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LPL Financial's (LPLA) August Metrics Down on Weak Markets

LPL Financial Holdings Inc.’s LPLA total brokerage and advisory assets were $1.1 trillion at the end of August 2022, decreasing 1.7% from the prior month and 4.5% year over year. The fall in LPLA’s assets balance from the July level was mainly attributable to weak market performance.

Of LPLA’s total assets, brokerage assets were $524.9 billion and advisory assets totaled $580 billion. Brokerage assets were down 1.1% from July 2022 and 5% year over year. Likewise, advisory assets declined 2.3% from the prior month and 4.1% from August 2021.

LPL Financial’s total net new assets were $9.7 billion in the reported month. Net new assets were $4.8 billion and $7.6 billion in July 2022 and August 2021, respectively.

The company reported $65.8 billion of total client cash balance, down 5.2% from July 2022 but jumped 33.7% from August 2021. Of the total balance, $47.1 billion was insured cash and $12.4 billion was deposit cash, while the remaining was money-market balance.

LPL Financial’s recruiting efforts and solid advisor productivity will aid advisory revenues. Also, it is expanding through strategic buyouts on the back of a solid balance sheet position.

The stock has surged 43.4% so far this year against a 14.5% decline witnessed by the industry.

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Zacks Investment Research

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LPLA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competitive Landscape

A couple of other brokerage firms that have come out with monthly data are Interactive Brokers Group IBKR and Charles Schwab SCHW.

Interactive Brokers’ Electronic Brokerage segment announced performance metrics for August 2022. The segment (dealing with the clearance and settlement of trades for individual and institutional clients globally) reported a sequential rise in Daily Average Revenue Trades (DARTs).

Total client DARTs for the month were 1,968,000, up 8% from July 2022 but down 9% from August 2021. On an annualized basis, IBKR recorded Cleared Average DARTs per customer account of 222. The metric grew 6% sequentially but plunged 33% from the prior-year period.

Schwab released its activity report for August 2022. Core net new assets were $43.3 billion in the reported month, jumping 37% sequentially but falling 16% year over year.

Further, SCHW’s total client assets were $7.1 trillion, down 2% from July 2022 and 9% from August 2021. Also, client assets receiving ongoing advisory services were $3.65 trillion, down 2% from the prior month and 6% year over year.

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