LPLA - Earnings call transcript Q1 2019 | LPL Financial Holdings Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and thank you for joining the first quarter 2019 earnings conference call for LPL Financial Holdings Inc.

Joining the call today are our President and Chief Executive Officer, Dan Arnold; and Chief Financial Officer, Matt Audette. Dan and Matt will offer introductory remarks and then the call will be opened for questions. The Company will appreciate if analysts will limit themselves to one question and one follow-up each. The Company has posted its earnings press release and supplementary information on the Investor Relations section of the Company's website, investor.lpl.com. and forward-looking operating statements and results, well other include future LPL plans, will management as and that financial outlook, opportunities call statements, about including Financial's as foresees. Today's risks potential business strategies Such and subject forward-looking may actual to beliefs materially. differ that are results uncertainties statements to current and or management's cause reflect estimates risks the filings earnings The those statements. caption forward-looking Forward-Looking the appreciate Company contained press as factors cause disclosures release, under that refers SEC differ the such listeners operating actual Harbor to of Company's well important those financial from as in matters in to to results the the latest timing Safe may contemplated Statements or or

Regulation G. the call, will the non-GAAP company SEC financial discuss During by also measures governed

measures found at the With now reconciliation comparable the call Mr. such the over to refer will a GAAP investor.lpl.com. be earnings please of release, can to turn Company's non-GAAP to that, I which figures, For Arnold.

Dan Arnold

thank for business business strong and financial on and excellence. you, of of growth. engagement core our our you focused led support Thank focus, another environment, combined growing to This to macro strategic remained the call. and joining In executing of first we everyone investor Carmen, priorities quarter, the quarter with today's with and

are starting experiencing renewed focus areas expand our a to Let's an is management we're friction at review and the progress, our focus by conferences. and unique They space. deliver enthusiastic new taking their helping out us our through these on experience first making from of with do we advisors and continued feedback how system. larger way recent in tell it are quarter business to that wealth the the about their two vision of to easier on capabilities Advisers them value our

Moving increased we year growth first profit financial quarter gross XX% continue year. to results, generate as to over our

operating to growth, while stayed Additionally, expenses we disciplined we leverage. on drive invested for

intangibles to up quarter a a XX% EPS from ago. As was prior year over was $X.XX, first result, which

advisory our over increase assets first combination to and year billion, levels. our was $XXX equity brokerage of by organic This higher were Turning primarily driven a up quarter X% business and growth market performance, year.

were market. translated volatility. in growth, a back reengaged Looking more net trends into X.X% This the assets positive annualized same-store at to quarter billion, recruiting Organic store growth throughout prospective which first growth sales advisors organic included new impact quarter move the move sales as dialogues we $X December of rate. closely the investors and and new strengthened beyond in as as

quality turn now assets. think core retaining as management. on achieve priorities, strategic advisors, and practices, better digitizing a the executing want these primarily practice these our areas. outcomes, return investing with we in on our key areas: enriching driving Let's grow To advice capabilities to starting modernizing business highlight about advisor to Today, and three we advisors in We are helping and of adding growth. of two that

First, advisors opportunity workflows their a transform we to to key continue business. digitize help that see big will

most important turning is One prospects clients. of the workflows into

results new introduced solutions, goals-based integrated we a proposal acquisition rolled QX, new our So CRM AdvisoryWorld, solution. our and our in generation as of planning of

practice. advisors into separate more our add integrated With streamline can to clients workflow, now capabilities efficiently these their one

solution, Pricing helping an advisors to in and win. and of help We lever portfolio work allocation while This also to to their them use efficiency asset client own important addition advisor and trading. flexibility our remains way gives In to we our sleeve the to of digitizing our new to in centrally which value recently workflows, day-to-day introduced advisors to outsourcing advisors enhance practices. leverage allocation meet allows another the while centrally differentiate platforms us managed investing platforms. managed in are capabilities models advisory platforms, needs, their drive strategic

