LPL Financial Holdings Inc. reported a 6.4 percent drop in earnings in 2012, but CEO Mark Casady said the company planted “the seeds for future growth” by adding 505 net new advisors and increasing client assets by 13 percent.
The increases in client assets included 80.2 percent growth in assets under custody on LPL’s registered investment advisor platform.
“The uncertain economic and political environment in 2012 led individual investors to take a cautious approach to engaging in the markets,” Casady said in a prepared statement today. “As a result, advisor productivity levels remained flat for the year and we generated moderate revenue growth of 5 percent.”
The company finished 2012 with $151.92 million in net income, or $1.37 per share, compared to $170.38, or $1.50 per share, a year earlier. The year’s earnings came on revenues of $3.66 billion, up 5.2 percent from $3.48 billion at the end of 2011.
Fourth-quarter earnings came in at $36.94 million, or 34 cents per share, compared to $39.45 million, or 35 cents per share, a year earlier. Revenue in the fourth quarter was up 13.9 percent, at $944.24 million.
Casady highlighted the fact that the company saw growth in its advisors, its advisor interactions with clients and client assets. “These activities are the seeds for future growth,” he said.
LPL Financial said it finished 2012 with 13,352 advisors, up 3.9 percent from 12,847 at the end of 2011. Of the 505 net new advisors added in 2012, 182 were recruited in the fourth quarter. The figure includes both independent financial advisors and advisors at financial institutions that are licensed to do business with LPL’s broker-dealer subsidiary, according to the company.
Advisory and brokerage client assets were at $373.3 billion at the end of 2012, up 13 percent from $330.3 billion a year earlier. The growth was partly driven by a 20.2 percent increase in assets on the company’s fee-based platforms, which went from $101.6 billion to $122.1 billion at the end of 2012. Net new advisory assets—assets that discount market movement—were $10.9 billion for the year, up 8.9 percent from 2011.
“Growth in advisory assets was driven by strong new business development and a mix shift toward advisory business,” the company stated in a press release.
The company’s board of directors also declared a cash dividend of $0.135 per share of common stock, payable on March 4 to all shareholders of record on February 18.