Lpl Financial Holdings Inc. · NASDAQ:LPLA
Lpl Financial — Investor Day (November 2022)
96 slides from Lpl Financial's investor day presentation, Nov 16, 2022
Slide 1: 2022 Investor & Analyst Day
2022 INVESTOR & ANALYST DAY November 16, 2022 LPL Financial Member Member LPL Financial FINRA/SIPC 1 FINRA/SIPC
Slide 2: Welcome & Agenda
WELCOME & AGENDA Matt Audette Chief Financial Officer LPL Financial Member Member LPL Financial FINRA/SIPC 2 FINRA/SIPC
Slide 3: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 4: Notice to Investors: Safe Harbor Statement
Notice to Investors: Safe Harbor Statement Statements in this presentation regarding LPL Financial Holdings Inc.’s (together with its subsidiaries, the “Company”) future financial and operating results, growth, priorities, business strategies, capabilities, and outlook, including forecasts and state
Slide 5: Notice to Investors: Non-GAAP Financial Measures
Notice to Investors: Non-GAAP Financial Measures Management believes that presenting certain non-GAAP financial measures by excluding or including certain items can be helpful to investors and analysts who may wish to use this information to analyze the Company’s current performance, prospects and v
Slide 6: LPL Overview
LPL Overview Mission Key Markets and Services We take care of our advisors so they can take care of their clients $1.0T+ Client Assets: 21,000+ Advisors: • Advisory: $543B • Independent Advisors: 11,800+ • Brokerage: $496B • Independent RIA: 5,700+ (~500 firms) Vision • Institutional Services: 3,500
Slide 7: We continue to drive business and financial growth
We continue to drive business and financial growth EPS prior to amortization of Organic asset growth intangible assets and acquisition Total assets have nearly doubled has increased ~3x costs* has increased ~3x Share price has increased ~5x Total Advisory and Brokerage Assets ($B) Organic Net New As
Slide 8: LPL investment highlights: significant opportunities to grow and create long-term shareholder value
LPL investment highlights: significant opportunities to grow and create long-term shareholder value 1 Industry leader with scale, structural tailwinds, and expanded addressable markets 2 Investing to enhance the advisor value proposition and drive organic growth 3 Resilient business model with natur
Slide 9: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 10: Overall Strategy
OVERALL STRATEGY Dan Arnold President & Chief Executive Officer LPL Financial Member Member LPL Financial FINRA/SIPC 10 FINRA/SIPC
Slide 11: LPL's framework for driving outperformance
LPL’s framework for driving outperformance Winning Strategy + Execution + Culture + Talent = in the Marketplace Today’s Focus 2019 Framework Added in 2022 LPL Financial Member FINRA/SIPC 11
Slide 12: Key structural trends continue to expand our market opportunity
Key structural trends continue to expand our market opportunity 1.2 Growing demand for financial advice… Growing appeal for receiving advice from a Structural trend toward Independent Model …with market volatility reinforcing the value 1 financial professional of advisors 0.8 70% Projected Growth in
Slide 13: LPL is uniquely positioned to capitalize on the opportunity in the marketplace
LPL is uniquely positioned to capitalize on the opportunity in the marketplace Singular, advisor- Industry-leading Robust, appealing Capacity and centric focus model platform commitment to invest • Singularly focused on • Reputation and • Integrated and flexible • Scaled to enable enriching and enab
Slide 14: We are redefining the independent model to create the most appealing option
We are redefining the independent model to create the most appealing option in the marketplace Solve end-to-end advisor needs The champion in the marketplace for financial advisors and enterprises: Helping them be great advisors… …and run high-performing practices Deliver differentiated capabili
Slide 15: We are providing value-added capabilities that drive our market expansion
We are providing value-added capabilities that drive our market expansion Horizontal expansion strategy Vertical integration strategy Meet advisors where they are in their practice by Deliver advisors end-to-end solutions that are providing flexible solutions to help them design the higher quality,
Slide 16: Our horizontal expansion strategy enables us to meet all 300,000 advisors
Our horizontal expansion strategy enables us to meet all 300,000 advisors where they are ~300K advisors in the 2019 2020 2021 2022 2023+ marketplace: Independent ~55K advisors Traditional independent markets Hybrid RIAs ~30K advisors Independent RIAs Enhanced RIA ~40K advisors Strategic Wealth Emplo
Slide 17: We have unlocked the ability to compete in broader markets
We have unlocked the ability to compete in broader markets Expansion of our addressable markets ($T)† Employee Channel: ~2x • As we improve our understanding of the marketplace, we have added $30 capabilities and now believe we can $27 compete for the full market $25 Market RIA: +$6 Growth • We have