We Over the have $X, which ETF to us, will with this clients. robust what revenue most We seen with offerings from partnership with And capabilities on no advisory past we year, matters investments sponsors, manufacturers fee are transaction with place opportunity advisors offering we reduce lower Financially, as driving helping believe we to we've cost. provide have later creating mutual in a their in lowering few sponsor select neutral $X will roughly similar In fund scalability result. the as transaction and ETFs simpler pricing this and transaction growth, from in the marketplace. now advisors a and of ETFs. of for one their be increase are revenue. developed years, charges their most utilization them, plan advisors to our for

this a and result, platform growth. an existing our which benefits compelling increasingly place makes to advisors thrive, in As prospective for our turn

model excellence. and priority, Let's culture. evolving transforming with our driving to as executing now ClientWorks, turn think second We continuous improvement, our strategic about service enhancing our this

ClientWorks are out is streamlined focus advisors save intuitive to X.X. and increase opening, these and enhancements their and serve clients. first and X.X our creating account experiences its new platform invest to across technology features and to part cash working as management account the completed of we continue as evolve and such value transfers. now new time will more The core we increase In X.X, We in ClientWorks version deliver differentiation. functionality, quarter, to ClientWorks of capacity Rolling help

improvement. to Turning continuous

transactional of real-time our the insights translating advisor and that enriches first from this is data. version quarter, elements learn survey we important feedback apply. it In with the capturing that One feedback most effectively into the launched initiative and can of we new our of alpha

customer and three advisors customer a this multiple has elements, of service us, At data approach. model care Now with we're continuously and intelligent from routing broadly, and call solution advisors us our in to a platform. other complex make information providing for more high gives channels a traditional operating our learning, excited management More by will to to care seen us we're agile I instrumental our highlight improving center primary level, for to thus to accelerate engage and our more our navigator working transform our help support moving this this to to nimble ongoing and to work And before to model efforts model a We've case is which want simpler executing having center. and industries This culture, without service this closing, accurate strategy. transform access to issues. our advisors. inquiries model bring their

a logic-based are structured behavior thinking As will mission mission. our decision-making rolled that by out of new values to bring taking a a reminder, quarter, starting in mission-driven with work. this guide are Last new instilling and quarter, the client-centric we alignment. to a we our mindset, a we approach in And set life daily

see priorities to believe focused growth. about core Our they're over to deliver call growth shareholder this our another create it financial quarter positions tell on is advisors our and excited business positive focus our advisors, value. remain service the to as to us drive cultural of us a continuing in taking with for serve catalyst profitable excellence. business I'll and experience. strategic that, growing Matt. We well and turn we're executing their hold and of transformation and We With change that In long-term pleased the summary, plan

Matthew Audette

earnings to while started and everyone call. invested gross All today's growth. And leverage. grew speak drive glad I'm growth, on operating still right. profit another and We with Thank We Dan. to XXXX business quarter with delivering you, assets and of

As result, was prior a up a year-ago. EPS our from intangibles to XX% $X.XX, QX

these We results continue with are executing pleased and focus our on to we strategy. our

by advisory brokerage our in to billion, depth, new X.X% Total and review annualized assets. We rising rate. total the and starting with net greater business sequentially, which markets a QX growth QX quarter were billion, driven at organic assets $XXX X% for equity results now $X finished the Let's growth. translates up

volatility. assets of driven pace following billion January, $X.X More billion slowdown growth advisors increased return recruiting billion gathering in $X.X asset February quarter to elevated and as by specifically, net new in in and Our December, March. throughout were the $X.X in the ramped market

Advisory mix new the X% inflows to of our assets, net And platforms. Within majority continue were also increased growth to we a rate. advisory, billion centrally shifts see managed in corporate XX% assets platform. our $X of QX. total of organic added driven assets on by We to positive

QX gross $XXX X% million It to or profit. million, $XX was let's financial with our results, starting Now sequentially. up turn

at profit, the advisory QX. fees down million $XX our decrease components of advisor which QX, this in commission million gross and driven of quarter. from $XXX Looking by deferred program, net was was mark-to-market payout million The of were $XX commission standard the

in the offset commission million increased in entirely the and seasonal has so is sequentially, revenue, profit effect production net other to this expense. deferred zero. on $XX a by fees decline advisory Prior commissions gross net bonus As driven expense, primarily reminder, increase

million had which in seasonally increases rate note ahead, a QX. benefit as related bonus would we our to payout came to below reminder, $X I in that payout, XXXX also production our expectations. QX our QX Looking from slightly a

