LPLA LPL Financial Holdings Inc

LPL Financial Holdings Inc. (Nasdaq: LPLA) (the "Company") today announced results for its third quarter ended September 30, 2024, reporting net income of $255 million or $3.39 per share. This compares with $224 million, or $2.91 per share, in the third quarter of 2023 and $244 million, or $3.23 per share, in the prior quarter.

"I joined LPL with the mandate to accelerate our growth, and for the past six years, have worked closely with Matt Audette and the rest of our leadership team, to set our strategic vision, and to build and execute on the plan to achieve that vision," said Rich Steinmeier, CEO. "Looking forward, our opportunity is clear – to assert our leadership and shape both the advisor and institutional markets. Our focus is on creating the culture, workplace environment, and capabilities, to achieve sustainable outperformance through becoming an indispensable partner to our advisors and institutions, while delivering long-term value to shareholders."

"We’re operating from a position of strength with a leadership team that is focused on supporting our advisors’ success through innovative solutions," said Matt Audette, President and CFO. "In my expanded role, I look forward to the opportunity to help extend our leadership position in the advisor-mediated markets and to enhance value for our shareholders. Specific to the third quarter, we delivered strong organic growth in both our traditional and new markets. As a complement, we announced our acquisition of The Investment Center, and early in the fourth quarter we closed our acquisition of Atria. As we look ahead, we remain excited by the opportunities we have to serve and support our advisors, while continuing to deliver an industry leading value proposition."

Dividend Declaration

The Company's Board of Directors declared a $0.30 per share dividend to be paid on December 2, 2024 to all stockholders of record as of November 14, 2024.

Conference Call and Additional Information

The Company will hold a conference call to discuss its results at 5:00 p.m. ET on Wednesday, October 30, 2024. The conference call will be accessible and available for replay at investor.lpl.com/events.

Contacts

Investor Relationsinvestor.relations@lplfinancial.com

Media Relationsmedia.relations@lplfinancial.com

About LPL Financial

LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve(5), serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 registered investment advisor ("RIA") firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional. At LPL, independence means that advisors and institution leaders have the freedom they deserve to choose the business model, services, and technology resources that allow them to run a thriving business. They have the flexibility to do business their way. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors and institutions, so they can take care of their clients.

Securities and Advisory services offered through LPL Financial LLC ("LPL Financial"), a registered investment advisor. Member FINRA/SIPC. LPL Financial and its affiliated companies provide financial services only from the United States.

Throughout this communication, the terms "financial advisors" and "advisors" are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.

We routinely disclose information that may be important to shareholders in the "Investor Relations" or "Press Releases" section of our website.

Forward-Looking Statements

This press release contains statements regarding:

• the amount and timing of the onboarding of acquired, recruited or transitioned brokerage and advisory assets, including Atria, Prudential and The Investment Center;
• the Company's future financial and operating results, growth, plans, priorities and business strategies, including forecasts and statements related to the Company's core G&A expenses; and
• future capabilities, future advisor service experience, future investments and capital deployment, including share repurchase activity and dividends, if any, and long-term shareholder value.

These and any other statements that are not related to present facts or current conditions, or that are not purely historical, constitute forward-looking statements. They reflect the Company's expectations and objectives as of October 30, 2024 and are not guarantees that expectations or objectives expressed or implied will be achieved. The achievement of such expectations and objectives involves risks and uncertainties that may cause actual results, levels of activity or the timing of events to differ materially from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include:

