onboard acquire also to an we in our to Wealth mid-XXXX. platform into Solutions, which We entered Atria to agreement plan

opportunities look to have support continuing in we and ahead, our excited as industry-leading organic So while invest we and by our to proposition we value advisers nearly drive XX,XXX the growth. remain serve

were and by quarter new continued or organic $X.X turn trillion, Total as billion a Total assets results. advisory from rate. assets let's approximately brokerage our Now complemented X% net to annualized QX $XX was first were up margins. organic business higher growth X% growth equity

$XX quarter assets which large were record. prior was institutions Our QX billion, on highest the recruited to

strong our quarter deliver continues, QX, momentum another and we on to ahead are Looking pace recruiting. to of

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

million, commission As a driven payout by from net QX, fees production for higher $XXX the up of advisory modes. fees were and primarily million seasonally lower advisory components, $XX

was to from the production beginning rate the of points year. at Our XX.X%, basis seasonal XXX due QX, the bonus reset payout of down largely the

driven ahead by payout approximately we will the production. to increase to our seasonal rate typical QX, XX.X%, anticipate Looking the build in primarily

client million down cash was it roughly to respect revenue, $X $XXX from million, With QX.

at $X sequentially, were client fees the down flat quarter. balances overall those of to advisory quarter cash paid fees, $XX ended balances, the at by billion, Outside driven during cash Looking QX. they billion

roughly range balances of our As portfolio, ICA XX%, mix target XX%. for to XX% to fixed of within the rate our increased

points at up closely X was more QX. points XXX yield, basis it Looking our basis QX, ICA from in

our QX, our we balances a yield client ICA cash by interest today, for rates basis based to few expect and As on points. are decline

it was service $XXX up for revenue, $X million in and QX. As QX, million from fee

be we ahead Looking revenue flat to expect service sequentially. and QX, to fee roughly

million, million increased volume up was transaction, QX $X to $XX sequentially on slightly. trading as it Moving

we and revenue expect ahead on from million to a As we date, seasonality by to few activity QX. decline typical to levels look QX, would transaction based

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

to For billion year, to the in range [ be core G&A ] a billion. $X.XXX we to full anticipate of continue $X.XXX

prior Prudential with As this expenses to and associated a is reminder, Atria.

due million, expense. Moving $X from for $XXX was costs million on down large to onboarding promotional It QX lower QX institutions. to

approximately by million fourth to increased strong increase Looking ahead large in recruiting in sequentially to Prudential to $XX QX, expect onboarding to resulting we for from as promotional expense institution join transition the assistance due prepare we quarter. us

$X compensation from $XX expense, in Looking million million it at share-based QX, was QX. up

As we anticipate expense look ahead, be level we a at in similar QX. to this

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

amortization million expect by development we QX, for includes to which roughly ahead depreciation Looking technology sequentially, and to $X increase Prudential.

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

ratio was X.Xx QX. leverage flat Our with

reminder, expect of and transaction in plan to of the half combination and of this the close our a As cash Atria through to we a second debt. finance acquisition year

close, leverage the near Xx, midpoint to our target leverage. we of the to continue be expect approximately Following

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

to strong drive to in for we In within liquidity shareholders, paused capital our last of support and $XX succession ensure to invest position, continue QX, M&A across framework growth, we we the return flexible months solution of our of entire and acquisition capital capital repurchasing deployed and repurchases we a shares quarter allocated January. organic and the million Atria. our X as to to share capital closed on We our maintain

capital the half second this will year, evaluate with frame. we expected repurchases existing Following share the in restarting consistent of our close

of strong results. business In delivered another closing, and we quarter financial

about see we investing opportunities As grow forward, excited our serve remain continue our we business to create the advisers, and long-term value. we look to shareholder

the open please With questions. operator, for that, call

Instructions]. [Operator

question first Devin line come JMP. to going from Ryan Citizens Our the is with of

outlook, new more I just really [ a broadly X quarter assets, on assets than about on maybe but want still it wanted asset then a you like bit the also just to quarter, dig a had recruiting net a that I January bit the and recruited digging But sounds that's saw little between question, And up divergence seeing a metrics. a year-over-year, these good pipeline. you're this bit and little maybe dynamic. nice First recruited just really XX% ] stronger trend the to

So little channels and kind of a I newer just you're between that seeing on both legacy channels. love of more to get context affiliation some what the and

Yes.