Turning revenues. The XXXX to which renegotiated, related asset up a QX driven payment from were activity. was back $XXX of $X and QX. million, contract increase we revenues million a Sponsor million by included $X sponsor based primarily catch-up to

Cash billion buying sequentially to seen. quarterly driven XX% we ICA $XX Moving have down sequentially, was net revenues, higher $XX.X or highest $X.X yields. by cash which sweep the primarily from up rebalances of million, they $XXX $XX were billion, were activity million billion, level client

from our in floating Additionally, I would rate highlight balances. decline that was the ICA

new any agreements this balances So our XX% while ICA increased not we into of portfolio. quarter, rate fixed-rate about fixed the of enter did mix to

many we reminder, ICA contracts in not renewal for have a XXXX. As do up

expect many further shift this to rate have we to do additional year. while opportunities time, increase even balances fixed we So not our over balances

our yields Turning back cash QX. to for sweep

from fixed ICA we by was the average contracts XX driven higher QX, yield benefit points was basis full-quarter higher up in of short-term points, This rates QX. the and the primarily mix fixed-rate XXX balances. increase of executed Our rate basis

recent rates, the factors January XXX changes expect in the client driven those versus QX, be our full-quarter deposit and interest rates ahead of decline point Looking client mix, rates decline range. to fixed yield impact basis we ICA the assuming we in the mid-to-upper our floating deposit estimate Combining yield LIBOR. by ICA two and increase QX to in will or no further in short-term our slightly,

revenue. partially on million, from The transaction QX. primarily increase revenues. They million fees, by and up higher slightly IRA $XXX move were QX was $X seasonally from now lower Let's to transaction offset fee

to ahead and revenues transaction we to fee volume. $X seasonally by QX, primarily expect million, by roughly driven Looking lower decline transaction

$XXX sequentially. Core offset This by was driven Now million million turning expense. down increase in to partially a compensation fees, primarily seasonal lower professional QX, in $X expenses. G&A was by

continue million. in XXXX a full-year core range we $XXX anticipate $XXX of to ahead, to million Looking G&A to be

we and growth. continue investing help we of as the expenses, As technology them for the drive expect in year to ramp through timing to service

or million and $X on sequentially. primarily as Moving up in by XX% expenses. promotional $XX to expected, conference They were increases transition expense marketing by This seasonally QX lower assistance offset was million, driven expense. partially

promotional in Looking expense roughly we QX. QX line with ahead, be expect to

was to share-based in million compensation QX, QX. $X It Moving $X up expense. in million from

level expect Looking ahead we expense to at share-based to to QX, QX. be a compensation similar

It million million, $XX Turning up to amortization. was and $X depreciation sequentially.

over invest We and amortization continue expect technology growth. drive depreciation rise time in to as to we to

in to at margins grew relative gross it XX.X% to and we QX, as profit our leverage. gross EBITDA profit, while delivering our to invest drive growth, operating Looking increased continued to

Moving and down agreement available for use to slightly $XXX in sheet Cash balance remained was capital on to million net ratio leverage was X.XXx. QX. management, strong our credit our corporate

and M&A returning first deployment, investing growth of if and to advantage shareholders. arise organic Taking to Turning capital priorities foremost. our opportunities capital remain they for

Looking focused on grow technology. are recruiting growth, new our advisors, our to existing helping investments enhancing advisors organic at and

excess In $XXX authorization returned we million two years. share roughly investments growth, to our to repurchases, our complete included capital in addition This plan $X billion shareholders to in QX. line of our with over for

of outstanding. Looking year, returning disciplined capital million that, please dividends. shares staying closing, We we X.X QX, remain drive returned also With started In of XXXX call X% we repurchased with shares over we open focused back or growing operator, another gross of expenses for to results. profit, capital In have quarterly regular last through and are million and strong pleased investing shareholders. $XX the to total excess our organic and growth, business the assets questions. on financial while on to quarter

Operator

first you. Steven instructions] Research. [Operator from Thank Our is Wolfe with Chubak question

is line Your open.

Steven Chubak

quarter, start strong to again that question certainly the of Dan, improve a on the of afternoon. good I the you some to Hi, and hear. drivers organic cited momentum growth wanted encouraging in with

asset benefits the the to there at you're be wondering discuss M&A? type for in Now can some consolidation, seeing updated much by the activity separately, same space. And which advisor some been a you time, could about in of driven your thesis? a of you lot as continues thoughts I of the has provide M&A some if And result was of recruitment increased

Dan Arnold

Yes.

