A stable of 85 financial advisors with $7.8B in client assets will join LPL Financial’s Institution Services arm later this year as part of BMO Financial Group’s acquisition of Bank of the West.
Between the incoming wealth management programs from Bank of the West after BMO purchased that firm for $16.3 billion and from Commerce Bank, LPL expects to add $11 billion in client assets in the second half of 2023, CEO Dan Arnold said on April 27 in a call with analysts after the firm disclosed its first-quarter results.
Profits soared by more than 150% compared to the year-ago period as the company raked in interest income and client cash yields while adding a combined $34 billion in assets from recruiting and organic growth.
The threat to regional banks amid two institutions’ failures last month “certainly would create incremental demand as we go forward” for a giant brokerage, registered investment advisory firm and custodian like LPL, Arnold said in response to an analyst’s question about large enterprises in that channel.
“It does reinforce our value proposition for enterprises and, in particular banks, that that type of disruption may be a catalyst for exploring different strategic options or alternatives for different business lines, as an example, wealth management,” Arnold said, according to a transcript by Seeking Alpha.”Our capital-light model allows us to play offense and continue to invest back in the platform in order to enhance and further differentiate our reach, and others perhaps can’t do that in these disruptive markets.”
While Ameriprise picked up a major recruit in Comerica Bank last month and Advisor Group acquired the bank-based teams of Infinex Investments in 2022, LPL has made the largest splash among institutional programs with Commerce, BMO, Financial Resources Group Investment Services, M&T Bank, CUNA Brokerage Services and People’s United Bank.
To see the key takeaways for advisors from LPL’s first-quarter earnings, scroll down the slideshow. For further reading, use the following links to coverage of its earnings for the fourth quarter, third quarter, second quarter and first quarter of 2022.