Devin, So Dan. it's

to try sequential order those in me Let go a helpful. around questions maybe is that

tick me first, just I heard question. which let QX, I maybe organic So inside think, your growth,

So things the expected typically X% posted difference. in in to strong, roughly we And the underlying the that X%. have And see be there during quarter, drove seasonality would growth. quarter that a were we we the organic business more drivers of the given couple of were QX, while the like X%

back as of the to half going the of January's which QX lot impact growth. of the that quarter. happening quarter. gives The onboarding into mentioned, in a the And really roughly I function little second X% recruiting, think, the just of in from organic it some timing a that's first to was And recruiting, we call, you equated a second tailwind

And mentioned last that there that then were our impact thing attrition. departed practices that the quarter X% to in for second January well accounted a acquired which we as X was

experience couple record that ever with adviser for last So categorize pipelines recruiting. that at had ] levels remain of the the noise, that continued we and well attrition and outside were level of as historically bit getting our The the which low where years. underlying of [ drivers we've that's us set year so those was a you the impacts, of consistent the or over strongest that intact rest would of of up

feel we of good see remainder we coming the and out how So of over emerge year. opportunity quarter the that the

really the perhaps new of I we we think And $XX forward, specifically was part second look, think, it recruited had think recruiting billion question. or bit how about I quarter, your you assets. a nice of a -- maybe some, mentioned in going stores

we affiliation at ] You see our driving that we at seen And increasing supportive as and significant certainly And we've growth pipeline time, models. deep I a of the [ same head it's really gives win that market, where all going as addressable forward. rates, year-on-year solid is deep us across that mentioned expanded pipeline we win to conviction that with add to with of have I we're the the committed share opportunity well larger to new as positioned store marketplace, we to that in solid motion advisers And sales think respect continue to large respect them a recruiting. a in you up move when wins with forward. institution sets

a gives [ you then color quarter color little So recruiting hopefully, a that on the ]. the and firm around little

Really Yes, that. of but Dan. just of helpful. a kind this follow-up, interrelated, the all on And economics is just

around at new. just XX% it's is trending it's know So look But the directionally space that's in so the been maybe of is dynamics we and can But around always than the a kind competition of talk positioned continually competitive say, they And or a assistance? with been. I LPL you kind deals a theme economics, up. transition know I recruiting nothing of feel competitive how necessarily of coming transition sequentially, let's those X% growth. transition maybe bit market, you bit up assistance, little like higher about year-over-year. and have little kind the economics

Yes.

Let would on that Matt, think you add helpful. economics and you then be me color any start

always we low higher. set. that's opportunity to historical months start despite how remains XX trend move the relative Adviser to which with movement, around I the about environment, And think rates over certainly, said, hovered That set. the an movement last lower our win overall norms. opportunity those we encouraging look, continue with think to recruiting than right, respect X%, the So the has

I look two, environment, the think we about at competitive then the we participants have when the remained think largely and the same. landscape And

we As when do our ourselves to where as first into evaluate invest as technology the distinguish service. the priorities options priorities they reminder, And for that further around is move. their continue back we advisers are capabilities, to a model. looking potentially and That's

Next you we've in create lastly, assistance different and interesting then changed the is and seen affiliation adviser the for significantly that I to independent good haven't across our how year transition scenario support about well think And we're terms get a especially And over which that the in which rates, models economics, compelling advisers. last time. over of space, pretty of transition. how make feel positioned stable we portfolio ongoing

So given Matt? that, us sustain positions all overall of of remain resonate, want proposition and the ongoing our rates win that to well appeal know to really industry-leading our that, I the value strength add confident of continues anything model don't to market you our share. to and we

I that. joining Devin, a they're have standpoint, is quite I from wouldn't really been just what standpoint decisioning the a I I Dan really while. as And where to point, TA add and capabilities not think a matters stable on, advisers on from rates the said, underscore think firms. on really for

I think in know there, seasonally of the $XX bringing on and numbers. it's driver itself growth it's institutions, in which I the large us more any is board, about the is see which AUM the coming typically quarter follow that's QX, But you prior financial year, for billion lowest I the there. recruited think to the

of TA pretty level So have it's about rates stable. been the recruiting.