So Steve, there's lot a there.

it all, just So if get follow-up. please I don't

highest. start me strategically around organic in organic should should our M&A growth it with opportunity as about let potentially are that it's That how remarks, that growth, just interested So occur said, Matt question with growth. with And versus operationally. we the you think acquisitions I think financially first investment always that some and and that where I we his maybe always said return arise. remains lens that we share on organic priority it we think aligned your is strategically, in With complementing

the that an there and believe explore those think with to about bring will ongoing around we that. And create consolidation we possibilities, how to advisors so be again good discipline continue will acquisition we do for so that platform new will opportunity to us would all do

transactions when it as the occur, create recruiting out those does Now say, you in marketplace. opportunity

results. we how over as several pretty we've the to So last our strong had quarters, recruiting, we at over you if recruiting look pivot about think

months, over if the in you had we recruited quarter. billion the XX $X time actually look back over recruited we little $XX a little In the AUM had and in fact, first ever over a It's AUM. And had we've that. billion first trailing

of sort And go, back What couple do think And so of happening hey, you're success having peel you I there? what's things. begin a you think that there? there's to and

really is it's with whether you, target and the to teams shared to progress And better own recruiting as of works. improve and capabilities been data that capabilities. ways to I've how development evolve and and use we've think that which opportunities. be of new our new for sales of they're encouraging business making, the hard to continued part unit working I the and structures, see digital group we've efficacy And marketplace to processes it transform

once So a we're do grow pulling healthier prospects job and better in pipeline. to the they're pipeline of and seeing healthier them continue those a through

in sort You more a they we those And marketplace to I aligned more going on returns, and continued run created comes, relying out they're certainly in recruit like a opportunity ability assistance but opportunities. do match allocate of try there's just don't that's for that we've again, two things success we bode your trying short think to the out any with If the our is that of up where of reflective an outcome we those episodic circumstance think transition well had our in what predictor past than to circumstance. financial and with the forward, marketplace to we're the fundamentals transaction we some more the build opportunity. That also other so foundation, reputable resources that said, and market versus ignore. sustainable a

specifically and focused then how So - M&A thinking both little recruiting. about with that advisor how hopefully on about think you we're gives we answer a M&A of acquisition

there. pause me Let

about had I'll organic a me follow-up to want question growth, you if on but may let that. down you You drill have

Steven Chubak

side. helpful the focus Nice. really to really Dan. It's on color, I wanted M&A

So for I all Matt, question a appreciate you. context. just that

good in capital guidance thoughts outlook the on to like was the ongoing impact macro hoping hear specifically Given hikes And you months, how G&A your and point XXXX. original you're year? this perspective And still the volatile expanding more your around continued in been dependent it's the has about over management? past I at quite feel on feeling areas Do rate backdrop specifically, going repurchases? core your the was how six to

Matthew Audette

Yes.

built move macro I positioned, business our think and models And markets equity good. given natural directions. especially tend it, as opposite hedges we're rebalances get cash in feel I to into well So

million bit little And a about maybe change cash sensitivity right. S&P is in $XX So impact billion about move reminder, XXX-point impact, rebalances for the in $XX a the there, every million us. every $X a is

last increased balance of two billion look our just when points, XXX go question, saw you month the cash I if December, $X we to down has meaningfully, look the at think QX, in over of but for the we by the the just So markets about at almost And your quarters, the and point offsetting when cash declined you billion look you QX, billion. then recover about at a and over $X in equal at went saw quarter. then and little up they rebalances $X quarter XXX were this amount back market into points by S&P

see over you those other. offset moves So quarters, just each can couple roughly of at looking last they the

So I with positioned, a I natural and consistently your really the them. these sheet allows on have us position, we which perspective to for us, question focus best strategic combined think think from core to strong balance clients what's a hedges, for getting where the is of our

are over So think investing to investing in experience we capabilities, improve the and technology, their term. all things in in service, investing growth going drive long

really and say discussing, whether be capital those comes think it's the up, on was differentiator or we in consistent plays just side, through of for Dan we over I'd six the the So thing And over if think, I deployer in environment it a really like of capital driver we all repurchases same long-term. It's areas. growth be the well a good. with share us real steady saw as be it positioned M&A to an ourselves able to months last even allocation

Steven Chubak

for That's my great, Matt. taking questions. Thank you

Matthew Audette

Sure.