Slide 18: Transforming the outsourced marketplace for enterprise wealth management
$9 Transforming the outsourced marketplace for enterprise $8 wealth management $7 Compelling value proposition… Our growing enterprise opportunity ($T)† $6 Improved Better operational Improved financial $5 risk profile efficiency outcomes $5 Market $1 growth Enhanced client Elevated market Accelerat
Slide 19: Extending our vertical integration by solving for a broad spectrum of advisor needs
Extending our vertical integration by solving for a broad spectrum of advisor needs Innovating on compelling problems Position advisors to deliver Helping advisors run historically left to advisors to solve differentiated advice to their clients thriving businesses Asset Managers LPL (B/Ds, Custodia
Slide 20: Liquidity & Succession: Our newest vertically-integrated capability
Liquidity & Succession: Our newest vertically-integrated capability for current and prospective LPL advisors Market dynamics Our solutions for liquidity & succession We purpose-built the supporting infrastructure to seamlessly • Roughly 1/3 of advisors are projected to retire from the industry onboa
Slide 21: Solving for the needs of advisors at every stage of their practice
Solving for the needs of advisors at every stage of their practice Life cycle of an advisor Value-added partner across entire life cycle Entry Growth and expansion Practice optimization Sunsetting and transition Move to independence LPL Services Affiliation models Liquidity & Succession Support advi
Slide 22: Key takeaways
Key takeaways 1 Differentiation in the advisor-mediated market – as the champion for advisors and enterprises Leveraging our horizontal and vertical expansion strategy, to provide the most appealing 2 model and offerings in the marketplace – thereby doubling our addressable market Delivering a compe
Slide 23: Question & Answers
QUESTION & ANSWERS Please wait for a microphone LPL Financial Member Member LPL Financial FINRA/SIPC 23 FINRA/SIPC
Slide 24: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 25: Break
BREAK Please return by 10:05 a.m. LPL Financial Member Member LPL Financial FINRA/SIPC 25 FINRA/SIPC
Slide 26: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 27: Business Development
BUSINESS DEVELOPMENT Rich Steinmeier Managing Director & Divisional President, Business Development LPL Financial Member Member LPL Financial FINRA/SIPC 27 FINRA/SIPC
Slide 28: We have opportunities to grow across our addressable markets
We have opportunities to grow across our addressable markets $27 Trillion Market Opportunity† Independent channel Employee channel Enterprise channel LPL LPL LPL ~8% <1% ~5% ~$10T ~$12T ~$5T Rest of Rest of Rest of market market market ~92% ~99% ~95% † Estimated market sizing based on 2021 Cerulli r
Slide 29: Advisors' movement has slowed, but our value proposition is resonating, increasing recruiting
While advisors' movement has slowed, our value proposition is resonating, resulting in increased recruiting At the same time, our pace of Industry churn has declined recruiting has increased Key growth drivers Overall industry churn (% of advisors changing firms)† Recruited assets(1) ($B) Impr
Slide 30: Recruiting has roughly tripled
Recruiting has roughly tripled Recruited AUM(1) by channel ($B) $100.0 Enterprises: Provides access to an array of investment solutions and $90.0 $89 wealth management platforms to enhance and scale their $84 business $80.0 With LPL, enterprises can provide retail clients with enhanced capabilit
Slide 31: We are a value-added partner to advisors in the independent channel
We are a value-added partner to advisors in the independent channel Independent channel ($T)† Our opportunity How we win Highly fragmented market, with Traditional independent market: ~$3T continued opportunity to capture share Raise the bar for the independent channel $10 Continue investing in di
Slide 32: Our opportunity in the employee channel has grown
Our opportunity in the employee channel has grown Employee channel ($T)† How our opportunity is evolving How we win Elevated market position with larger, Flexible models to support employee advisors $12 more sophisticated advisors Supported independence model Market Independent employee model $3
Slide 33: Our opportunity in the enterprise channel has grown
Our opportunity in the enterprise channel has grown Enterprise channel ($T)† How our opportunity is evolving How we win $7 $6 Partner to propel strategy Developed capabilities to serve a Offer innovative capabilities to assist $5 broader segment of enterprises enterprises in creating a unified wea
Slide 34: We provide a compelling value prop for enterprises to outsource their wealth business