Blostein as our question. next the Sachs. to to with one the come Goldman next from going And is of question move moment we Alex line

afternoon, You in guys ] well. liquidity up couple of calls been coming and succession mentioned as it's [ other a times this

continue high terms AUM, do couple to in in over range of And to be to So this terms is maybe be next your maybe the meaningful that size of it? where years? today, of guess, the us targets, to M&A how level organic or single-digit of expect want however which kind you frame set business just for I in growth you

the some start capacity question. there parts and on I'll maybe economics of -- Yes, the of just your Alex,

I offering I can bullish ultimately on we're given compelling on are limitations The the think we and in I standpoint, there think quite think the from solution. do this are year. and deals capacity a of economics number a

the So capacity since practices think date, if I we look what these launched done look we've our how XX board. on bring when since to in at and you you program, at we team

I max the [ in would I XX per year, capacity about probably ]. XX zoom think think to

capital when framework. you the from with aspects So against that a applying then capital our we're put consistent financial M&A standpoint,

here capital zone, $XX Xx small deploy the So million I are they closer million to $XX million in to X deals to $XX say, about the range. relatively towards will would at These it. the EBITDA side skewed of --

the then And in economics the are we effectively firms attractive that when purchase of financially, doubles pretty ROA these them.

the practice. of we'd basis largely if And advisers. the function in zone, reduced the a payout the points be onto XX thick are we basis of So on you're point XX once earning that's

where that's show see up. you So would those economics

So those the are economics.

more it's really or So financially if want I think exciting the but there? may even compelling really think of in strategic maybe this solution. Maybe you jump more I value compelling, Dan, better, is to be

[indiscernible].

think in I people or I'm I hear the call my maybe know could other don't we phone unfortunately. it's sorry, don't Dan, if you, are same.

It user was on my part. error

about Sorry that.

of really entrepreneurial start owner. help a transition next me there variety let XX the create take a compelling of and ours how to as to question bridge that one businesses a to we've as And care we to transition care advisers very while is to ultimately big them, of help of So discussed and in their as potentially options think set of take before, and the marketplace. these in driven practices take over opportunity years. the care or We trying to solve is team, think I their next by retire clients leader the do that really differentiated And elegant advisers many again, X/X are their over. our strategic available way are

success that very it's And given to said, it's late with for in which to Matt advisers. been XX since appealing existing the those our advisers, was we think that exposed spirit, we've as deals it are rolled I roughly possibilities. closed And date. those And in been to out our XXXX, very, --

marketplace solution external of the to that Now solid QX, close we've how their and question the could extended those they we there. the we building quarter fourth transition pipeline mentioned, help type that of do LPL to began how our same fortunate explore we've And big to the in and question were first in to the pretty on platform we are advisers practices. enough got deal as a with

our a I we those have little think generation opportunity this to extend other as assets multidimensional to our another to that the compelling think helping of replicate. differentiated focus a for on see So growth. existing advisers opportunities growth we catalyst A also, drive to it of then advisers and as solution. on And complement hard we for and platform supporting and it's

So external it resonate think we will market. the in

No, Great. very helpful. that's

second question, related, to new of initiatives. So my of guess, I some kind the

over last we ] for in You obviously, competitive months given conversation, guys sort maybe guys obviously post sizable waiting M&A, capacity XX [ a to then ] And should larger integrate it. can [ we're we're super for it, close? player HX bank few deal, part months with pretty of have number this the a And been on call the size. you HX How the of the you as hit ] being next [ channel dynamics as busy that on HX think in there. about have of deals, this then the incremental the

Yes.

