LPL Financial Reports Monthly Activity for January 2024
- Strong growth in total advisory and brokerage assets to $1.36 trillion.
- Positive net new assets of $2.0 billion in January.
- Client cash balances at $47.3 billion with net buying of $12.0 billion.
- Increase in total advisory assets by 0.7% and brokerage assets by 0.5% compared to December 2023.
- Annualized growth rate of 1.8% for total net new assets in January.
- Annualized growth rate of 3.9% for net new advisory assets.
- Decrease in client cash balances by $1.2 billion compared to December 2023.
- None.
Insights
The reported increase in total advisory and brokerage assets for LPL Financial reflects a modest but positive trajectory in asset accumulation, with a 0.6% month-over-month growth. This uptick, while not substantial, indicates resilience in the face of market fluctuations, as evidenced by the mixed performance of major indices such as the S&P 500 and Russell 2000 during the same period. The growth in advisory assets outpacing that of brokerage assets suggests a trend towards managed accounts, which typically offer higher margins for financial firms.
However, the net new assets growth rate of 1.8% annualized and specifically the 3.9% annualized growth rate for advisory assets, should be scrutinized against industry benchmarks for wealth management firms. These figures can signal the firm's competitive positioning and organic growth potential. The slight decrease in total client cash balances might reflect a shift by clients towards investment assets, potentially in response to the average daily effective Fed Funds rate remaining unchanged, indicating stable interest rate expectations.
When analyzing the market implications of LPL Financial's monthly activity, it's important to consider the broader economic context. The flat Fed Funds rate suggests a steady interest rate environment, which can influence investor behavior. The decrease in client cash balances could indicate a propensity for investors to move away from cash holdings and into investment products, a trend that financial advisors and firms might capitalize on.
The net buying activity of $12 billion signifies strong investment inflows, which could be a result of strategic asset allocation or a bullish outlook from clients and advisors. This level of net buying activity is noteworthy as it may contribute to the firm's transaction-based revenue. It's also essential to assess the impact of net brokerage to advisory conversions, as this could reflect a strategic shift within the firm towards higher-fee-generating advisory services.
From an economic perspective, the report from LPL Financial provides a microcosmic view of investor sentiment and economic activity. The steady growth in assets under management (AUM) despite a decrease in client cash balances could be interpreted as investor confidence in the market's long-term prospects. Additionally, the divergence between the performance of the S&P 500 and the Russell 2000 could indicate a rotation within market sectors or a disparity in performance between large-cap and small-cap stocks.
Moreover, the fact that the Fed Funds rate has not changed is indicative of a stable monetary policy environment. This stability can affect investment strategies and potentially lead to an increase in risk appetite among investors, as evidenced by the reported net buying activity. The economic indicators within the report, such as the AUM growth and net new assets, are critical for understanding the economic health of the wealth management sector and the broader financial services industry.
SAN DIEGO, Feb. 22, 2024 (GLOBE NEWSWIRE) -- LPL Financial LLC (“LPL Financial”), a wholly owned subsidiary of LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”), today released its monthly activity report for January 2024.
Total advisory and brokerage assets at the end of January were
Total net new assets for January were
Total client cash balances at the end of January were
| (End of period $ in billions, unless noted) | January | December | Change | January | Change | |||
| 2024 | 2023 | M/M | 2023 | Y/Y | ||||
| Advisory and Brokerage Assets | ||||||||
| Advisory assets | 740.7 | 735.8 | 0.7 | % | 615.2 | 20.4 | % | |
| Brokerage assets | 621.1 | 618.2 | 0.5 | % | 549.7 | 13.0 | % | |
| Total Advisory and Brokerage Assets | 1,361.8 | 1,354.1 | 0.6 | % | 1,164.9 | 16.9 | % | |
| Total Net New Assets | ||||||||
| Net new advisory assets | 2.4 | 8.1 | n/m | 4.0 | n/m | |||
| Net new brokerage assets | (0.4 | ) | 1.1 | n/m | 4.6 | n/m | ||
| Total Net New Assets | 2.0 | 9.2 | n/m | 8.6 | n/m | |||
| Organic Net New Assets | ||||||||
| Net new organic advisory assets | 2.4 | 8.1 | n/m | 3.1 | n/m | |||
| Net new organic brokerage assets | (0.4 | ) | 1.1 | n/m | 2.2 | n/m | ||
| Total Organic Net New Assets | 2.0 | 9.2 | n/m | 5.4 | n/m | |||
| Net brokerage to advisory conversions | 1.0 | 1.0 | n/m | 0.6 | n/m | |||
| Client Cash Balances | ||||||||
| Insured cash account sweep | 33.7 | 34.5 | (2.3 | %) | 43.5 | (22.5 | %) | |
| Deposit cash account sweep | 8.9 | 9.3 | (4.3 | %) | 10.8 | (17.6 | %) | |
| Total Bank Sweep | 42.6 | 43.8 | (2.7 | %) | 54.3 | (21.5 | %) | |
| Money market sweep | 2.4 | 2.4 | — | % | 2.9 | (17.2 | %) | |
| Total Client Cash Sweep Held by Third Parties | 45.0 | 46.2 | (2.6 | %) | 57.2 | (21.3 | %) | |
| Client cash account | 2.3 | 2.3 | — | % | 2.5 | (8.0 | %) | |
| Total Client Cash Balances | 47.3 | 48.5 | (2.5 | %) | 59.7 | (20.8 | %) | |
| Net buy (sell) activity | 12.0 | 10.8 | n/m | 11.1 | n/m | |||
| Market Drivers | ||||||||
| S&P 500 Index (end of period) | 4,846 | 4,770 | 1.6 | % | 4,077 | 18.9 | % | |
| Russell 2000 Index (end of period) | 1,947 | 2,027 | (3.9 | %) | 1,932 | 0.8 | % | |
| Fed Funds daily effective rate (average bps) | 533 | 533 | — | % | 433 | 23.1 | % | |
For additional information regarding these and other LPL Financial business metrics, please refer to the Company’s most recent earnings announcement, which is available in the quarterly results section of investor.lpl.com.
Contacts
Investor Relations
investor.relations@lplfinancial.com
Media Relations
media.relations@lplfinancial.com
About LPL Financial
LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and enterprises, and not the other way around. Today, LPL is a leader in the markets we serve, serving more than 22,000 financial advisors, including advisors at approximately 1,100 enterprises and at approximately 570 registered investment advisor (“RIA”) firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional. At LPL, independence means that advisors and enterprise leaders have the freedom they deserve to choose the business model, services and technology resources that allow them to run a thriving business. They have the flexibility to do business their way. And they have the freedom to manage their client relationships because they know their clients best. Simply put, we take care of our advisors and enterprises, so they can take care of their clients.
Securities and Advisory services offered through LPL Financial LLC (“LPL Financial”), a registered investment advisor. Member FINRA/SIPC. LPL Financial and its affiliated companies provide financial services only from the United States.
Throughout this communication, the terms “financial advisors” and “advisors” are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.
We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.
FAQ
What were LPL Financial's total advisory and brokerage assets at the end of January 2024?
What was the total net new assets for LPL Financial in January 2024?
How much were the client cash balances at the end of January 2024?
What was the net buying activity for LPL Financial in January 2024?
What was the percentage change in total advisory assets compared to December 2023?