• the failure to satisfy the closing conditions applicable to the Company's strategic relationship agreement with Prudential, or the Company's purchase agreement with The Investment Center, including regulatory approvals;
• difficulties and delays in onboarding the assets of acquired, recruited or transitioned advisors, including the receipt and timing of regulatory approvals that may be required;
• disruptions in the businesses of the Company that could make it more difficult to maintain relationships with advisors and their clients;
• the choice by clients of acquired or recruited advisors not to open brokerage and/or advisory accounts at the Company;
• changes in general economic and financial market conditions, including retail investor sentiment;
• changes in interest rates and fees payable by banks participating in the Company's client cash programs, including the Company's success in negotiating agreements with current or additional counterparties;
• the Company's strategy and success in managing client cash program fees;
• fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenue;
• effects of competition in the financial services industry and the success of the Company in attracting and retaining financial advisors and institutions, and their ability to provide financial products and services effectively;
• whether the retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company;
• changes in the growth and profitability of the Company's fee-based offerings and asset-based revenues;
• the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations;
• the cost of defending, settling and remediating issues related to regulatory matters or legal proceedings, including civil monetary penalties or actual costs of reimbursing customers for losses in excess of our reserves or insurance;
• changes made to the Company’s services and pricing, including in response to competitive developments and current, pending and future legislation, regulation and regulatory actions, and the effect that such changes may have on the Company’s gross profit streams and costs;
• execution of the Company's capital management plans, including its compliance with the terms of the Company's amended and restated credit agreement, the committed revolving credit facilities of the Company and LPL Financial, and the indentures governing the Company's senior unsecured notes;
• strategic acquisitions and investments, including pursuant to the Company’s Liquidity & Succession solution, and the effect that such acquisitions and investments may have on the Company’s capital management plans and liquidity;
• the price, availability and trading volumes of shares of the Company's common stock, which will affect the timing and size of future share repurchases by the Company, if any;
• the execution of the Company's plans and its success in realizing the synergies, expense savings, service improvements or efficiencies expected to result from its investments, initiatives and acquisitions, expense plans and technology initiatives;
• whether advisors affiliated with Atria, Prudential, and The Investment Center will transition registration to the Company and whether assets reported as serviced by such financial advisors will translate into assets of the Company;
• the performance of third-party service providers to which business processes have been transitioned;
• the Company's ability to control operating risks, information technology systems risks, cybersecurity risks and sourcing risks; and
• the other factors set forth in the Company's most recent Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or other filings with the Securities and Exchange Commission. 

Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this earnings release, and you should not rely on statements contained herein as representing the Company's view as of any date subsequent to the date of this press release.

LPL Financial Holdings Inc.Condensed Consolidated Statements of Income(In thousands, except per share data)(Unaudited)
	Three Months Ended										Three Months Ended
	September 30,				June 30,						September 30,
	2024				2024				Change		2023				Change
REVENUE
Advisory	$	1,378,050			$	1,288,163			7	%	$	1,081,562			27	%
Commission:
Sales-based		429,132				423,070			1	%		311,792			38	%
Trailing		377,400				363,976			4	%		331,808			14	%
Total commission		806,532				787,046			2	%		643,600			25	%
Asset-based:
Client cash		353,855				341,475			4	%		360,518			(2	%)
Other asset-based		272,336				259,533			5	%		224,614			21	%
Total asset-based		626,191				601,008			4	%		585,132			7	%
Service and fee		145,729				135,000			8	%		135,648			7	%
Transaction		58,546				58,935			(1	%)		50,210			17	%
Interest income, net		49,923				47,478			5	%		40,773			22	%
Other		43,423				14,139			n/m			(14,542	)		n/m
Total revenue		3,108,394				2,931,769			6	%		2,522,383			23	%
EXPENSE
Advisory and commission		1,948,065				1,819,027			7	%		1,488,432			31	%
Compensation and benefits		266,415				274,000			(3	%)		243,759			9	%
Promotional		164,538				136,125			21	%		131,645			25	%
Depreciation and amortization		78,338				70,999			10	%		64,627			21	%
Occupancy and equipment		69,879				69,529			1	%		61,339			14	%
Interest expense on borrowings		67,779				64,341			5	%		48,363			40	%
Amortization of other intangibles		32,461				30,607			6	%		27,760			17	%
Brokerage, clearing and exchange		29,636				32,984			(10	%)		24,793			20	%
Professional services		26,295				22,100			19	%		18,699			41	%
Communications and data processing		17,916				19,406			(8	%)		19,634			(9	%)
Other		59,724				62,580			(5	%)		75,660			(21	%)
Total expense		2,761,046				2,601,698			6	%		2,204,711			25	%
INCOME BEFORE PROVISION FOR INCOME TAXES		347,348				330,071			5	%		317,672			9	%
PROVISION FOR INCOME TAXES		92,045				86,271			7	%		93,381			(1	%)
NET INCOME	$	255,303			$	243,800			5	%	$	224,291			14	%
EARNINGS PER SHARE
Earnings per share, basic	$	3.41			$	3.26			5	%	$	2.95			16	%
Earnings per share, diluted	$	3.39			$	3.23			5	%	$	2.91			16	%
Weighted-average shares outstanding, basic		74,776				74,725			—	%		76,062			(2	%)
Weighted-average shares outstanding, diluted		75,405				75,548			—	%		77,147			(2	%)

