LPL Financial, the nation’s largest independent broker-dealer (IBD), enjoyed record earnings growth during the first quarter of 2020, the company reported yesterday in a news release.

While the economic impact of the COVID-19 pandemic left the S&P 500 Index reeling, down 9% year-over-year, LPL itself enjoyed robust growth, advancing 7% year-over-year to a $1.92 earnings per share during the same quarter. Net income was up slightly to $156 million year-over-year.

The company not only grew profits, but client assets, which rose 3% year-over year to $322 billion, while net new brokerage assets were flat for the quarter. The results are yet another emerging indicator of how uneven corporate America's results are likely to be in a pandemic-ridden economy. Many technology companies, as well as some health care and consumer staples concerns, are reporting strong results, while other industries like retailing, airlines and hotels are practically shut down.

Part of the reason for LPL's impressive numbers is that the big IBD has been taking market share from rivals. LPL continued to attract new talent, recruiting 299 new advisors during Q1 2020 and 574 year-over-year, bringing its total advisor count to 16,763. New advisors joining LPL brought $8.4 billion in client assets to the firm. Client cash balances as a percentage of total assets increased 7.1%, up from 4.4% in Q4 2019.

The company says it expects to continue its 2020's first quarter momentum into the second quarter as well. LPL has been spending heavily on recruiting and has completely turned around its image in the three years. In 2017, it acquired National Planning Holdings four IBDs and experienced difficulty onboarding them.

The result was an exodus of reps that led to a period of self-examination. Yet the company's new CEO Dan Arnold addressed the problems and LPL's shares climbed spectacularly. The surge in its valuation gave the firm increased confidence to invest and recruit aggressively.

At the end of April, LPL signed an agreement to acquire Lucia Securities LLC, a San Diego-based broker-dealer and registered investment advisor firm with 20 advisors and approximately $20 billion in client assets under management (AUM). The transaction is structured as an asset purchase agreement and is expected to close in the second half of 2020.

LPL said in a news release announcing the deal that it expects to realize a profit from the acquisition at about six times its transaction cost.

"Over the past several years, we have built a strong and resilient operating platform with differentiated capabilities and service that positioned us in a place of strength to serve our advisors and their clients," Arnold said in the news release. "As we factor in the impact of the current climate, we see even bigger opportunity ahead and are well-positioned to support advisors in the marketplace…and to create long-term shareholder value."

Founded in 1989, LPL Financial is headquartered in Ft. Mill, S.C., San Diego and Boston.