Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Statements in Item 2 - “Management’sPart I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report on Form 10-Q regarding regarding:

We areLPL is a leader in the retail financial advice market, the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine June 1996-2017), a top custodian for registered investment advisors (“RIAs”), and a leading independent consultant to retirement plans. We provide an integrated platform of brokerage and investment advisory services tomarkets we serve, supporting more than 14,000 independent17,000 financial advisors (our “advisors”), includingnationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to objective guidance from a financial advisor. At LPL, independence means that advisors at more than 700 financial institutions acrosshave the country, enablingfreedom they deserve to choose the business model, services, and technology resources that allow them to providerun their retail investors (“clients”) with objective financial advice through a lower conflict model. We also support approximately 3,700 financial advisors who are affiliated and licensed with insurance companies that use our customized clearing, advisory platforms, and technology solutions.

Under our self-clearing platform, we custody the majority of client assets invested in these financial products, for which we provide statements, transaction processing and ongoing account management. In return for these services, mutual funds, insurance companies, banks and other financial product manufacturerssponsors pay us fees based on asset levels or number of accounts managed. We also earn interest from margin loans made to our advisors’ clients.

We regularly review various aspects of our operations and service offerings, including our policies, procedures and platforms, in response to marketplace developments. We currently expectseek to implement changes tocontinuously improve and enhance aspects of our operations and service offerings in order to position our advisors for long-term growth and to align with competitive and regulatory developments. For example, we regularly review the structure and fees of our advisory programs,products and services, including related disclosures, in the context of the changing regulatory environment and competitive landscape for retirementadvisory and brokerage accounts.

As a regulated entity, we are subject to regulatory oversight and inquiries related to, among other items, our compliance and supervisory systems and procedures and other controls, as well as our disclosures, supervision and reporting. The environmentWe review these items in the ordinary course of business in our effort to adhere to legal and regulatory requirements applicable to our operations. Nevertheless, additional regulation increased regulatory compliance obligations, and enhanced regulatory enforcement has resulted, and may result in the future, in additional operational and compliance costs, as well as increased costs in the form of penalties and fines, investigatory and settlement costs, customer restitution and remediation related to regulatory matters. In the ordinary course of business, we periodically identify or become aware of purported inadequacies, deficiencies and other issues. It is our policy to evaluate these matters for potential securities lawlegal or regulatory violations, and other potential compliance issues. It is also our policy to self-report known violations and issues as required by applicable law and regulation. When deemed probable that matters may result in financial losses, we accrue for those losses if the amounts can be reasonably estimated, based on an estimate of possible fines, customer restitution and losses related to the repurchase of sold securities and other losses, as applicable. Certain regulatory and other legal claims and losses may be covered through our wholly-owned captive insurance subsidiary, which is chartered with the insurance commissioner in the Statestate of Tennessee. Our ability

Assessing the probability of a loss occurring and the timing and amount of any loss related to estimate such costs may varya regulatory matter or legal proceeding, whether or not covered by our captive insurance subsidiary, is inherently difficult and requires judgments based on a variety of factors and assumptions. There are particular uncertainties and complexities involved when assessing the current stageadequacy of evaluationloss reserves for potential liabilities that are self-insured by our captive insurance subsidiary, which depends in part on historical claims experience, including the actual timing and statuscosts of discussion with regulators, as applicable. resolving matters that begin in one policy period and are resolved in a subsequent period.

Our accruals, including those established through theour captive insurance subsidiary at September 30, 2017,March 31, 2021, include estimated costs for significant regulatory matters or legal proceedings, generally relating to the adequacy of our compliance and supervisory systems and procedures and other controls, for which we believe losses are both probable and reasonably estimable.