LPL Financial Holdings Inc.Condensed Consolidated Statements of Income(In thousands, except per share data)(Unaudited)
	Nine Months Ended
	September 30,
	2024				2023				Change
REVENUE
Advisory	$	3,866,024			$	3,050,184			27	%
Commission:
Sales-based		1,237,437				896,825			38	%
Trailing		1,102,587				973,386			13	%
Total commission		2,340,024				1,870,211			25	%
Asset-based:
Client cash		1,047,712				1,157,208			(9	%)
Other asset-based		780,208				639,387			22	%
Total asset-based		1,827,920				1,796,595			2	%
Service and fee		412,901				377,757			9	%
Transaction		174,739				146,081			20	%
Interest income, net		140,926				116,103			21	%
Other		110,222				52,088			112	%
Total revenue		8,872,756				7,409,019			20	%
EXPENSE
Advisory and commission		5,500,579				4,307,829			28	%
Compensation and benefits		814,784				708,972			15	%
Promotional		427,282				332,433			29	%
Depreciation and amortization		216,495				179,058			21	%
Occupancy and equipment		205,672				186,517			10	%
Interest expense on borrowings		192,202				132,389			45	%
Brokerage, clearing and exchange		93,152				80,067			16	%
Amortization of other intangibles		92,620				78,593			18	%
Professional services		61,674				51,011			21	%
Communications and data processing		57,066				57,903			(1	%)
Other		159,619				143,259			11	%
Total expense		7,821,145				6,258,031			25	%
INCOME BEFORE PROVISION FOR INCOME TAXES		1,051,611				1,150,988			(9	%)
PROVISION FOR INCOME TAXES		263,744				302,293			(13	%)
NET INCOME	$	787,867			$	848,695			(7	%)
EARNINGS PER SHARE
Earnings per share, basic	$	10.55			$	10.97			(4	%)
Earnings per share, diluted	$	10.45			$	10.82			(3	%)
Weighted-average shares outstanding, basic		74,688				77,339			(3	%)
Weighted-average shares outstanding, diluted		75,424				78,439			(4	%)

LPL Financial Holdings Inc.Condensed Consolidated Statements of Financial Condition(In thousands, except share data)(Unaudited)
	September 30, 2024				June 30, 2024				December 31, 2023
ASSETS
Cash and equivalents	$	1,474,954			$	1,318,894			$	465,671
Cash and equivalents segregated under federal or other regulations		1,382,867				1,530,150				2,007,312
Restricted cash		104,881				109,618				108,180
Receivables from clients, net		622,015				563,923				588,585
Receivables from brokers, dealers and clearing organizations		53,763				74,432				50,069
Advisor loans, net		1,913,363				1,757,727				1,479,690
Other receivables, net		802,186				763,632				743,317
Investment securities ($94,694, $73,463 and $76,088 at fair value at September 30, 2024, June 30, 2024 and December 31, 2023, respectively)		111,096				89,853				91,311
Property and equipment, net		1,144,676				1,066,395				933,091
Goodwill		1,868,193				1,860,062				1,856,648
Other intangibles, net		782,426				783,031				671,585
Other assets		1,681,455				1,586,010				1,390,021
Total assets	$	11,941,875			$	11,503,727			$	10,385,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Client payables	$	2,039,140			$	1,963,988			$	2,266,176
Payables to brokers, dealers and clearing organizations		211,054				212,394				163,337
Accrued advisory and commission expenses payable		252,881				240,370				216,541
Corporate debt and other borrowings, net		4,441,913				4,442,840				3,734,111
Accounts payable and accrued liabilities		485,927				461,277				485,963
Other liabilities		1,739,209				1,667,511				1,440,373
Total liabilities		9,170,124				8,988,380				8,306,501
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,779,259, 130,746,590 shares and 130,233,328 shares issued at September 30, 2024, June 30, 2024 and December 31, 2023, respectively		131				131				130
Additional paid-in capital		2,059,207				2,038,216				1,987,684
Treasury stock, at cost — 55,968,552, 55,985,188 shares and 55,576,970 shares at September 30, 2024, June 30, 2024 and December 31, 2023, respectively		(4,102,319	)			(4,101,955	)			(3,993,949	)
Retained earnings		4,814,732				4,578,955				4,085,114
Total stockholders’ equity		2,771,751				2,515,347				2,078,979
Total liabilities and stockholders’ equity	$	11,941,875			$	11,503,727			$	10,385,480

LPL Financial Holdings Inc.Management's Statements of Operations(In thousands, except per share data)(Unaudited)

Certain information in this release is presented as reviewed by the Company’s management and includes information derived from the Company’s unaudited condensed consolidated statements of income, non-GAAP financial measures and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures" in this release.