We provide a compelling value prop for enterprises to outsource their wealth business What enterprises are looking for: Advisor success Industry-leading tools and value-add services to improve the advisor experience Drive accelerated growth Industry-leading tools to improve advisor-investor inte
Slide 35: We are the leading third-party provider to enterprises
We are the leading third-party provider to enterprises Enterprise client assets ($B) $300 $250 $21 $19 $5 $2 $200 $15 $20 $150 $32 $260 $100 $146 $50 $0 Assets CUNA M&T BMO People's Bancorp Market Other Assets as of 2018 Growth as of Q2'22 Q4’18 Market Other PF Q3’22† Growth Organic NNA † Pro-forma
Slide 36: Key learnings from recent enterprise momentum
Key learnings from recent enterprise momentum Recent wins have surfaced insights that will impact how we evolve to capture and serve this market in the future Key Learning LPL Solution Interactions are longer, more formal and have more Improve how to win in the marketplace stakeholders Reach enterpr
Slide 37: We've developed a compelling new capability for advisors seeking liquidity and succession
We’ve developed a compelling new capability for advisors seeking liquidity and / or succession Expanding market opportunity Our Liquidity & Succession capability… We’re purpose-building the supporting infrastructure to seamlessly onboard, ~1/3 of advisors are expected to retire or leave the supp
Slide 38: Our Liquidity & Succession capability is in market
Our Liquidity & Succession capability is in market, and can enhance organic growth A powerful tool to retain and attract assets Direct acquisition lifecycle example Retention and transition to the next generation Advisor looking to sunset over 2-5 years Practice in slower-growth mode; risk of sale
Slide 39: Key takeaways
Key takeaways While advisors’ movement has slowed, our value proposition is resonating, resulting in increased 1 recruiting We continue to scale our employee channel, as new capabilities have expanded our opportunity 2 to serve a broader set of advisors, including the Private Wealth markets Providin
Slide 40: Advisor & End-Client Solutions
ADVISOR & END-CLIENT SOLUTIONS Kabir Sethi Managing Director & Chief Product Officer LPL Financial Member Member LPL Financial FINRA/SIPC 40 FINRA/SIPC
Slide 41: We are extending our vertical integration by solving for a broad spectrum of advisor needs
We are extending our vertical integration by solving for a broad spectrum of advisor needs Wealth Management Ecosystem 2022 Investment / Advisory Operating End- Investor Asset Clearing/ Technology, Client Trading and and Growing client Management Custody Service, Risk Engagement Day Performance a Pr
Slide 42: We continue to invest in our industry-leading platform
We continue to invest in our industry-leading platform to deliver a deep, integrated set of capabilities Advisor and enterprises must We empower operational excellence …and we continue to invest navigate a wide range of solutions through simplicity and personalization… meaningfully to evolve our pla
Slide 43: Our strategy is to provide value-added capabilities that solve for advisors' needs
Our strategy is to provide value-added capabilities that solve for advisors’ needs and drive their success We are focused on helping our advisors… …so that we can Differentiate and win in the marketplace Attract new advisors Achieve scalability to serve more clients Retain existing advisors Operate
Slide 44: We are focused on the areas that matter most to our advisors
We are focused on the areas that matter most to our advisors Operating Wealth Management Banking & End-Client Platform Solutions Lending Capabilities Experience Flexibility of choice across Expanding options and Help advisors expand wallet Drive advisor productivity curated set of industry-
Slide 45: Our operating platform delivers industry-leading flexibility and integrated workflows
Our operating platform delivers industry-leading flexibility and integrated workflows Lead with choice and flexibility Promote optionality by integrating a broad array of third-party tools Design and deliver proprietary capabilities as needed Curated choice Guide advisors to best-fit solutions
Slide 46: Wealth management solutions empower advisors with a rapidly expanding suite of investment capabilities
Wealth management solutions empower advisors with a rapidly expanding suite of investment capabilities Deliver personalized Simplify management of Expand breadth and depth solutions to end-clients end-clients and portfolios of product set for advisors Expand SMA menu within our UMA to Help advis
Slide 47: Banking and lending capabilities expand advisors' ability to deliver comprehensive solutions
Banking and lending capabilities expand advisors’ ability to deliver a comprehensive set of solutions Banking functionality is a key consideration for We continue to invest in banking partnerships to grow wirehouse advisors… advisor wallet share Annual wirehouse AUM in motion† Credit capabilities en