Operator

question Katz is Thank you. Bill with next Citi. And from our

Your open. line is

William Katz

the questions. you Thank Okay. for very much taking

you up, puts investment if certainly of like sort asset much enhancements rather in the of than of your technology you're terms a competition seems How which front making there's you sort lot of opening playing just of some today, catch in will? Dan, of these new of commentary, growth. it and So spending and traction

Dan Arnold

journey resources. they at you multiyear look from of and to time, we standpoint, do, And such model. allocating on on those, your investment I to good we and where places, say over right to run to in in had how the and It at take framework differentiate we think challenge kind right. the are create work marketplace in There's Bill, I and I invest and that you that that continue we improve we have the a with that acknowledged think and ourselves look, certainly, we tend those how think other we try going area think strategic to catch or we about not to appeal period us those help of gap, that to to an then out we're the beginning experience. further that fill strings more enhance think then we on a starts just up create capabilities, it only and differentiated in a in push do such order and but continue forward solid

area. So them tend to that, for we our strategy, focused be with absolutely I is help in processes' on in leader differentiate form that then in advisors a leader do advisor win. a capabilities the we've summarize how if area. on technology we start secondly, And capabilities, of that experience to be we want our been then improve and and to focused to want We creating that which

be so hope and that efforts. I about human the kind to to so at toward think and those our with that answered how that's being your mindset ultimately and best, the what's question. allocating resources capital invest, there look we up we journey start our the frame of extent we I to And opportunities

William Katz

see we're metric a where any of terms And terms just April in them, follow-up, helpful. in surprised advisor think May? sort there are kind better per just what then related about was given of I the and little is commissions And to of trends a elevated I And into we seeing IFP to That's buying. exposure? way the of didn't my

mix was Was made? shift part that of any So of there sort pricing here? maybe a the adverse you change

Dan Arnold

Yes.

start with me to we'll try down. and Let then IFP, walk those

that IFP roughly up out, we two-thirds we question, So retaining assets. in we'll end effort short as of to sort of with your respect - the closed think, I

little as give color down So walk let to place. a you get how to that and me we

$XX $X.X billion the with the will assets assets QX, time, billion remember, on means Roughly, you which billion look QX, on $X.X it roughly of retaining which and started June stay is that those you two-thirds remaining their and $X May our that if with, our if brokerage at the platform, IFP About associated off. transition in left probably was $X So that advisory of in about billion will of will means in out transition periods of more come million date. platform. specifically

metrics, suggest we the more look we you advisors, would that an retained different more the of little XX% balance on at slightly which than on If retained basis, advisor a through productive advisors. perhaps

your things into think, organic how outcome. about we good pretty IFP billion Hopefully, that So all-in, sort we With of new X.X% was had respect thinking I to net answers question. your second strong. question pretty QX again, of as a and quarter, annualized, think We are growth. that's growth we roughly move $X assets

we of As We strengthening and with and in which number will into of QX, a the quarter, support certainly early delivered which move QX, takes QX saw into appeal platform. momentum in going we capabilities second the certainly enhance us QX.

their You continue from of strong an efforts. the efficacy and our sales standpoint work organizations good

typically are just that I the with that using first would second in would see period, So will always, couple have that. where growth that are to their the tax their as that the IFP come And their associated people for out are the will of some billion seasonal you and a we then be we pay be April half feel items things about call taxes, accounts organic out where prospects so $X.X paying remember. taxes. One quarter. good in There of people and to cash

answers QX. that the you I'll let questions is which question, take third hope I advisor Matt, around QX. in about your think to something that's So on productivity.

Matthew Audette

Yes.

on fee are on assets the prior highlight couple trading side, fees on quarter. in there's quarter. advisory QX where on less driven just sales One, So a And the just primarily of then commission I'll two the just fees, the things. a advisory ended commission than in quarter the reminder fourth Bill days side, the

quarter the would QX, being when this else So see flow-through the results recover in what effect we all the of in you decline QX. that see market which see is in you equal, you

those the things think, two trend that little bit are make So counterintuitive. a I that,

William Katz

perfect. you. Okay, Thank

Operator

our from Alex And you. Goldman Thank comes Blostein Sachs. next with question

line Your is open.