	Quarterly Results
	Q3 2024				Q2 2024				Change			Q3 2023				Change
Gross Profit(6)
Advisory	$	1,378,050			$	1,288,163			7	%		$	1,081,562			27	%
Trailing commissions		377,400				363,976			4	%			331,808			14	%
Sales-based commissions		429,132				423,070			1	%			311,792			38	%
Advisory fees and commissions		2,184,582				2,075,209			5	%			1,725,162			27	%
Production-based payout(7)		(1,910,634	)			(1,812,050	)		5	%			(1,506,080	)		27	%
Advisory fees and commissions, net of payout		273,948				263,159			4	%			219,082			25	%
Client cash(8)		372,333				361,316			3	%			377,782			(1	%)
Other asset-based(9)		272,336				259,533			5	%			224,614			21	%
Service and fee		145,729				135,000			8	%			135,648			7	%
Transaction		58,546				58,935			(1	%)			50,210			17	%
Interest income, net(10)		31,428				27,618			14	%			23,485			34	%
Other revenue(11)		3,392				6,621			(49	%)			4,113			(18	%)
Total net advisory fees and commissions and attachment revenue		1,157,712				1,112,182			4	%			1,034,934			12	%
Brokerage, clearing and exchange expense		(29,636	)			(32,984	)		(10	%)			(24,793	)		20	%
Gross Profit(6)		1,128,076				1,079,198			5	%			1,010,141			12	%
G&A Expense
Core G&A(12)		359,134				370,912			(3	%)			341,728			5	%
Regulatory charges(13)		24,879				7,594			n/m				48,083			(48	%)
Promotional (ongoing)(14)(15)		175,605				147,830			19	%			140,171			25	%
Acquisition costs(15)		22,243				36,876			(40	%)			5,989			n/m
Employee share-based compensation		20,289				19,968			2	%			15,748			29	%
Total G&A		602,150				583,180			3	%			551,719			9	%
EBITDA(16)		525,926				496,018			6	%			458,422			15	%
Depreciation and amortization		78,338				70,999			10	%			64,627			21	%
Amortization of other intangibles		32,461				30,607			6	%			27,760			17	%
Interest expense on borrowings		67,779				64,341			5	%			48,363			40	%
INCOME BEFORE PROVISION FOR INCOME TAXES		347,348				330,071			5	%			317,672			9	%
PROVISION FOR INCOME TAXES		92,045				86,271			7	%			93,381			(1	%)
NET INCOME	$	255,303			$	243,800			5	%		$	224,291			14	%
Earnings per share, diluted	$	3.39			$	3.23			5	%		$	2.91			16	%
Weighted-average shares outstanding, diluted		75,405				75,548			—	%			77,147			(2	%)
Adjusted EBITDA(16)	$	566,169			$	532,894			6	%		$	504,411			12	%
Adjusted EPS(17)	$	4.16			$	3.88			7	%		$	3.74			11	%

LPL Financial Holdings Inc.Operating Metrics(Dollars in billions, except where noted)(Unaudited)
	Q3 2024				Q2 2024				Change			Q3 2023				Change
Market Drivers
S&P 500 Index (end of period)		5,762				5,460			6	%			4,288			34	%
Russell 2000 Index (end of period)		2,230				2,048			9	%			1,785			25	%
Fed Funds daily effective rate (average bps)		527				533			(6bps)				526			1bps
Advisory and Brokerage Assets(18)
Advisory assets	$	892.0			$	829.1			8	%		$	662.7			35	%
Brokerage assets		700.1				668.7			5	%			575.7			22	%
Total Advisory and Brokerage Assets	$	1,592.1			$	1,497.8			6	%		$	1,238.4			29	%
Advisory as a % of Total Advisory and Brokerage Assets		56.0	%			55.4	%		60bps				53.5	%		250bps
Assets by Platform
Corporate advisory assets(19)	$	618.8			$	567.8			9	%		$	444.4			39	%
Independent RIA advisory assets(19)		273.2				261.3			5	%			218.3			25	%
Brokerage assets		700.1				668.7			5	%			575.7			22	%
Total Advisory and Brokerage Assets	$	1,592.1			$	1,497.8			6	%		$	1,238.4			29	%
Centrally Managed Assets
Centrally managed assets(20)	$	138.1			$	126.9			9	%		$	100.5			37	%
Centrally Managed as a % of Total Advisory Assets		15.5	%			15.3	%		20bps				15.2	%		30bps