we have So ability to the programs I to making these think -- that and them. support sure listen, relative scale and onboarding

and I working since that of BMO on MT larger of institutions, in some XXXX. onboarding ] the we've think fortune [ it is something good been financial the

improved or because institutions going provide we've our so we're Atria And that an a an and growth exceptional deliver guide And that that, principle experience we is are seamless then advisers joining that transition win, it's any spirit, like to ensure to continue approach for our our transition our existing advisers organic a last to platform. continued we operating when a like to disciplined even acquisition and whether initiative, large explore evolve and seasoned gotten successful high-quality run and continue I few We repeatable mentioned, that delivering in and we've we how books sustainable. And automation, years. the use rigor. efficiency we iteration, are established a enhance We over onboarding spirit better all as execute the iterated, of process. lot to efficacy the of outcomes the with each we've

of is part way, I improves important us ways which way onboarding but then do we'll an we help iteration, and a can that and quality certainly go continue in I on work as about the to in market. iterate we we them And and fastest ideas, and it will enhances also but that the at the Now and with do we that which forward to in deliver these. new and pace deliver adopt possible simplest each think continue simpler faster that the think to industry-leading experience new new that know concepts, deliver

sort we to that's capacity of support So the ongoing context think that of increasing how opportunity. the about

question, second remind what it and your was? -- then me think I

Sorry.

channel there integrate positioning your now bank's guys competitive a sizable obviously Just channel, them presence Atria, the the in after eventually that channel have in and institutions are you under more umbrella? with there, you player

Yes.

into cluster think So just growing significant our of set establish we that an their took began we or profile back it make sort to then really when onboarding that terms or working disadvantage and as us we've the history share that support a experience help where to of change novel from can we programs practice ] and capability enhance the clients. their XXXX and concept marketplace advantage their this value increase the opportunity in resonates of that a in IP with with of share But risk new and of of that evolve create to ultimately performance effort. how [ and line service we distinctive to these to continuing marketplace or that and in operational And we marketplace support and around the this ultimately, the complex at sure go to offer through think the [ around scalability we having results ] operating those management them out developing financial then to a do have market again, clients If I seen with management, them and advantage programs very a serve any better growth. prospective efficiency emerging can as gives clients. and within business proposition then

great our [ perspective about that positioning have insights we value think if had I hard marketplace, experience proposition so in the we've enriched the do that that you bringing and from been feel hadn't ]. it's So doing forward our to again, the

think about ongoing interesting it's We an durable pretty think and that I opportunity. So leadership. growth

one I And question. you. as Thank to moment on move our next

Our next question of Research. line is come Steven Chubak Wolfe with from the

cadence, externally as through? to for that ratio the liquidity rate guide should higher payout we accretion hoping So how to see and start really those been you just has this some year-on-year to to that XQ given you discussion. the starts with to expect speak succession I adviser And I the payout alluded the when some contemplating? just launched wanted reductions Matt, we be come the on of limitations a that succession was pace of follow-up liquidity on the and could of in deployment. But should

I think you on, when the the the XX so look at I a on. based seeing just But point, far. think done think on we've it already that right? handful deals payout you're payout, so on last I of going rate there's within things

payout last looked year as had you point eliminate QX, QX kind of the And build. to kind just a for production payout rate of just reminder, maybe, So year-over-year a seasonal basis so catch-up if XX for at onetimer.

So overall, payout was flat year-over-year.

drove little bit. up there out that there are a things in And actually X

economics When you're TA grow you're line the things, lower channel I is business [ first that has going see margins think quite to through rates. kind to to lower the as the But at like talking compelling. ] [ bottom of half also ] payout and higher institutional which average, much the a was much in institutions you on had just cost The a that you building rate, Dan the serve, down grows. pet get if than just looking what growth channel,

then And on first had investments We year, had pricing effect or this platform. advisory some those quarter. corporate announced our pricing on the last reductions we took

things had pay up. then that. So out succession offset But and that those drive liquidity payout bias X down did to

of to moving you that absolutely not up over there, to see quarter-to-quarter the are the given but there Maybe our payout in just that overall starting on individual So in time. rate. parts go are you an are business, size starting see but

sure on not point, think I and we're doing that. specifically the capacity

we're the deals if it's to up all you strategic follow make at sure describing not in in those internal process teams, per think and onboard field it. you on that. proper the where whether overall, sure a putting that with XX XX just when just really place, bringing maybe value So a through earlier. or hitting management look these make think the year the way the external, we're I to board associated delivers comes really that was from That's complexities we're that to Dan But

significant given and book? the that's reinvestment, next cash fixed-rate Really follow-up, contracts And get contracts, that renewed all a see X expect the basis stabilization? are to to $X just in quarters. believe, signs coming to around going be going on to renewed contracts of billion those helpful point we rate of that I And should fixed XXX Where fixed levels are back we relative that starting cash given roughly question my number color, Matt. just for due, over expectations some

in where think range, we center that I I the range, XX% XX% mean think that to I the we of on to is plans being like renew, now. are which Yes.