Alexander Blostein

Thanks.

on factors the on So maybe point in season? just balances around back you seasonal your reasonably cash of of robust, obviously, April, the guys some in an on of presumably follow-up deployment the And market. Dan, more have tax the markets so kind just update with where been a currently the stand there has been back

Dan Arnold

Yes.

I drill our bit, metrics just April in that weeks. monthly a give on couple knowing if So we'll down you a here of

context. So directional sense let we of how a about as think me you April give

got the you As April. taxes is in activity. equity first markets the going paying say, all-in-all context those height of the half the moved in you've seasonality on up, which tech of of good the Certainly a for

expected in So would have those we saw things, would given April. we say, what two I

strengthening of and engagement. the markets with associated engagement. second moving in then good Asset month, certainly the past activity balances both the saw investor up the half equity payments decrease or of And tax was M&A solid in month investor levels finally, season. solid tax consistent investor pace We and with reengagement given cash

around the that April. you, sense Alex, of gives So hopefully, of color little some a

Alexander Blostein

then slightly And definitely that's No, helpful. picture question. bigger Great.

toward think meaning asset really just On you the about kind of recruiting return of quarter. up the kind the next we range? billion of And level alluded of pace to there the asset billion assets, net the that did last accelerated we around $X anticipate kind quarters, back new half $X year as the couple to should end to rate as of guys recruited the well, a that kind that short metric of saw we the disclosed on run you in recruited

Dan Arnold

Yes.

be get pickup we quarter the one that quarter did said, move volatility suggest So another. recruiting those logically advisors I would discussions of as from would in dialogue. see reengage you we through and further away the That and never a predictive as would

our respect driving to sales with of store recruiting within it's working our hard think a to would new I it that aspirations I XX-day rights, and on time. define say work a have for them said, pointed efforts And to recruiting over our improve that trend toward definitely said, hard and predict it's That quarter desire to is to increase continuing quarter. time. continue to just period to

Alexander Blostein

it. right. very Thanks All Got much.

Operator

And from you. Thank with Siegenthaler Suisse. Craig question comes Credit our next

Your line is open.

Craig Siegenthaler

evening. Good Thanks.

XQ somewhat in client of risk that and decline December. incremental was about how in we point an decline the we high with the just here further if starting anomaly cash, continues? on in cash the given downside So backdrop But should sorting understand think

Matthew Audette

range. when X.X month. clients percentage typically of of went And point from Yes, December, the think Craig. you you we periods from tends kind happen and can of think us to so seen in or When I we're X hover like growing just about it's when market in deployed cash like seeing are more we X.X% about right. X.X% have best increasing hold market. that cash in X%, guide one. then I really volatility take in mean, that go you've I like one - I'll I where markets where and cash here, is right history mean, think driven, And now, cash just to get AUM

their those trends and the or up disbursements. clients think facilitate that I are about think in So thing from I accounts, standpoint. of cash the some highlight probably best to take queueing typically would or paying maintain to and look fees just cash rebalancing to amount cash at of level trading

hold fell you say cash lowest that go would And close for the to at low of QX look last balances, X%. back were at you in pretty you level if of So to year, level X% minimum the they our I'd range, those right factors. almost

best the probably some give can thing that's and you context there. So point to I

Craig Siegenthaler

of you you in you I if recall But XXXX if if a it but And Or bottomed? add relationship the do the current - so don't has think it tenurable last think know actually probably. about which, you where cycle. market? than was XXXX, won't you know client higher have you Matt, I And is the function I and just LPLA here Do data, guys if changed? levels, a think, it

Matthew Audette

Yes.

performance I I think referenced really pretty is sweep across accounts what similar general was just I where year. And of the think last last AUM gotten the is a lowest space. of percent from we've our -

cash that, was peaked percent end when cycle. just other end of AUM XX% of the last the at highest got of On volatility a ever as under the the

So probably the could on where those think I two bookends about go. would are cash

Craig Siegenthaler

you. Thank

Operator

Thank you.