Slide 48: End client experience places advisors at the center of the digital channel
End client experience places advisors at the center of the digital channel Outcomes Allow end-clients to self-serve Improve advisor productivity by empowering end-clients to Improve perform tasks better suited to self-service efficiency Onboarding Account Move Money Management Recruiting differentia
Slide 49: LPL Research enriches the quality of advice advisors provide
LPL Research enriches the quality of advice that advisors can provide to their end-clients Increase breadth and depth of Enable advisors to seamlessly Embed insights across our expertise to bring research closer distribute content to differentiate digital ecosystem allowing to the advisor, end-clien
Slide 50: How we will win
How we will win Fully integrate custody, banking, brokerage, and advisory capabilities to help our advisors operate more effectively and differentiate and win with their clients Provide industry-leading flexibility and personalized workflows to drive optimal efficiency and scalability in advisor
Slide 51: Question & Answers
QUESTION & ANSWERS Please wait for a microphone LPL Financial Member Member LPL Financial FINRA/SIPC 51 FINRA/SIPC
Slide 52: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 53: Break
BREAK Please return by 11:15 a.m. LPL Financial Member Member LPL Financial FINRA/SIPC 53 FINRA/SIPC
Slide 54: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 55: LPL Services Group
LPL SERVICES GROUP Aneri Jambusaria Executive Vice President Head of LPL Services Group LPL Financial Member Member LPL Financial FINRA/SIPC 55 FINRA/SIPC
Slide 56: Continuing our vertical integration journey
Continuing our vertical integration journey Wealth Management Ecosystem 2022 Investment / Advisory Operating End- Investor Asset Clearing/ Technology, Client Trading and and Growing client Management Custody Service, Risk Engagement Day Performance a Practice Reporting Clearing/ Operating and Client
Slide 57: The LPL Services Group helps advisors & enterprises execute on their biggest opportunities
The LPL Services Group helps advisors & enterprises execute on their biggest opportunities Deepening vertical Human-led, tech enabled Focused on... integration services Delivering great advice Adding “last mile” Making the most support for advisors out of leading and enterprises wealth technology Ru
Slide 58: From experiment to driver of organic growth
From experiment to driver of organic growth ~2,900 advisors Unique advisors ~14% of LPL LPL SERVICES advisors TODAY ~2,300 advisors Supporting a growing number of ~1,200 advisors ~4,200~ subscriptions advisors… ~500 advisors +Paraplanning (Apr) ~150 advisors +M&A Solutions +Bookkeeping (Sep) +Partia
Slide 59: Services continue to present a significant opportunity
Services continue to present a significant opportunity A big market for practice support with long-term growth potential Growing our opportunity capture $40M LPL Services Group Revenue Run-rate‡ $35M $34M $30M $28M $25M $20M $17M $15M ~$2B $10M $10M Advisor Spend $5M on Practice $2M Support† $0M 201
Slide 60: A structured approach to developing new services
A structured approach to developing new services Problem Solution Acceleration Pilot Discovery Development & Evolution What are the most Can we address this What can we learn from How can we grow compelling problems opportunity through a our customers and adoption and our advisors and service that i
Slide 61: 2022 new services spotlight
2022 new services spotlight Paraplanning Services Bookkeeping Services Partial Book Sales Our customers … expand their financial planning … streamline decisions with … create capacity by right-sizing need to… offering but not their payroll accurate and timely financial reports their practice The ser
Slide 62: Benefits to LPL's organic growth beyond incremental revenue
Benefits to LPL’s organic growth beyond incremental revenue Expanding the TAM Higher Performing Advisors Partners for the Long-Term Enabling new affiliation models More likely to 22% recommend LPL to fellow financial advisors Faster growth among 28% subscribers vs. peers Linsco by LPL AUM covered by
Slide 63: Strategic priorities for 2023
Strategic priorities for 2023 Growing customers Launching new services & evolving existing ones Generating deep, durable relationships LPL Financial Member FINRA/SIPC 63
Slide 64: Question & Answers
QUESTION & ANSWERS Please wait for a microphone LPL Financial Member Member LPL Financial FINRA/SIPC 64 FINRA/SIPC
Slide 65: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 66: Break
BREAK Please return by 11:50 a.m. LPL Financial Member Member LPL Financial FINRA/SIPC 66 FINRA/SIPC
Slide 67: Meeting Agenda
Meeting Agenda Time Presenter Topics 9:00 a.m. Matt Audette Welcome & Agenda 9:10 a.m. Dan Arnold Overall Strategy Followed by Q&A 9:55 a.m. Break 10:05 a.m. Rich Steinmeier Business Development Kabir Sethi Advisor & End-Client Solutions Followed by Q&A 11:05 a.m. Break 11:15 a.m. Aneri Jambusaria L