cash a be that. plans balance So XX%, we'll would But our to to assumption I assume judgments with a think renew. at and make being decisions it's I stable think fair about and

When the maturities, maybe at go are the to too next not basis points quarter, specifically $X just those right at have of of towards out, to you maturities far end quarter so look, look are that and billion now. XXX next

X- that of look the a X-year And would place kind where they're So typically we average at below where to marketplace is. if you year. in that range,

where I think place is range assume the can those. in point today's market, XXX in basis we you

now, right that end where mid-XXs can from points So course, $X QX be and on now of ] XXX you'd going of the basis things billion. the to between sitting up move we're [

question. we as from question our Morgan the with going is move And one to line moment of Stanley. to Cyprys Michael our next on And next come

Maybe back just to the circling channel. enterprise

I'm differs pipeline from there couple be you've speak time? the then the of talk how customized Pru, You of hoping a on done I little could over channels over And with Pru enterprise markets and you bit you set have [ a able how had a how capability Pru you you've platform years. broadly the the bit was about to hoping on mandates, the that built and what just that that. platform, more are conversations evolving. lot ] other could maybe little guys those might past new success sort or clients other into for just to take of for

Yes.

from a we've with the series opportunity it to -- in of to success years the space. from and a marketplace. the clients on that certainly reinforces we batter's of provide an trillion financial bank those box opportunities standpoint, the had that in established a features, capabilities So ongoing success swings [ having the the That's opportunity and us those other helps think an thus bank platform respect institution of with are large performance can model Obviously, $X them bringing new I solutions number on in continued or those what's institutions space. a ] in pipeline, dialogues a the have value within about and

we're opportunities there, remain of that that a we're the number and encouraged marketplace. so of in having dialogue And out the part there's by

in ] and outsourcing number created outsourcing, a available then the the expanded Prudential solution opportunity are where exploring the nature audit owned in of or We similar think that [ to specifically manufacturers possibility companies operated and And dive have of that that's right? think also that wealth win of market to I certainly with management dialogues insurance a wasn't include And of companies. marketplace. to part in I by the always an that kind solutions certainly Pru, with are

that so approach And ]. cycle large sales consultative [ and urge longer longer sort a to iterative of

dialogue by encouraged we're emerging the having are discussions the in markets. We for and that

your got I question. first

Your again, ask one, please? second

opportunities conversations. over around take second part then part that and to the pipeline first to and or time. And channels other for platform single-built was was just the new the ] [ Sorry, elsewhere mandates the just Pru markets on

you. Thank Yes.

Sorry.

one. answered I So the I first think

the exploring the the interesting on in X with marketplace about to that of second in that think respect today. somewhat the to So relative opportunity are some capabilities thinking applications of was novel solving I what for we're part half, Pru, that that and think are I creating

our to manufacturer of of platform LPL the one products experience. The is in will the the suite that audit first and a single enable exist expansion

concept an to again, you product across element insurance, in entire for thing of would think I that. hypothesis a your this that that's if that can where get we're relative of lot a differentiator a a be as really really and solution kind a novel to be in, for really folks wow, important seamless a offering And that set thinking, integrated interesting inside and solving opportunity you of about think example, solve

do again, really valuable that. institutions that. can So larger value about different might to of that any that be we're you other that, And encouraged number once

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again, prospects. I interesting are potential differentiating really, X hope to So ] we other helps. and but think just are applicable I think those also them [ applications that

question, follow-up could, on I just if cash. Just a client

and with a out historical. realize just hood trends Just curious in look behavioral versus bit the at But client today when allocation that terms macro there's as ]? rate to parent think seeing a analyzing look you or that is anything of different here, be [ to relative certain historical, helpful environment would allocations now you're cash terms underlying under you what behavior, you her in curious going kind the account, the you're cash cash if of the out customer from lower of I of seeing there

think mean, can I in I Michael, -- it metrics. yes, our think is -- the headline you and I see

