LPL Financial Reports Monthly Activity for July 2024

Rhea-AI Summary

LPL Financial (Nasdaq: LPLA) released its monthly activity report for July 2024, showing strong growth in assets and net new assets. Total advisory and brokerage assets reached $1.53 trillion, a 2.1% increase from June. Total net new assets were $9.0 billion, representing a 7.2% annualized growth rate. Excluding off-boarded assets, the growth rate was 7.7%. Net new advisory assets were $6.8 billion, with a 9.8% annualized growth rate. Client cash balances remained stable at $44.0 billion. The report also highlighted $12.9 billion in net buying activity for July.

Positive

• Total advisory and brokerage assets increased by 2.1% to $1.53 trillion
• Total net new assets of $9.0 billion, representing a 7.2% annualized growth rate
• Net new advisory assets of $6.8 billion, with a 9.8% annualized growth rate
• Strong net buying activity of $12.9 billion in July

Negative

• Client cash balances decreased by 8.9% year-over-year to $44.0 billion
• $0.6 billion of assets off-boarded due to separation from misaligned large OSJs

Insights

Financial Analyst

LPL Financial's July 2024 report shows robust growth, with total advisory and brokerage assets reaching $1.53 trillion, a 2.1% increase from June. The $9.0 billion in total net new assets represents a 7.2% annualized growth rate, or 7.7% when excluding planned separations. Advisory assets grew at an impressive 9.8% annualized rate, or 10.6% adjusted.

The $12.9 billion in net buying activity indicates strong investor confidence. However, client cash balances remained flat at $44.0 billion, suggesting a potential shift towards investments. The 20.3% year-over-year increase in the S&P 500 likely contributed to asset growth, but LPL's 19.6% total asset growth shows they're keeping pace with the market.

Overall, these figures reflect LPL's ability to attract and retain assets in a competitive market, positioning them well for continued growth.

Market Research Analyst

LPL's performance should be viewed in the context of broader market trends. The 10.1% monthly jump in the Russell 2000 Index suggests a surge in small-cap stocks, which could be driving some of LPL's growth. This outperformance compared to the S&P 500's 1.1% monthly gain indicates a potential shift in investor sentiment towards smaller companies.

The unchanged Federal Funds rate at 533 bps suggests a stable interest rate environment, which typically favors financial services firms. However, the 11.4% year-over-year decline in insured cash account sweep balances might indicate clients seeking higher yields elsewhere or increased investment activity.

LPL's ability to grow net new assets amid these market conditions demonstrates strong competitive positioning and effective client retention strategies. The firm's focus on advisor independence appears to be resonating in the current market landscape.

SAN DIEGO, Aug. 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 July 2024.

Total advisory and brokerage assets at the end of July were $1.53 trillion, an increase of $31.5 billion, or 2.1%, compared to the end of June 2024.

Total net new assets for July were $9.0 billion, translating to a 7.2% annualized growth rate. This included $0.6 billion of assets that off-boarded as part of the previously disclosed planned separation from misaligned large OSJs. Excluding these assets, total net new assets were $9.5 billion, translating to a 7.7% annualized growth rate.

Total net new advisory assets were $6.8 billion, translating to a 9.8% annualized growth rate. Excluding the off-boarded assets from misaligned large OSJs, total net new advisory assets were $7.3 billion, translating to a 10.6% annualized growth rate.

Total client cash balances at the end of July were $44.0 billion, unchanged compared to the end of June 2024. Net buying in July was $12.9 billion.

(End of period $ in billions, unless noted)	July		June		Change		July		Change
	2024		2024		M/M		2023		Y/Y
Advisory and Brokerage Assets
Advisory assets	850.6		829.1		2.6	%	684.4		24.3	%
Brokerage assets	678.7		668.7		1.5	%	594.0		14.3	%
Total Advisory and Brokerage Assets	1,529.3		1,497.8		2.1	%	1,278.4		19.6	%
Total Net New Assets
Net new advisory assets	6.8		9.2		n/m		7.7		n/m
Net new brokerage assets	2.2		1.6		n/m		3.4		n/m
Total Net New Assets	9.0		10.8		n/m		11.0		n/m
Organic Net New Assets
Net new organic advisory assets	6.8		9.2		n/m		7.7		n/m
Net new organic brokerage assets	2.2		1.6		n/m		3.4		n/m
Total Organic Net New Assets	9.0		10.8		n/m		11.0		n/m
Net brokerage to advisory conversions	1.0		1.2		n/m		0.9		n/m
Client Cash Balances
Insured cash account sweep	31.1		31.0		0.3	%	35.1		(11.4	%)
Deposit cash account sweep	9.1		9.2		(1.1	%)	9.1		—	%
Total Bank Sweep	40.2		40.2		—	%	44.3		(9.3	%)
Money market sweep	2.3		2.3		—	%	2.4		(4.2	%)
Total Client Cash Sweep Held by Third Parties	42.5		42.5		—	%	46.6		(8.8	%)
Client cash account(1)	1.5		1.5		—	%	1.6		(6.3	%)
Total Client Cash Balances	44.0		44.0		—	%	48.3		(8.9	%)
Net buy (sell) activity	12.9		12.1		n/m		11.6		n/m
Note: Totals may not foot due to rounding. (1) During the first quarter of 2024, the Company updated its definition of client cash account balances to exclude other client payables. Prior period disclosures have been updated to reflect this change as applicable.
Market Drivers
S&P 500 Index (end of period)	5,522		5,460		1.1	%	4,589		20.3	%
Russell 2000 Index (end of period)	2,254		2,048		10.1	%	2,003		12.5	%
Fed Funds daily effective rate (average bps)	533		533		—	%	512		4.1	%

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 institutions, and not the other way around. Today, LPL is a leader in the markets we serve, serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 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 institution 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 institutions, 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 was LPL Financial's total advisory and brokerage assets for July 2024?

LPL Financial's total advisory and brokerage assets for July 2024 were $1.53 trillion, an increase of $31.5 billion or 2.1% compared to June 2024.

How much were LPL Financial's total net new assets in July 2024?

LPL Financial's total net new assets in July 2024 were $9.0 billion, translating to a 7.2% annualized growth rate.

What was the value of net buying activity for LPL Financial (LPLA) in July 2024?

The net buying activity for LPL Financial (LPLA) in July 2024 was $12.9 billion.

How did LPL Financial's client cash balances change in July 2024 compared to June 2024?

LPL Financial's client cash balances remained unchanged at $44.0 billion in July 2024 compared to June 2024.