LPL Financial Reports Monthly Activity for May 2024
LPL Financial Holdings Inc. (Nasdaq: LPLA) reported its monthly activity for May 2024. Total advisory and brokerage assets reached $1.46 trillion, a 3.6% increase from April 2024. Net new assets for May were $11.2 billion, reflecting a 9.5% annualized growth rate. Net new advisory assets were $9.9 billion, translating to an impressive 15.3% annualized growth rate. However, total client cash balances fell by $1.2 billion to $44.5 billion. Notably, net buying activity hit a record $15 billion for the month. The report also highlighted significant market drivers, including a 4.8% rise in the S&P 500 Index and a 4.9% rise in the Russell 2000 Index.
- Total advisory and brokerage assets increased by 3.6% to $1.46 trillion.
- Net new assets for May were $11.2 billion, reflecting a 9.5% annualized growth rate.
- Net new advisory assets were $9.9 billion, translating to a 15.3% annualized growth rate.
- Net buying activity reached a record $15 billion.
- Total client cash balances decreased by $1.2 billion to $44.5 billion.
Insights
May 2024 activity report from LPL Financial reveals some notable trends that are critical for investors to understand. Total advisory and brokerage assets increased by
Understanding the shifts in client cash balances, which decreased by $1.2 billion, is crucial. With net buying activity at a record $15.0 billion, this suggests investors are moving cash into investments, potentially driven by continued market optimism as seen by the S&P 500 and Russell 2000 index increases of
The decline in total client cash balances could be interpreted as a positive sign of confidence among clients, but the decrease in insured cash account sweeps by
Investors should weigh these asset growth trends against the broader economic conditions and market performance. LPL's ability to grow advisory assets at a higher rate than brokerage assets highlights the firm's emphasis on advisory services, which typically provide more stable revenue streams due to fee-based models.
LPL Financial's performance in May 2024 can be contextualized by the broader market movements. The S&P 500 and Russell 2000 indices both posted significant gains of
This correlation suggests that LPL's asset growth is in part due to favorable market conditions, rather than solely organic asset accumulation. It’s vital to consider that asset growth might slow if market conditions deteriorate. However, LPL's investment in advisory services provides a buffer, as these services attract clients seeking professional financial advice, thereby supporting asset stability.
The record net buying of $15.0 billion also highlights a positive investor sentiment, likely influenced by the strong market performance. Investors appear to be leveraging the period's market gains, indicating confidence in sustained market growth. However, the decline in cash balances does raise some concerns about liquidity and the capacity to respond to potential market downturns.
Retail investors should consider these factors when evaluating LPL Financial's future performance. The dependency on market conditions for asset growth carries inherent risks, but the strong advisory segment growth provides a stable revenue base.
SAN DIEGO, June 20, 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 May 2024.
Total advisory and brokerage assets at the end of May were
Total net new assets for May were
Total client cash balances at the end of May were
| (End of period $ in billions, unless noted) | May | April | Change | May | Change | |||||
| 2024 | 2024 | M/M | 2023 | Y/Y | ||||||
| Advisory and Brokerage Assets | ||||||||||
| Advisory assets | 809.4 | 775.5 | 4.4 | % | 629.8 | 28.5 | % | |||
| Brokerage assets | 655.0 | 637.5 | 2.7 | % | 560.2 | 16.9 | % | |||
| Total Advisory and Brokerage Assets | 1,464.4 | 1,413.0 | 3.6 | % | 1,190.0 | 23.1 | % | |||
| Total Net New Assets | ||||||||||
| Net new advisory assets | 9.9 | 7.6 | n/m | 7.0 | n/m | |||||
| Net new brokerage assets | 1.3 | 4.3 | n/m | 1.2 | n/m | |||||
| Total Net New Assets | 11.2 | 12.0 | n/m | 8.1 | n/m | |||||
| Organic Net New Assets | ||||||||||
| Net new organic advisory assets | 9.9 | 7.4 | n/m | 7.0 | n/m | |||||
| Net new organic brokerage assets | 1.3 | (0.4 | ) | n/m | 1.2 | n/m | ||||
| Total Organic Net New Assets | 11.2 | 7.0 | n/m | 8.1 | n/m | |||||
| Net brokerage to advisory conversions | 1.2 | 1.2 | n/m | 0.7 | n/m | |||||
| Client Cash Balances | ||||||||||
| Insured cash account sweep | 31.8 | 32.5 | (2.2 | %) | 36.5 | (12.9 | %) | |||
| Deposit cash account sweep | 9.0 | 9.1 | (1.1 | %) | 9.7 | (7.2 | %) | |||
| Total Bank Sweep | 40.8 | 41.6 | (1.9 | %) | 46.2 | (11.7 | %) | |||
| Money market sweep | 2.3 | 2.3 | — | % | 2.5 | (8.0 | %) | |||
| Total Client Cash Sweep Held by Third Parties | 43.1 | 43.8 | (1.6 | %) | 48.7 | (11.5 | %) | |||
| Client cash account(1) | 1.3 | 1.9 | (31.6 | %) | 1.4 | (7.1 | %) | |||
| Total Client Cash Balances | 44.5 | 45.7 | (2.6 | %) | 50.1 | (11.2 | %) | |||
| Net buy (sell) activity | 15.0 | 12.3 | n/m | 9.5 | 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) | 5,278 | 5,036 | 4.8 | % | 4,180 | 26.3 | % | |||
| Russell 2000 Index (end of period) | 2,070 | 1,974 | 4.9 | % | 1,750 | 18.3 | % | |||
| Fed Funds daily effective rate (average bps) | 533 | 533 | — | % | 505 | 5.5 | % | |||
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 nearly 23,000 financial advisors, including advisors at approximately 1,100 institutions 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 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 were LPL Financial's total advisory and brokerage assets in May 2024?
How much did LPL Financial's net new assets grow in May 2024?
What was the net new advisory assets growth rate for LPL Financial in May 2024?
How did LPL Financial's client cash balances change in May 2024?
What was the net buying activity for LPL Financial in May 2024?
How did the S&P 500 Index perform in May 2024 according to LPL Financial's report?
What was the Russell 2000 Index increase in May 2024 as per LPL Financial's report?