Slide 68: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Matt Audette Chief Financial Officer LPL Financial Member Member LPL Financial FINRA/SIPC 68 FINRA/SIPC
Slide 69: LPL investment highlights: significant opportunities to grow and create long-term shareholder value
LPL investment highlights: significant opportunities to grow and create long-term shareholder value 1 Industry leader with scale, structural tailwinds, and expanded addressable markets 2 Investing to enhance the advisor value proposition and drive organic growth 3 Resilient business model with natur
Slide 70: We are a market leader with scale advantages and industry tailwinds
1 Industry leader with scale, structural tailwinds, and expanded addressable markets We are a market leader with scale advantages and industry tailwinds Growing Demand Independent Channel Leading Share in Expanding our for Advice Gaining Share Traditional Markets Addressable Markets‡ ($T) Projected
Slide 71: We continue to expand in the Enterprise market
1 Industry leader with scale, structural tailwinds, and expanded addressable markets We continue to expand in the Enterprise market Organic NNA has driven the majority Our growing enterprise opportunity Our value drivers of Enterprise asset growth Initially, we focused on financial institutions as
Slide 72: We are advancing our capabilities to enhance our advisor value proposition and drive growth
2 Investing to enhance the advisor value proposition and drive organic growth We are advancing our capabilities to enhance our advisor value proposition and drive growth Investment areas of focus Increasing overall investment levels to drive organic growth… Annual Core G&A* ($M) Annual Core G&A* Gro
Slide 73: We continued to drive solid organic growth with a net new asset growth rate of ~9%
2 Investing to enhance the advisor value proposition and drive organic growth We continued to drive solid organic growth with a net new asset growth rate of ~9% for the past year Total Organic Net New Assets(7) ($B) Organic Net New Advisory Assets(8) ($B) Organic Net New Brokerage Assets(8) ($B) O
Slide 74: We provide a range of services to advisors, strengthening their business while enhancing our returns
2 Investing to enhance the advisor value proposition and drive organic growth We provide a range of services to advisors, strengthening their business while enhancing our returns We have seen a favorable mix shift in our platforms Key points Brokerage: Asset growth is driven by Enterprises, Servic
Slide 75: We benefit from rising market levels and interest rates, with natural hedges
3 Resilient business model with natural hedges to market volatility We benefit from rising market levels and interest rates, and our business model has natural hedges to market volatility Annual Gross Profit* Impact Market Levels (S&P 500) Rising market levels drive growth in assets and ~$10M Macro
Slide 76: Our cash sweep program remains strong, supported by CCA overflow
3 Resilient business model with natural hedges to market volatility Our cash sweep program remains strong, further supported by the introduction of CCA overflow Client Cash Balances(14) ($B) Our client cash balances are largely operational Client Cash percent of Total Assets $66.8 Client Cash Balanc
Slide 77: We are well positioned to benefit from rising interest rates
3 Resilient business model with natural hedges to market volatility We are well positioned to benefit from rising interest rates Client Cash Balances(14) ($B) Annual potential Gross Profit* benefit from rising interest rates ICA Sweep (EOP) DCA Sweep (EOP) Money Market Sweep (EOP) Over the l
Slide 78: As we look ahead to 2023, the environment is creating an opportunity to accelerate investments
4 Disciplined expense management driving operating leverage As we look ahead to 2023, the environment is creating an opportunity to accelerate investments to advance our strategic priorities Our long-term cost strategy is unchanged Initial 2023 Core G&A* considerations Deliver operating leverage i
Slide 79: Our capital management strategy is focused on driving growth and maximizing shareholder value
5 Capital light business model with flexible allocation framework Our capital management strategy is focused on driving growth and maximizing shareholder value Our capital management principles Dynamic capital allocation framework Disciplined capital management to drive long-term shareholder value
Slide 80: We're delivering new liquidity and succession capabilities for advisors seeking to transition
5 Capital light business model with flexible allocation framework We’re delivering new liquidity and succession capabilities for advisors seeking to transition Background: Solving a need in the marketplace Building foothold in marketplace… ~1/3 of advisors are expected to retire or leave the indus