LPL Financial Holdings Inc.Operating Metrics(Dollars in billions, except where noted)(Unaudited)
	Q3 2024				Q2 2024				Change		Q3 2023				Change
Organic Net New Assets (NNA)(21)
Organic net new advisory assets	$	23.2			$	26.6			n/m		$	22.7			n/m
Organic net new brokerage assets		3.8				2.5			n/m			10.5			n/m
Total Organic Net New Assets	$	27.0			$	29.0			n/m		$	33.2			n/m
Acquired Net New Assets(21)
Acquired net new advisory assets	$	0.5			$	0.3			n/m		$	—			n/m
Acquired net new brokerage assets		0.1				4.8			n/m			—			n/m
Total Acquired Net New Assets	$	0.6			$	5.0			n/m		$	—			n/m
Total Net New Assets(21)
Net new advisory assets	$	23.7			$	26.8			n/m		$	22.7			n/m
Net new brokerage assets		3.8				7.2			n/m			10.5			n/m
Total Net New Assets	$	27.5			$	34.0			n/m		$	33.2			n/m
Net brokerage to advisory conversions(22)	$	3.5			$	3.7			n/m		$	2.7			n/m
Organic advisory NNA annualized growth(23)		11.2	%			13.4	%		n/m			13.7	%		n/m
Total organic NNA annualized growth(23)		7.2	%			8.1	%		n/m			10.7	%		n/m
Net New Advisory Assets(21)
Corporate RIA net new advisory assets	$	24.0			$	23.4			n/m		$	17.0			n/m
Independent RIA net new advisory assets		(0.3	)			3.4			n/m			5.7			n/m
Total Net New Advisory Assets	$	23.7			$	26.8			n/m		$	22.7			n/m
Centrally managed net new advisory assets(21)	$	4.4			$	4.4			n/m		$	4.4			n/m
Net buy (sell) activity(24)	$	37.7			$	39.3			n/m		$	35.6			n/m

Note: Totals may not foot due to rounding.

LPL Financial Holdings Inc.Client Cash Data(Dollars in thousands, except where noted)(Unaudited)
	Q3 2024				Q2 2024				Change			Q3 2023				Change
Client Cash Balances (in billions)(25)
Insured cash account sweep	$	32.1			$	31.0			4	%		$	33.6			(4	%)
Deposit cash account sweep		9.6				9.2			4	%			9.1			5	%
Total Bank Sweep		41.7				40.2			4	%			42.7			(2	%)
Money market sweep		2.3				2.3			—	%			2.6			(12	%)
Total Client Cash Sweep Held by Third Parties		44.0				42.5			4	%			45.3			(3	%)
Client cash account (CCA)(26)		1.8				1.5			20	%			1.5			20	%
Total Client Cash Balances	$	45.8			$	44.0			4	%		$	46.9			(2	%)
Client Cash Balances as a % of Total Assets		2.9	%			2.9	%		—bps				3.8	%		(90bps)

Note: Totals may not foot due to rounding.

	Three Months Ended
	September 30, 2024								June 30, 2024								September 30, 2023
Interest-Earnings Assets	Average Balance(in billions)			Revenue			Net Yield (bps)(27)		Average Balance(in billions)			Revenue			Net Yield (bps)(27)		Average Balance(in billions)			Revenue			Net Yield (bps)(27)
Insured cash account sweep	$	31.1		$	259,503		332		$	31.7		$	250,804		318		$	34.5		$	276,944		318
Deposit cash account sweep		9.2			92,765		400			9.0			89,070		399			9.1			81,826		357
Total Bank Sweep		40.3			352,268		348			40.7			339,874		336			43.6			358,770		326
Money market sweep		2.3			1,587		28			2.3			1,601		28			2.4			1,748		29
Total Client Cash Held By Third Parties		42.6			353,855		330			43.0			341,475		320			46.0			360,518		311
Client cash account (CCA)(26)		1.6			18,478		472			1.7			19,841		472			1.5			17,264		454
Total Client Cash		44.2			372,333		335			44.7			361,316		326			47.5			377,782		315
Margin receivables		0.5			11,199		885			0.5			10,521		889			0.5			10,740		883
Other interest revenue		1.5			20,229		533			1.3			17,097		545			0.9			12,745		576
Total Client Cash and Interest Income, Net	$	46.2		$	403,761		348		$	46.5		$	388,934		337		$	48.9		$	401,267		326

Note: Totals may not foot due to rounding.

