LPL Financial (LPLA) Records Sequential Fall in October Metrics
LPL Financial's LPLA total brokerage and advisory assets were $1.22 trillion at the end of October 2023, decreasing 1.5% from the prior month but rising 12.2% year over year. The sequential fall in asset balance was primarily due to relatively weak market performance.
Of LPLA’s total assets, brokerage assets were $565.8 billion, and advisory assets amounted to $653.6 billion. Brokerage assets were down 1.7% from September 2023 but up 9.4% year over year. Advisory assets fell 1.4% from the prior month but rose 14.8% from October 2022.
Total net new assets (NNAs) were $7.2 billion in the reported month. NNAs were $9.1 billion and $4 billion in September 2023 and October 2022, respectively.
The company reported $46.9 billion of total client cash balance, down 0.8% from September 2023 and 28.1% from October 2022. Of the total balance, $33.5 billion was insured cash and $9 billion was deposit cash, while the remaining was money-market and client-cash balance.
LPL Financial’s recruiting efforts and solid advisor productivity will likely keep supporting advisory revenues. The company is expected to keep expanding through strategic buyouts with a robust balance sheet position. However, the challenging operating backdrop remains a major near-term headwind.
Over the past six months, shares of LPLA have gained 12.3% compared with the industry’s growth of 2.2%.
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LPLA currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Competitive Landscape
A couple of other brokerage firms that have come out with monthly data for October are Interactive Brokers Group IBKR and Charles Schwab SCHW.
Interactive Brokers’ Electronic Brokerage segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported an increase in client Daily Average Revenue Trades (DARTs) on a sequential basis in October 2023.
For IBKR, total client DARTs were 1,934,000, which grew 8% from September 2023.
Schwab released its monthly activity report for October 2023. Due to temporary attrition of TD Ameritrade clients and advisors as well as delayed tax disbursements by clients in some states like California, the company’s core NNAs of $11.3 billion plunged 58% from the previous month and 73% from a year ago.
SCHW’s total client assets in October 2023 were $7.65 trillion, down 2% from September 2023 but up 9% from October 2022. Client assets receiving ongoing advisory services were $3.9 trillion, down 2% from the prior month but up 9% year over year.
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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
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LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report