Slide 81: Due to our improved earnings profile, we lowered our target leverage range
5 Capital light business model with flexible allocation framework Due to our improved earnings profile, we lowered our target leverage range Repositioning due to improved earnings profile Leverage Ratio(2) Continued growth, combined with an improved interest rate Updated Management Prior Managemen
Slide 82: We have continued to return capital to shareholders
5 Capital light business model with flexible allocation framework We have continued to return capital to shareholders Share Repurchases and Dividends ($M) Share Repurchases Dividends Q4 Planned Share Repurchases Repurchased >10% of Q4 Planned Dividends shares over 2018-2019 $583 $506 Capital dep
Slide 83: New $2 billion share repurchase authorization to be completed over ~2 years
5 Capital light business model with flexible allocation framework We recently announced a new $2 billion share repurchase authorization to be completed over ~2 years Share Repurchases Key commentary Authorization Repurchase Authorization represents ~10% of our market We recently announced a new sh
Slide 84: We see potential for consolidation given fragmented markets
5 Capital light business model with flexible allocation framework We see potential for consolidation given fragmented markets Addressable markets Growth potential from consolidation Traditional Markets† Our scale, capabilities, and economics give us competitive advantages in M&A in independent mar
Slide 85: Recent acquisitions have added scale, new markets and new capabilities
5 Capital light business model with flexible allocation framework Recent acquisitions† have added scale in our traditional markets, accelerated our expansion into new markets, and added new capabilities Traditional Markets New Markets Capabilities 2021 2020 2020 2019 2022 2020 ~$74B of assets transf
Slide 86: As we continue to invest and increase our scale, we enhance our ability to drive further growth
As we continue to invest and increase our scale, we enhance our ability to drive further growth Invest in Attract assets differentiated and advisors, capabilities and a and benefit from unique advisor greater use of experience our services Long-term Shareholder Value Remain disciplined on expenses a
Slide 87: We remain well positioned to drive shareholder value
We remain well positioned to drive shareholder value 1 Our addressable markets have roughly doubled since last Investor Day We have expanded the enterprise opportunity, creating a new market for enterprises to 2 outsource their wealth management offering 3 We have introduced liquidity and succession
Slide 88: Question & Answers
QUESTION & ANSWERS Please wait for a microphone LPL Financial Member Member LPL Financial FINRA/SIPC 88 FINRA/SIPC
Slide 89: Closing Remarks
CLOSING REMARKS Matt Audette Chief Financial Officer LPL Financial Member Member LPL Financial FINRA/SIPC 89 FINRA/SIPC
Slide 90: Our financial strength has reached new heights as we continue to execute on our strategy
Our financial strength has reached new heights as we continue to execute on our strategy EPS prior to amortization of Organic asset growth intangible assets and acquisition Total assets have nearly doubled has increased ~3x costs* has increased ~3x Share price has increased ~5x Total Advisory and Br
Slide 91: Thank You
THANK YOU LPL Financial Member Member LPL Financial FINRA/SIPC 91 FINRA/SIPC
Slide 92: Appendix
APPENDIX LPL Financial Member Member LPL Financial FINRA/SIPC 92 FINRA/SIPC
Slide 93: Reconciliation
Reconciliation Gross Profit* Gross profit* is a non-GAAP financial measure. Please see a description of gross profit under “Non-GAAP Financial Measures” on page 5 of this presentation for additional information. Below is a calculation of gross profit* for the periods presented herein: $ in millions
Slide 94: Reconciliation
Reconciliation EPS prior to amortization of intangible assets and acquisition costs* and Adjusted Net Income* EPS prior to amortization of intangible assets and acquisition costs* and adjusted net income* are non-GAAP financial measures. Please see a description of EPS prior to amortization of intan
Slide 95: Reconciliation
Reconciliation Core G&A* to Total expense Core G&A* is a non-GAAP financial measure. Please see a description of Core G&A* under “Non-GAAP Financial Measures” on page 5 of this presentation for additional information. Below is a reconciliation of total expense to Core G&A* and of Core G&A, prior to
Slide 96: Endnotes
Endnotes (1) Represents the estimated total advisory and brokerage assets expected to transition to the Company’s broker-dealer subsidiary, LPL Financial LLC (“LPL Financial”), associated with advisors who transferred their licenses to LPL Financial during the period. The estimate is based on prior
LPL Financial Holdings — Investor Day (November 2022) on 6ix