prohibited transaction exemption requirements for our servicing of certain retirement plan accounts that are subject to the ERISA, and the prohibited transaction rules under section 4975Employee Retirement Income Security Act of the Internal Revenue Code. These types of accounts include many employer-sponsored retirement plans1974, as amended (“ERISA”), and individual retirement accounts ("IRAs"(“IRAs”). TheIn December 2020, the DOL also finalized certaina new investment advice fiduciary prohibited transaction exemptionsexemption with regard to such accounts that allow investment advisors to receive compensation for providing investment advice under arrangements that would otherwise be prohibited due to conflicts of interest. The DOL Rule became applicableeffective on June 9, 2017 and the full implementation date for conditions under related exemptions currently is January 1, 2018; however, a delay in the full implementation date has been proposed. We are continuing to analyze and evaluate the impact of the DOL Rule and related amendments to exemptions on our clients, potential clients, and our business, as the DOL Rule and exemption requirements become applicable. BecauseFebruary 16, 2021. ERISA plans and IRAs comprise a significant portion of our business and we continue to expect that compliance with the DOL Rulecurrent and future laws and regulations with respect to retail retirement savings and reliance on new and amended prohibited transaction exemptions under such laws and regulations will require increased legal, compliance, information technology and other costs and could lead to a greater risk of class action lawsuits and other litigation. Please consult the Retirement Plan Services Regulation section within Part I, “Item 1. Business” within our 2016 Annual Report on Form 10-K as filed with

Future laws and their potential impactregulations, including the new rule proposed by the DOL and state rules relating to the standards of conduct applicable to both retirement and non-retirement accounts, may affect our business in ways that cannot be anticipated or planned for, and may have negative impacts on our products, services and results of operations.

Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the United StatesU.S. financial markets. In the United States, economic dataThe global economy in general continued to point to fairly steady economic growth over the second and third quarter of 2017 after some slowingshow improvement in the first quarter.quarter of 2021, supported by additional fiscal stimulus, accommodative central bank policy and accelerating vaccine distribution. Despite clear progress, efforts to contain the COVID-19 pandemic continue to play a significant role in the global economy and the recovery has been uneven, with progress in some regions delayed by the impact of new COVID-19 variants as well as varying policy responses.

The outlook for the U.S. economy, in particular, has improved substantially over the first quarter of 2021. The Federal Reserve’s (“Fed”) most recent median GDP projection for 2021, released following its March 16-17, 2021 policy meeting, saw the economy growing 6.5% in 2021, a large upgrade from a median projection of 4.2% just three months earlier. According to the most recent estimate by the U.S. Bureau of Economic Analysis, real gross domestic product (“GDP”) grewthe U.S. economy expanded at an annualized rate of 3.0%4.3% in the fourth quarter of 2020 after a dramatic rebound in the third quarter. Data received during the first quarter of 2017. This estimate translates2021 suggests that growth has likely accelerated further from fourth quarter 2020 levels. The unemployment rate, which had spiked to an overall growth rate over14.8% in April 2020 has declined steadily to 6.0% in March 2021, according to the last four quarters at 2.3%, slightly higher than the average for the expansion. GrowthFed. The Fed also reports that consumer spending has beenincreased, supported by a largely healthy labor market, generally steady consumer spending, signs of improved business investment,an additional fiscal stimulus passed in March 2021, high savings levels and continued low interest rates. Stronger global growth has also provided support, with stable or accelerating growth across most major economies. Business and consumer confidence have remained elevated, with only modest declines since the run-up following the U.S. elections in November 2016. Despite economic stability and a healthy labor market, inflation has remained below the Federal Reserve’s (“Fed”) 2% target. While a prospective rise in U.S. economic growth to 2-3% may seem modest by historical standards, it would still be above the Congressional Budget Office’s estimate of potential GDP growth; and could be enough to further tighten the labor market, push wages higher, and increase the probabilitygradual reopening of the Fed following througheconomy. Business investment has continued to rebound and readings on its median projected rate pathboth manufacturing and service sector activity are showing strong acceleration, although off of one more rate hike in 2017 and three more rate hikes in 2018.weak levels for those sectors most impacted by the pandemic.

