LPL Financial saw its net new asset haul surge in the fourth quarter as it welcomed the wealth management unit of the insurer Prudential into its fold.
LPL reported Thursday that it hauled in $68 billion in net new assets in the fourth quarter. The bulk of that — $40 billion — came from Prudential Financial, a Newark, New Jersey-based insurer, retirement plan and wealth management firm. LPL announced in August 2023 it had been selected by Prudential for the provision of RIA, brokerage and custodial services.
Advisor headcount
Prudential's addition also helped push LPL's advisor headcount to a record high. LPL reported having 28,888 advisors by the end of 2024, 6,228 more than in the previous year. Of those added in the fourth quarter, 2,800 came from Prudential. And Atria Wealth Solutions, a $100 billion AUM firm that LPL
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"This team pulled off an exceptional delivery, which doesn't surprise me, because we've been building those capabilities to do it," Steinmeier said. "And I would imagine that, in time, it will result in more and more firms in the industry considering us as a potential partner for them as well."
LPL has been particularly aggressive among independent broker-dealers in growing in recent years. Chief Financial Officer Matthew Audette said the Prudential deal is expected to continue to pay off in the first quarter this year by bringing in another $23 billion in net new assets.
He also said LPL brough in roughly $15 billion in assets in January through the completed recruiting integration
"So I think a really compelling result and strong setup for Q1 on the growth side," Audette said.
Assets and expenses
The fourth quarter's haul helped push LPL's total assets up by nearly 30% year over year to $1.7 trillion. Assets in advisory accounts rose by 30% year over year to $957 billion.
Those assets contributed heavily to LPL's $3.5 billion in revenue for the quarter, a figure up 33% year over year. Revenue from assets in advisory accounts rose by 47% to nearly $1.6 billion. And revenue from commission-based accounts contributed $965 million, a figure up 41% year over year.
LPL likewise saw its expenses rise, going up by 35% year over year to nearly $3.2 billion. The biggest contributor to that was fees and commission paid to advisors, which rose by 40% to $2.25 billion.
Those expenses left LPL with $270.8 million in net income for the quarter, a figure up 24% year over year.
Remark
While Steinmeier predicted LPL would continue collecting net new assets at a rapid pace in 2025, he acknowledged that advisor recruiting is now "below historic norms." But he said that, too, should pick up this year, especially in LPL's case.
"We continue to get demonstrated wins that actually validate us in new markets, not only in our private wealth markets and our large institutional markets, but a continuing progress in the momentum in serving wirehouse and regional advisors through our new models as well," he said.
