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Lpl Financial Holdings Inc   (LPLA)
Other Ticker:  
 
    Sector  Financial    Industry Investment Services
   Industry Investment Services
   Sector  Financial
 



 

What are Lpl Financial Holdings Inc's Business Segments?



We do not manufacture any financial products. Instead, we provide our advisors with open architecture access to a broad range of commission, fee-based, cash, and money market products and services. Our product due diligence group conducts diligence on substantially all of our product offerings. Our platform provides access to approximately 795 product providers that offer the following product lines:
• Insurance Based Products

• Alternative Investments
• Structured Products

• Mutual Funds
• Separately Managed Accounts

• Exchange Traded Products
• Unit Investment Trusts

• Retirement Plan Products
• Annuities


The sales and administration of these products are facilitated through our technology solutions that allow our advisors to access client accounts, product information, asset allocation models, investment recommendations, and economic insight as well as to perform trade execution.

Commission-Based Products
Commission-based products are those for which we and our advisors receive an upfront commission and, for certain products, a trailing commission, or a mark-up or mark-down. Our brokerage offerings include variable and fixed annuities, mutual funds, equities, alternative investments such as non-traded real estate investment trusts and business development companies, retirement and 529 education savings plans, fixed income, and insurance.

Fee-Based Advisory Platforms and Support
LPL Financial has various fee-based advisory platforms that provide centrally managed or customized solutions from which advisors can choose to meet the investment needs of their mass affluent clients and high-net-worth clients. The fee structure enables our advisors to provide their clients with higher levels of service, while establishing a recurring revenue stream for the advisor and for us. Our fee-based platforms provide access to no-load/load-waived mutual funds, exchange-traded funds, stocks, bonds, conservative option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities.

Cash Sweep Programs
We assist our advisors in managing their clients’ cash balances through two primary cash sweep programs depending on account type: a money market sweep vehicle involving money market fund providers and an insured bank deposit sweep vehicle.

Retirement Services
We offer retirement solutions for commission- and fee-based services that allow advisors to provide brokerage services, consultation, and advice to plan sponsors using LPL Financial. Our advisors, whether through LPL Financial or through a Hybrid RIA, serve over 32,300 retirement plans representing at least $83.0 billion in retirement plan assets. These retirement plan assets are custodied with LPL Financial or various third-party providers of retirement plan administrative services that provide us with direct reporting feeds. There are additional retirement plan assets supported by our advisors that are custodied with third-party providers that do not provide reporting feeds to us. We estimate there are over 40,000 retirement plans served by our advisors with total retirement plan assets of approximately $118.0 billion. We earn revenue from retirement plan assets that are custodied with LPL Financial and from those that are not custodied with LPL Financial, but which are serviced by advisors through LPL Financial. Accordingly, only retirement plan assets that are custodied with LPL Financial are included in our reported advisory and brokerage assets.

Other Services
We provide a number of tools and services that enable advisors to maintain and grow their practices. Through our subsidiary PTC, we provide custodial services to trusts for estates and families. Under our unique model, an advisor may provide a trust with investment management services, while administrative services for the trust are provided by PTC.

Our Financial Model
Our overall financial performance is a function of the following dynamics of our business:

Our revenues stem from diverse sources, including advisor-generated commission and advisory fees, as well as other asset-based fees from product manufacturers, omnibus, networking services, cash sweep balances, and transaction and other fees for other ancillary services that we provide. Revenues are not concentrated by advisor, product, or geography.

The largest variable component of our cost base, advisor payout percentages, is directly linked to revenues generated by our advisors.

A portion of our revenues, such as software licensing and account and client fees, are not correlated with the equity financial markets.

Our operating model is scalable and is capable of delivering expanding profit margins over time.

We have been able to operate with low capital expenditures and limited capital requirements, and as a result have generated substantial free cash flow, which we have committed to investing in our business as well as returning value to shareholders.

   

Lpl Financial Holdings Inc Tax Rate Companies within the Investment Services Industry


Business Segments Q4
Revenues
(in millions $)
Q4
Income
(in millions $)
(Dec 31 2023)
%
(Profit Margin)
Total 3,425.89 547.67 15.99 %

Growth rates by Segment Q4
Y/Y Revenue
%
(Dec 31 2023)
Q/Q Revenue
%
Q4
Y/Y Income
%
(Dec 31 2023)
Q/Q Income
%
Total 69.53 % 35.82 % 431.39 % 144.18 %

To get more information on Lpl Financial Holdings Inc's Total segment. Select each division with the arrow.


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