Equity volatility remained low throughout the third quarter of 2017 and into the start of the fourth quarter, while broad measures of financial stress have been subdued. The S&P 500 Index has further extended its rally, posting steady gains supported by solid earnings growth. Thereturned 6.2% during the first quarter of 2021. Smaller stocks significantly outperformed the larger stocks represented in the S&P 500 Index for the second straight quarter, as the Russell 2000 Index returned 12.7%. Value-style stocks performed better than their growth counterparts as leading value sectors energy and financials outperformed while the growth-heavy technology sector lagged. Non-U.S. stocks trailed their U.S. counterparts during the quarter as the U.S. dollar strengthened. Developed international equities returned 3.6% while emerging markets (“EM”) returned 2.3%, based on the MSCI EAFE and MSCI EM indexes. Most fixed income sectors fell as interest rates rose sharply, with the 10-year Treasury yield was near flat over muchclimbing from 0.93% at year-end 2020 to 1.74% at the end of the thirdfirst quarter but has pushed higher in September and October. Stable financial conditions have helped more economically sensitive fixed income sectors generally outperform higher quality sectors.2021. The Bloomberg Barclays U.S. Aggregate Bond Index lost 3.4% over the quarter.

Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy. During the first quarter of 2021, Fed policymakers maintained the target range for the federal funds rate at 0.0 to 0.25%. According to projection materials released following the conclusion of the March 16-17, 2021 policy meeting, the median expectation among meeting participants remains that the Fed will not begin raising rates until after 2023, although a few participants projected the Fed raising rates as early as 2022 and several in 2023. Federal Reserve Chair Jerome Powell continues to emphasize the Fed’s belief that any near-term increase in inflation is likely to be transitory and that the Fed would like to see realized inflation moderately above 2.0% for a meaningful period of time before it would raise interest rates.

Please consult the Risks“Risks Related to Our Business and IndustryIndustry” section within Part I, “Item 1A. Risk Factors” in our 20162020 Annual Report on Form 10-K for more information about the risks associated with significant interest rate changes, and the potential related effects on our profitability and financial condition. Following the conclusion

The decreaseincrease in sales-based commission revenuerevenues for the three months ended September 30, 2017,March 31, 2021 compared withto 2020 was primarily driven by rising long-term interest rates that led to an increase in sales of annuities and fixed income products.

The increase in trailing commission revenues for the same period in 2016,three months ended March 31, 2021 compared to 2020 was primarily due to a decrease in activity for fixed and variable annuities. Fixed and variable annuities commissions were primarily affected by marketplace uncertainties in response to the DOL Rule, which became applicable on June 9, 2017 and changes in commission structures.

While there has been a COVID-19 vaccine roll out and the number of cases in 2016 was duethe United States is decreasing, that could change and we cannot predict how the ongoing COVID-19 pandemic and foreign and domestic responses to net new advisory assets

Asset-based revenues for the three months ended September 30, 2017 increasedMarch 31, 2021 decreased compared to $184.0 million, or 33.0%, from $138.3 million2020 primarily due to decreased client cash revenues, partially offset by an increase in recordkeeping revenues and sponsorship programs.

Revenues for our recordkeeping and sponsorship programs for the three months ended September 30, 2016. The increase isMarch 31, 2021, which are largely based on the market value of the underlying assets, increased compared to 2020 due primarily to increasedthe impact of market appreciation on the value of the underlying assets.

Client cash revenues from our cash sweep program. Cash sweep revenue increased to $81.6 million for the three months ended September 30, 2017, from $40.7 million for the three months ended September 30, 2016,March 31, 2021 decreased compared to 2020 due to the impact of an increase in the target range for thea lower federal funds effective rate, partially offset by lowerhigher average client cash sweep balances. As of September 30, 2017, our cash sweep balances decreased compared to September 30, 2016, with average cash sweep balances of $28.0 billion and $29.1 billion duringFor the three months ended September 30, 2017 and 2016, respectively.

Transaction revenues primarily include fees we charge to our advisors and their clients for executing certain transactions in brokerage and fee-based advisory accounts. Fee revenues primarily include IRA custodian fees, contract and licensing fees and other client account fees. In addition, we host certain advisor conferences that serve as training, education, sales and marketing events, for which we charge a fee for attendance.

We earn interest income from client margin accountsloans, cash segregated under federal and other regulations and cash equivalents, net of operating interest expense.equivalents. Period-over-period variances correspond to changes in the average balances of assets in margin accountsloans and cash equivalents.balances as well as changes in interest rates.