LPL Financial Holdings Inc.Monthly Metrics(Dollars in billions, except where noted)(Unaudited)
	September 2024			August 2024			Change		July 2024			June 2024
Advisory and Brokerage Assets(18)
Advisory assets	$	892.0		$	869.5		3	%	$	850.6		$	829.1
Brokerage assets		700.1			690.6		1	%		678.7			668.7
Total Advisory and Brokerage Assets	$	1,592.1		$	1,560.1		2	%	$	1,529.3		$	1,497.8
Organic Net New Assets (NNA)(21)
Organic net new advisory assets	$	11.0		$	5.4		n/m		$	6.8		$	9.2
Organic net new brokerage assets		0.5			1.1		n/m			2.2			1.6
Total Organic Net New Assets	$	11.4		$	6.6		n/m		$	9.0		$	10.8
Acquired Net New Assets(21)
Acquired net new advisory assets	$	0.2		$	0.2		n/m		$	—		$	—
Acquired net new brokerage assets		0.1			—		n/m			—			—
Total Acquired Net New Assets	$	0.3		$	0.3		n/m		$	—		$	—
Total Net New Assets(21)
Net new advisory assets	$	11.2		$	5.7		n/m		$	6.8		$	9.2
Net new brokerage assets		0.5			1.2		n/m			2.2			1.6
Total Net New Assets	$	11.7		$	6.8		n/m		$	9.0		$	10.8
Net brokerage to advisory conversions(22)	$	1.2		$	1.3		n/m		$	1.0		$	1.2
Client Cash Balances(25)
Insured cash account sweep	$	32.1		$	30.4		6	%	$	31.1		$	31.0
Deposit cash account sweep		9.6			9.3		3	%		9.1			9.2
Total Bank Sweep		41.7			39.7		5	%		40.2			40.2
Money market sweep		2.3			2.2		5	%		2.3			2.3
Total Client Cash Sweep Held by Third Parties		44.0			41.9		5	%		42.5			42.5
Client cash account (CCA)(26)		1.8			1.4		29	%		1.5			1.5
Total Client Cash Balances	$	45.8		$	43.3		6	%	$	44.0		$	44.0
Net buy (sell) activity(24)	$	12.2		$	12.6		n/m		$	12.9		$	12.1
Market Drivers
S&P 500 Index (end of period)		5,762			5,648		2	%		5,522			5,460
Russell 2000 Index (end of period)		2,230			2,218		1	%		2,254			2,048
Fed Funds effective rate (average bps)		513			533		(20bps)			533			533

Note: Totals may not foot due to rounding.

LPL Financial Holdings Inc.Financial Measures(Dollars in thousands, except where noted)(Unaudited)
	Q3 2024			Q2 2024			Change		Q3 2023			Change
Commission Revenue by Product
Annuities	$	481,852		$	469,100		3	%	$	371,304		30	%
Mutual funds		193,451			187,432		3	%		169,318		14	%
Fixed income		55,707			53,192		5	%		42,286		32	%
Equities		36,786			34,434		7	%		27,414		34	%
Other		38,736			42,888		(10	%)		33,278		16	%
Total commission revenue	$	806,532		$	787,046		2	%	$	643,600		25	%
Commission Revenue by Sales-based and Trailing
Sales-based commissions
Annuities	$	265,955		$	260,188		2	%	$	183,974		45	%
Mutual funds		42,310			42,981		(2	%)		34,718		22	%
Fixed income		55,707			53,192		5	%		42,286		32	%
Equities		36,786			34,434		7	%		27,414		34	%
Other		28,374			32,275		(12	%)		23,400		21	%
Total sales-based commissions	$	429,132		$	423,070		1	%	$	311,792		38	%
Trailing commissions
Annuities	$	215,897		$	208,912		3	%	$	187,330		15	%
Mutual funds		151,141			144,451		5	%		134,600		12	%
Other		10,362			10,613		(2	%)		9,878		5	%
Total trailing commissions	$	377,400		$	363,976		4	%	$	331,808		14	%
Total commission revenue	$	806,532		$	787,046		2	%	$	643,600		25	%
Payout Rate(7)		87.46	%		87.32	%	14bps			87.30	%	16bps

LPL Financial Holdings Inc.Capital Management Measures(Dollars in thousands, except where noted)(Unaudited)
	Q3 2024			Q2 2024			Q4 2023
Cash and equivalents	$	1,474,954		$	1,318,894		$	465,671
Cash at regulated subsidiaries		(992,450	)		(828,145	)		(410,313	)
Excess cash at regulated subsidiaries per the Credit Agreement		225,886			193,342			128,327
Corporate Cash(3)	$	708,390		$	684,091		$	183,685
Corporate Cash(3)
Cash at the Parent	$	435,109		$	450,505		$	26,587
Excess cash at regulated subsidiaries per the Credit Agreement		225,886			193,342			128,327
Cash at non-regulated subsidiaries		47,395			40,244			28,771
Corporate Cash	$	708,390		$	684,091		$	183,685
Leverage Ratio
Total debt	$	4,469,175		$	4,471,850		$	3,757,200
Total corporate cash		708,390			684,091			183,685
Credit Agreement Net Debt	$	3,760,785		$	3,787,759		$	3,573,515
Credit Agreement EBITDA (trailing twelve months)(28)	$	2,340,886		$	2,260,165		$	2,194,807
Leverage Ratio	1.61x			1.68x			1.63x