Look that just just quite I deployment quarter. X% seen by category at above remained results think down balances now, QX largely the stability full cash and of coming of right? fees in zone, in we've time in some near the kind for

So that the I could go, where I history you're to full you're think where guide. And deployment. I from place is best starting an think to really get at environment and things think standpoint,

behavior I place high, deployed are markets equity seen they're think environments ] fully of are Interest think rates [ that see That come defensive would right? that, we're a they're like the in deploy, doesn't in think of a up, moment, balances that, I dynamic the cash when And to the the seen and the I again. market. And time that the time are where we clients and but of course, full back you where are feel is position, more to I think expect rising. in we've opposite continue. we've that's in

pretty quarter in opposed fees I'd said, so. the being things as seeing and is coming just cash marketplace gotten or where for that deployment are stable down has paying All to stability emphasize, the really we last like things in that

our question. as moment from question move we the our going with come Jefferies. Dan And on is One Fannon of line next to next to

to that factors months year you and towards Matt, or -- we're for you're end think your get based you there the trends. now where that get the current are talk low tracking in, of X could was high us or of growth upon this something kind you the going to G&A

think zone. mean you from low just when to annualized something that think similar you the rate, Yes. at look quarter, first ahead I QX a I look an of end it, probably we're I in at would guidance. And be right, when the

tracking guidance that our think we I So we're overall. good -- towards are we feel

to within move or variable is the growth, that be the organic about that think range year we years, things or drive, cost, that are during the similar in things really with of variable our associated prior levels it us I see that that compensation, which opportunities growth. the that can more whether costs

impact on I with that. But feel the extent we is And Pru that that of those give updates prior core Atria within give that year expenses we'll zone. landing reminder, the is The to we the later G&A, is, a to and good. just associated and comfortable headline feel headline would in

Understood. were was updated previously? about rule. week. the then, got Dan, it proposal changes some around to provide thinking could you you I the full thoughts DOL Any last you and Obviously, we hoping And what said how

Yes.

original transition the probably release. with ] investors. the in last that with look, rules for the final think believe better firms So be which rule you and have as is scheduled as for specified the Reg [ generally is period September, good since from the thing SEC's ] proposal to a conduct fiduciary although BI, a headline And to you comply there compacted I said, ] of [ seen is aligns established acknowledge week and X-year over a the [ the But is reflects changes hot topic we standards.

and such you compliance probably around line made in programs or getting place that responsibilities. So a long-winded so. in build required probably way a in new time can need be your year that's say any to There's changes to that

to our effective and ability effective framework the did BI. -- good that team the is And We're thus the we design done finalize able far. framework preparation our that again, ultimately said, we've execute about dates that XXXX, we work wasn't working program. to of That the to compliance feel in already in and and of implementation some connected addition which leverage seen we've some implemented, the work Reg around to

solutions, we can we'll a the to So us. there areas around at rollovers deploy approaches and where new few again, have solvable time, come, they're same are like for

as be back we in could potentially any with other successful all litigation impact both safe that in of will it's there rule we to that XXXX, case a said, there stake to assume approach was time challenging that that the litigation response compliance All saw the the line. the

spot think but we a draw better that, we it landing on do out than So originally. was

our And moment our Cowen. next to line as Bill TD And we with the has one question next of on move come Katz question. from

Matt, adjust your moment. forward and [ looking that ] I that cash no AUM an cyclicality So we a until of strident client rates just be of for a assume X% change of appreciate using longer extent base, cash billings. But follow sort the of core curve flatter longer current comments, use there's that allocation on sort from as think coming I I sort if of here, some and interest back models? to of To apply the and growth here rate sort more against of even of a Should X% thinking a this. scenario we -- just we the your for

Well, I think you model walking your there, through Bill.