Harris question is next Fargo. from Our Chris Wells with

open. is line Your

Christopher Harris

guys. Hi, Thanks.

the Was I pretty missed drove large in the interest the rate moving if that in quarter? what it, all attributable rates? Sorry but fee step-up to DCA the

Matthew Audette

Yes, I mean…

Christopher Harris

seems large a It like move.

Matthew Audette

Yes. DCA It makes got fees bit a of fee One, I two a in things. short has remember, noisy. little the always moves period account. a per time, the mean, are

quoted but as and they're points, has and down. account balance charged So we per moved went fee actually basis a in

noise So which of gets rate the fee made following fourth end get change the had we at of that a you little hike of a bit the that and timing the with quarter.

So up went those things rates it's a that it and went at bit But down. the it's two little core, its balances noisy. make

drove So that up. the those that are two things

Christopher Harris

Okay.

was increase thought kind was of lower In there there we expense, actually bit up. and to push supposed through your than was year. a pricing flattish which that the thought to year on production a flow But that terms I of production-based it bonuses going

offsetting the was what So factor there?

Matthew Audette

Chris. Yes,

little remarks. had up up payout XXXX benefit bit We So that million than a our in that I being $X was less ended the estimated. - to referred the ended prepared we

line as So up that, benefit through suspected in coming have been pricing you you it or line. in change would due it that show that correction because does that the Without item. to see an increase that

you'll So next that quarter. see increase

Christopher Harris

it. Got

Thank Okay. you.

Operator

Thank you.

Securities. question JMP Ryan Our with Devin from is next

is line open. Your

Devin Ryan

afternoon, Good guys. Hey, great.

Matthew Audette

Devin. Hey,

Devin Ryan

Hey.

another pause for the the on sensitive? maybe bring I and, one at on If look cash something see outlook. Just the while, guess, I pay less of expectations. there you you Fed always here yield that cash maybe for is is appreciate segments are room a clients Or certain do down rates? to

Matthew Audette

Yes, Devin.

and on competitors Fed our we on sense foremost, pricing deposits unchanged what what on is make a first which right, set product. is view paying and hold and look our think while, that I always for the at the if even is are competitive for

especially way are you range, rate that's when largely to product that Fed about market would be about pricing our XX% And the coefficients think is not to we it. think not is balances are that moving, the and moving that DCA, I are we generally I in either. if while And that think the those best for about small ICA think think a cash set, when wouldn't XX% and we the operational anticipate sensitive. talked moving I not that about

Devin Ryan

Got it.

expand. to helpful. Very with obviously, employee Okay. to then continues And headcount, respect

all focuses advisor, look that's else? guess, think think on system the about headcount investment really of kind or investing, we somewhere thing. or more comments bit should most forward, put pace a catch-up of you at expansion into When continuing guys, it, are of headcount? consistent then moving the as that's little a you think areas good I And kind of advisor and I there hiring technology of a still I now? with of the trending where lot with you're Or right from to here is surveys just

Dan Arnold

And to of obviously think, continue headcount opportunities, priorities. of your of enable in of of would human good bigger you that I aligned that and to the with in leverage would and question, certain a mix which that our answer process of technology areas we and the reputable are use I of began Yes. manual would points the think first That things there the It's predictable headcount. that both capital some said, terms or us be, to robotics is a see been is investing drive service automate consistent your pace into and a question. have respect to with pull investment et type cetera., that you may of that processes. offset from would some and increase in machine learning, as efficiencies Though technology through to increasing

So spirit, headcount our headcount at we advisor expect our lower in would a to be that growth. trajectory trajectory than

Devin Ryan

Got it. Thank Great. helpful. you. Very

Operator

you. Thank

Stanley. Morgan with Cyprys Michael from comes question next Our

Your is open. line

Michael Cyprys

Thanks taking the afternoon. question. for good Hey,

slow Just ask a hybrid flowed in continued channel. wanted to to Looks have the little like bit. about advisor flows the

Just forward your expectations we and from to around updated thoughts take that wanted here? as look