	September 30, 2024
Total Debt	Balance			Current ApplicableMargin	Interest Rate		Maturity
Revolving Credit Facility(a)	$	—		ABR+37.5 bps / SOFR+147.5 bps	6.321	%	5/20/2029
Broker-Dealer Revolving Credit Facility		—		SOFR+135 bps	6.310	%	5/19/2025
Senior Secured Term Loan B		1,019,175		SOFR+185 bps(b)	7.051	%	11/12/2026
Senior Unsecured Notes		500,000		5.700% Fixed	5.700	%	5/20/2027
Senior Unsecured Notes		400,000		4.625% Fixed	4.625	%	11/15/2027
Senior Unsecured Notes		750,000		6.750% Fixed	6.750	%	11/17/2028
Senior Unsecured Notes		900,000		4.000% Fixed	4.000	%	3/15/2029
Senior Unsecured Notes		400,000		4.375% Fixed	4.375	%	5/15/2031
Senior Unsecured Notes		500,000		6.000% Fixed	6.000	%	5/20/2034
Total / Weighted Average	$	4,469,175			5.661	%

(a) Secured borrowing capacity of $2.25 billion at LPL Holdings, Inc. (the "Parent").(b) The SOFR rate option is a one-month SOFR rate and subject to an interest rate floor of 0 bps.

LPL Financial Holdings Inc.Key Business and Financial Metrics(Dollars in thousands, except where noted)(Unaudited)
	Q3 2024			Q2 2024			Change		Q3 2023			Change
Advisors
Advisors		23,686			23,462		1	%		22,404		6	%
Net new advisors		224			578		(61	%)		462		(52	%)
Annualized advisory fees and commissions per advisor(29)	$	371		$	358		4	%	$	311		19	%
Average total assets per advisor ($ in millions)(30)	$	67.2		$	63.8		5	%	$	55.3		22	%
Transition assistance loan amortization ($ in millions)(31)	$	69.1		$	61.9		12	%	$	53.7		29	%
Total client accounts (in millions)		8.7			8.6		1	%		8.2		6	%
Employees		7,342			7,451		(1	%)		7,124		3	%
Services Group
Services Group subscriptions(32)
Professional Services		1,890			1,892		—	%		1,867		1	%
Business Optimizers		3,798			3,606		5	%		3,251		17	%
Planning and Advice		735			665		11	%		456		61	%
Total Services Group subscriptions		6,423			6,163		4	%		5,574		15	%
Services Group advisor count		4,340			4,169		4	%		3,695		17	%
AUM retention rate (quarterly annualized)(33)		97.0	%		98.4	%	(140bps)			98.8	%	(180bps)
Capital Management
Capital expenditures ($ in millions)(34)	$	147.1		$	128.9		14	%	$	95.0		55	%
Acquisitions, net ($ in millions)(35)	$	34.1		$	115.1		(70	%)	$	60.3		(43	%)
Share repurchases ($ in millions)	$	—		$	—		—	%	$	250.0		(100	%)
Dividends ($ in millions)		22.4			22.4		—	%		22.8		(2	%)
Total Capital Returned ($ in millions)	$	22.4		$	22.4		—	%	$	272.8		(92	%)

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 valuation. Management uses this non-GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP financial measures and metrics discussed below are appropriate for evaluating the performance of the Company.

Adjusted EPS and Adjusted net income

Adjusted EPS is defined as adjusted net income, a non-GAAP measure defined as net income plus the after-tax impact of amortization of other intangibles, acquisition costs, and certain regulatory charges, divided by the weighted average number of diluted shares outstanding for the applicable period. The Company presents adjusted net income and adjusted EPS because management believes that these metrics can provide investors with useful insight into the Company’s core operating performance by excluding non-cash items, acquisition costs, and certain regulatory charges that management does not believe impact the Company’s ongoing operations. Adjusted net income and adjusted EPS are not measures of the Company's financial performance under GAAP and should not be considered as alternatives to net income, earnings per diluted share or any other performance measure derived in accordance with GAAP. For a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS, please see the endnote disclosures in this release.

Gross profit

Gross profit is calculated as total revenue less advisory and commission expense; brokerage, clearing and exchange expense; and market fluctuations on employee deferred compensation. All other expense categories, including depreciation and amortization of property and equipment and amortization of other intangibles, are considered general and administrative in nature. Because the Company’s gross profit amounts do not include any depreciation and amortization expense, the Company considers gross profit to be a non-GAAP financial measure that may not be comparable to similar measures used by others in its industry. Management believes that gross profit can provide investors with useful insight into the Company’s core operating performance before indirect costs that are general and administrative in nature. For a calculation of gross profit, please see the endnote disclosures in this release.