cash is I environment in I market, same, the you're remains assuming think if the point deployed the assumption. it's think fully think the assuming is I headline

grow, I you're think growth the that we does cash. -- point making I continue to with is think the come

kind manage where and nature, we think as is getting So I withdrawals cash the resistance to point or it, X% modeling got natural you of when certain think I versus things the of that the good to to we are of look a at down when I levels paying that the just of think [ maybe a that in bottom line, get of certainly that fees, we from that you facilitating you're are. a and ] to amount fees the you've AUM, when a low cash friction pay balancing, below look percent way to at have down going

growth, levels think that and that certainly sense you would confirm. with comes be cash along there's was what you're were trying I us, probing, those to makes but if where So what to that's

And X clarification question. then That's Okay. helpful. X just and

I'm that down on the of rates almost couple gross and you're the Fed variable side. the And just reinvestment You getting mentioned basis your might a guess, favorable on more points yield quarter-on-quarter. fund spread I surprised high ICA given be

gross points going that ratchet in look like? perspective, the larger have takes a a about, allocation. profit started you about XX talk [ think maybe ROA, basis the up the congrats I explain just maybe just one, you that that is that. side? so just getting ]. saw [ you I understand Can But Labor's sources from success and lower of liquidity you Department you [ of little size and if that the incremental can and bit not on ] of as one, some that. ] broader secured to then question on highlighted opportunity, ] sort What's the Maybe So on first puts same transactions the Dan, slow liquidity you're And the but why you enterprise of deployment, [

with part Well, one of there. your I'll right. question start simple All

the on I think the ICA yield, just timing.

would very the So maturity I that quarter. fixed-rate reinvest the decline comes at quarter-over-quarter, at think look at end I think to we when of you from XXX, the basis the XXX points that

if So at the look just moment. you where at cash balances are

variable of would ones. have those movement a just You

I So that the end quarter. I at the truly of maturity, think point is hit that just would coming the

So talk you'll see marketplace through, they're the now. that benefit we in the that at rates pull right through it in comes assuming

through quarter. third come that see You in the

there and the I'll comment think a give Dan. economics, turn maybe just it I over then L&S on to

I pure to it. think decisions -- not about allocation put it's necessarily capital on where it's

you financial want the our of And it's transaction about really to to that marks leads and the in it them think that's them the for in really choice. succession these and And on thoughtful itself. on hits think to I to benefits maybe year, helpful of very some platform add Dan if a what our doing a finding advisers that I XX works and anything way just thoughts strategic XX know is the a that. as offering in of opposed don't capacity has I to

Yes.

think cases, So succession Again, advisers. is maybe for for has it Bill, of innovation the what goes the to in for driven many these back that opportunity need try that proliferation in speaking And I the to, area you solve of we're size it. to solving were given to the set.

would of the be them over total if in set. advisers so there's it's opportunity X/X years, -- the a And to XXX,XXX marketplace XX and that next retire going are

could now, be these I we through administrative lost it practices [ targeted to transactions been a do complex think, work because it. have just process ] larger transactions, for for

say next it's it's so as fair not the set. retiring then in are the to years probably And XX all opportunity XXX,XXX that

to that highly and of then successful and and folks easier deals up. it And in these involves see way, everyone administrative then around the strength think That And I these learns as how said, allow up learn as again, over certainly that. you'll to marketplace constraint go capacity how get go will do the these will the work firms constraint will number to a in iterates that to do on that sizes increased do complexity time.

the that proposition transition so them and we think, the that of and succession time, in enable transition built I delivering sure think we and the are we over affiliation as And over. think support value thus who least effective in plan we period models and to compelling value us of employee opportunity X-year really is, of make that a these have we're about way. being we've a at in lot do the served And folks an a set how context about they capacity the how serve once capabilities and as LPL our of that of part to that efficient that's

where of building that we X capabilities. scale didn't X have those years we we or experience so the And can in if have couldn't

own again, deals, explore do good their it's think that models. is I to those administrative efficient a and has folks some that so for get these are that trying again, more we It's for work anyone traditional business, compelling doing success scale just to them. for outcome the employee-based And relevant transition think, front-end and independent that's it's how We on for relevant business opportunity create in just operational that up.

