Although a recruiting juggernaut, LPL Financial reported a headcount dip in the first quarter as executives pledged the firm would return to its historical position as the main magnet for advisors seeking independence.
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LPL said it lost 34 advisors net in the first three quarters of the year. That may have been only a “rounding error” for a firm with more than 32,000, as an analyst put it on an earnings call with LPL executives on Thursday. But it also was an unusual blip for a firm that has ridden a succession of acquisitions and recruiting deals to become the largest independent broker-dealer by almost any meaningful measure.
LPL executives were quick Thursday to say they were putting a renewed emphasis on increasing the firm’s headcount.
LPL Financial
“You can hear it even from third-party recruiters, as we’re back and engaged,” CEO Rich Steinmeier told analysts. “I think they feel bullish about our ability to really move back into the position [where] we have historically been, which is the leader in capturing advisor movement and extending that share capture over time.”
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Moving on from Commonwealth advisor retention
Steinmeier and others at LPL have said that many of the firm’s recruiting resources over the past year have been devoted to retaining advisors at its former broker-dealer rival Commonwealth Financial Network. LPL bought Commonwealth in August for roughly $2.7 billion.
LPL executives predicated the economics of that deal on their prediction that they would be able to retain by year’s end at least 90% of $305 billion in client assets Commonwealth had at the time of its purchase. LPL has seen hundreds of advisors leave for other firms following the purchase.
But Steinmeier again confirmed Thursday that he and his colleagues are confident LPL will achieve its asset-retention goals.
“We are pleased that many [advisors] are deciding to stay with Commonwealth,” he said. “In terms of asset retention, we are in the mid-80s today, and we continue to track toward our target of 90% retention.”
LPL also reported Thursday that its asset inflows from recruiting were down 55% year over year to $17 billion in the first quarter. LPL reported it brought in $83 billion in client assets from recruiting over the past year.
“We continue to expect the pull-through to improve over the course of the year, supporting improved organic growth,” Steinmeier said. “In our traditional markets, we added approximately $15 billion in assets during Q1 as we improved on our already industry-leading capture of rates of advisors in motion.”
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Commonwealth departures contributed to headcount dip
LPL executives have acknowledged on previous calls that their efforts to retain Commonwealth advisors had taken time and energy away from their normal recruiting of advisors from rival firms. Last month, LPL announced internally that its recruiting head, Scott Posner, would be leaving in June. His responsibilities will move to “a talented team who is prepared to take on expanded roles,” said a spokesperson who confirmed the impending departure.
Chief Financial Officer Matthew Audette said Commonwealth advisor exits did weigh on LPL’s headcount in the first quarter, as did usual attrition from advisors who chose not to renew their brokerage licenses at the end of the year and to “get out of the business.” Advisors who decide to leave by that route tend to manage relatively small accounts, he said.
“So that would be something where you could have some headcount noise that really has little to no [asset] impact,” Audette said.
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LPL remains the leading recruiter among independent broker-dealers
Yet, even with the perceptions of a recruiting slowdown, LPL saw the greatest success in attracting advisors this past year among all independent broker-dealers, according to a recent “Financial Advisor Transition Report” from the recruiting firm Diamond Consultants.
Diamond, which works with third-party data firms to track departures of brokers and advisors with at least three years of industry experience, found that annual advisor exits hit a four-year high of 11,172 in 2025. LPL’s recruiting of 2,112 advisors outpaced the firm’s direct rivals Cetera Financial Group, Cambridge Investment Research and Raymond James Financial Services.
Steinmeier said Thursday that LPL is increasingly devoting its energies to recruiting advisors from wirehouse and regional firms. LPL, he said, is “capturing now 11% of the advisors in that segment in motion, up from 9% just a couple of years ago.”
“Given our strong progress with Commonwealth, we’re increasingly focusing our recruiting efforts on external opportunities,” he said. “My interpretation for us was that as we’ve gotten more and more resources back and available to talk to advisors, I see an increasing responsiveness to the value proposition that we’re putting forward in the marketplace.”
LPL has also not lost interest in growing through mergers and acquisitions. LPL announced last month that it and its affiliate firm Private Advisor Group are buying Mariner Advisor Network, a unit within the large RIA Mariner Wealth Advisors with 367 advisors and $31 billion in assets.
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Client assets, revenue and net income
Even with its dips in advisor headcount and recruited assets, LPL saw its total for client assets increase by 30% year over year to $2.3 trillion in the first quarter. Of that, $1.4 trillion was in fee-generating advisory accounts, a figure up 42% from the year-ago period. Fee-generating assets are particularly prized for their ability to produce steady streams of income.
LPL’s revenue from advisory fees and commissions was up nearly 40% year over year in the first quarter to $3.8 billion. Offsetting that was its payouts to advisors based on their revenue production, which was also up by nearly 40% to $3.32 billion. LPL reported $356.4 million in net income for the first quarter, a figure up nearly 12% year over year.
Audette said the increase in compensation costs stemmed in part from the Commonwealth purchase.
“On average, they have advisors with larger [assets under management],” he said. “So the payout is higher.”
LPL also said Thursday that it had adjusted downward the amount of annual EBITDA, or earnings before interest, taxes, depreciation and amortization, it expects to secure from the Commonwealth deal. That key performance measure declined to $410 million from $425 million.
Audette said that adjustment was the result of a decline in securities markets in the first quarter. If the current economic rebound continues, “I would expect us to be back at $425 [million],” he said.