Dan Arnold

important in hybrid out the that ensuring advisors again, marketplace to and committed corporate respect they're preferences to different both both. to meet offering of we versatility the in and We No, with models. invest very think Yes. to have we're the the the continue

balance strengthening are noisier making we to through in didn't combination see and you're going And which that the of support alignment the certain clients. that beginning we as you in investments a we're our seeing both saw to model, as less think channel. strategic last hybrid our in actually believe, and growth well returning year, where growth investments of environment with our platform will, pull-through is system, the have you I and that forward platform I as, think, mainly necessarily

Michael Cyprys

Got it.

the And question a Okay. managed on assets. then follow-up centrally just

little you that. billion billion and said think, I $X bit recent into we've $X.X range, about think below seen a flows in $X to It's I billion quarters.

take driving of sort So to could the wondering growth? I slowdown? that what And just was actions what reaccelerate you

Dan Arnold

Yes.

our So meaningful the first deliver believe value and managed all, advisors for we clients. of centrally solutions their

area you as that of last outflows our investment platform, is from managed on the movement centrally which years the seen couple to certainly and so we've said, actually over And inflows increased you've encouraging. in

In far of overall from QX of fact, assets level about XX% actually net up target in performance. off made centrally the new which in that managed wasn't certain platforms - advisory, year, last sorry, our

big not QX as is an anomaly. So of

which advisor to in of I remarks. factors I an would said, there. of correlation saw consequently think of think like platforms have A and great them. my in be perhaps April, as and them the we we sleeve introduced QX, I you solution, adjustment invest just further some lower referred to in growth other opportunity NNA in our so That see sort just continue example managed

makes to new managed for to We also created accounts tool, platforms. a it our move centrally conversion simpler advisors which

think we and utilization those of to will So appeal this advisors. higher in ongoing drive the investment platforms innovation support and by them of continue

Michael Cyprys

you. Thank Great.

Operator

JPMorgan. from you. with our Ken is next Thank And question Worthington

Kenneth Worthington

asset here LPL? are thoughts what nontransparent does your Hi, the ETFs. gotten Maybe has become mean it for good this if adoption? might what popular, approval And afternoon. first, for industry management Maybe the on broker advisor or

Dan Arnold

Yes.

So we like some any product. that likely just evolution has future, that product other think happen category the overnight won't do but

gets requires the in diligence that terms and industry it it right investors. think extensive optimally of ensure to I serving education

we certainly time are take and especially already that ETFs, some sponsors, platforms on advisory So will of distributor have work our a to large working That right. through. said, relationship these with

them actively to we through for a these And we work we're at types similar that look how as on it sure would this making with we around opportunity use. way an to them as and innovating with do engaged position of advisors So opportunity solutions. think appealing

So we for see and it proposition expand of our opportunity to advisors. as continuing innovation an the value

Kenneth Worthington

you of kind kind to January you through from that And How advisors recruitment, toward there XQ here new net XX. terrible up quarter? recruiting? March. influenced the then And saw XQ and cadence about think did of heavily new mentioned that building cadence that weighted as the March, of great in February stories well as of were to Thanks. contrasting Is maybe I sort the are the the the assets guys accelerating was recruitment

Dan Arnold

Yes.

a further and in we some and accelerated you certainly through discussions the environment. you normalized from volatility December, quarter recruiting, the definitely got So dialogue engagement said. recruiting in in more more as The away

leadership those said aligned think development more in with is teams financial much about earlier, the a TA of two levels team and of we performance. As to about their feel returns, way the terms with good we reputable recruiting improving recruiting. business doing our efficacy the work that think of sustainable of and I create our dynamics we've Since

are those that, some ways swing think drive I and believe, our from we will volatility. big So performance the aside

is thinking So I think your right.

Kenneth Worthington

very Okay, you much. Thank great.

Operator

our Thank Dan you. call Arnold to his And to Q&A for I ends would like session. the this back turn final remarks.

Dan Arnold

Yes.

join taking afternoon. thanks to and for you, So time this us thank everyone

Day holding on we Investor May a our York New as and Analyst in Just are XX. reminder,

So with it. we'll greater in discuss we as business make can hope you depth. to you look We everyone. our speaking forward then, Thanks,

Operator

ladies disconnect. And day. gentlemen, concludes may and conference. wonderful the participating all you program thank with a today's you and This that, for in Have

LPL Financial (LPLA) 5 May 192019 Q1 Earnings call transcript