a suspect business again, the start to leverage to got infrastructure, But we'll at good industry, head and the innovate a is and it. get big the have in it a So all competition relevant better scale. I continue and across because solve. think we'll we opportunity to relevant out problem better across sorry, we've it's which and a think -- marketplace I good and

to move Barclays. our question. we Budish the to is as going come of our with next line on moment one And question from Benjamin And last

update more holistically. about follow-up maybe on but I wanted more levels, asking April to first the maybe, cash X

sounds it taxes, of your So new in variable and you at continues in the timing of decline payments with piece pipeline. sound net like adviser seeing given the Any comment terms month April, the about end to in you an can on you're color optimistic the of there terms perhaps quite moving sort but give cash, on of also April, assets recruiting end. almost is of what in cash

mean, headline would seasonality of you Yes, we've in I ]. in on see of given think that But I'd that bit give April, what got at a hinted you you the shaping bet. more expect, on your X especially see [ to day question the I data April. up, better than you you it's

about reduces starting that April typically taxes, first, first The paid right, X by That reduces That So are in billion. in month get your hit April, obviously, cash QX. second taxes cash the April. advisory client factors to ] fees. us quarter, is [ seasonal billion. the first the of for by come then on do factor the $X.X balances. primarily month cash $X.XX about And first Those of out being point,

So decline cash all a those sweep together, in month. seasonal factors would $X billion drive X equal for the nearly of

have $X over stability balances on But grow factors, seen cash the point we by outside to billion. actually

point is you to outside X% April. -- the we a growth standpoint. well to balances on continuing ramp which strength So now. from of you net for down billion a organic growth. where X% $X.X month that We're zone factor we had sit and to out, of it just organic right are cash to a recruiting your all the We're then levels in And have as in April that that's seeing That Those the into about April $X or year of hit as same that see -- NNA month continue billion that, dynamics, reminder, talked the when advisory come taxes in the about would as X%. reduce in April. we've April by the strength the fees of in see But month QX. that typically about would the do month slowest of growth from and NNA we've

for a solid quarter. that So at it's think month, start to X% I X% to the

my follow-up. Great. And then

bit specific increase Pru the a I indicated you prudential Just in ]. you X terms can step-up are for in ] QX QX, of expecting related the that's expenses, much questions. the the little [ guess, QX? guess in One, I how was And unpack in expenses? versus then much [ how you promotional

be us coming can Prudential Atria, with like, And Prudential, just you over there ramping then at expenses off Presumably, there's level, say, understand high kind M&A a of are I happens promo but separate we Atria, the next, spend, walk year, up. through what should and TA, for

are growth over that you thinking quarters? in say, the how the line So about X let

Yes.

a Pru. Matt, You had we when and at a why bit the of It's It's we low bet. up promotional in related related to really bit is I to about by better little little in why promo-related next QX. of of think $XX the you QX We'd spend than guided quarter reason came specific and million a million. Pru, shifting a actually to had timing $XX about look million $XX in expense expected Pru range.

X first the recruited I QX prior the think level large what's that with right? on have AUM of up look recruited and I about platform earlier a But key into that bit platform, the a factors when at The you institutions. that And growth, the and financial we record stable. that momentum you on from Pru will really in to good in X, the going had rates comes look specifically going going reason on when little like we primarily at is amount driver of to the promotional of there's this your we talked to it's be with really TA for specific expense organic pieces QX good the year think full promotional feel call, year. recruiting get assets coming very the a a that. QX, the think year I'll drive I overall Pru or to question

line is the So is table and conference, that in with item other firm. The the our the size right? really of

really the importantly advisers. and that get are where our we the with we We conferences of firm. connect Our scale with valuable, size together. They're would

that technology bit $XXX wouldn't quarter. so through first your and question Dan And to But in is what really the the integration we is $XXX $XX over little then of incurred up reminder, impact million million then on We've that Prudential other costs. gave onboarding overall, on. them as of Prudential, deal a really a this on that just earlier. spend And little $XXX a That's in year. spend color in lastly, estimate far promotional. Prudential, to deploy million for of Atria million bring shows

remainder the So $XX $XX million remaining that come to the in primarily million this of year. through will

on you are drivers. And hopefully, of itself. double gives click So the little Prudential those a a that bit

hand Dan Thank you. would And back I to Arnold to now conference for remarks. the closing any like

with everyone you just the us afternoon, to again next time this quarter. join for making and we thank I to Yes. look to want forward speaking

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

may now disconnect. You