Core G&A

Core G&A consists of total expense less the following expenses: advisory and commission; depreciation and amortization; interest expense on borrowings; brokerage, clearing and exchange; amortization of other intangibles; market fluctuations on employee deferred compensation; promotional (ongoing); employee share-based compensation; regulatory charges; and acquisition costs. Management presents core G&A because it believes core G&A reflects the corporate expense categories over which management can generally exercise a measure of control, compared with expense items over which management either cannot exercise control, such as advisory and commission, or which management views as promotional expense necessary to support advisor growth and retention, including conferences and transition assistance. Core G&A is not a measure of the Company’s total expense as calculated in accordance with GAAP. For a reconciliation of the Company's total expense to core G&A, please see the endnote disclosures in this release. The Company does not provide an outlook for its total expense because it contains expense components, such as advisory and commission, that are market-driven and over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for total expense to an outlook for core G&A cannot be made available without unreasonable effort.

EBITDA and Adjusted EBITDA

EBITDA is defined as net income plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles. Adjusted EBITDA is defined as EBITDA, a non-GAAP measure, plus acquisition costs and certain regulatory charges. The Company presents EBITDA and adjusted EBITDA because management believes that they can be useful financial metrics in understanding the Company’s earnings from operations. EBITDA and adjusted EBITDA are not measures of the Company's financial performance under GAAP and should not be considered as alternatives to net income or any other performance measure derived in accordance with GAAP. For a reconciliation of net income to EBITDA and adjusted EBITDA, please see the endnote disclosures in this release.

Credit Agreement EBITDA

Credit Agreement EBITDA is defined in, and calculated by management in accordance with, the Company's amended and restated credit agreement (“Credit Agreement”) as “Consolidated EBITDA,” which is Consolidated Net Income (as defined in the Credit Agreement) plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles, and is further adjusted to exclude certain non-cash charges and other adjustments, and to include future expected cost savings, operating expense reductions or other synergies from certain transactions. The Company presents Credit Agreement EBITDA because management believes that it can be a useful financial metric in understanding the Company’s debt capacity and covenant compliance under its Credit Agreement. Credit Agreement EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. For a reconciliation of net income to Credit Agreement EBITDA, please see the endnote disclosures in this release.

Endnote Disclosures

(1) Represents the estimated total advisory and brokerage assets expected to transition to the Company's primary broker-dealer subsidiary, LPL Financial, in connection with advisors who transferred their licenses to LPL Financial during the period. The estimate is based on prior business reported by the advisors, which has not been independently and fully verified by LPL Financial. The actual transition of assets to LPL Financial generally occurs over several quarters and the actual amount transitioned may vary from the estimate.

(2) The terms “Financial Advisors” and “Advisors” refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial, an SEC-registered broker-dealer and investment advisor.

(3) Corporate cash, a component of cash and equivalents, is the sum of cash and equivalents from the following: (1) cash and equivalents held at LPL Holdings, Inc., (2) cash and equivalents held at regulated subsidiaries as defined by the Company's Credit Agreement, which include LPL Financial and The Private Trust Company, N.A., in excess of the capital requirements of the Company's Credit Agreement (which, in the case of LPL Financial is net capital in excess of 10% of its aggregate debits, or five times the net capital required in accordance with Exchange Act Rule 15c3-1) and (3) cash and equivalents held at non-regulated subsidiaries.

(4) Compliance with the Leverage Ratio is only required under the Company's revolving credit facility.

(5) The Company was named Top RIA custodian (Cerulli Associates, 2023 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S. (based on total revenues, Financial Planning magazine 1996-2022); and, among third-party providers of brokerage services to banks and credit unions, No. 1 in AUM Growth from Financial Institutions; No. 1 in Market Share of AUM from Financial Institutions; No. 1 in Market Share of Revenue from Financial Institutions; No. 1 on Financial Institution Market Share; No. 1 on Share of Advisors (2021-2022 Kehrer Bielan Research and Consulting Annual TPM Report). Fortune 500 as of June 2021.

(6) Gross profit is a non-GAAP financial measure. Please see a description of gross profit under the "Non-GAAP Financial Measures" section of this release for additional information. Below is a calculation of gross profit for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Total revenue	$	3,108,394		$	2,931,769		$	2,522,383
Advisory and commission expense		1,948,065			1,819,027			1,488,432
Brokerage, clearing and exchange expense		29,636			32,984			24,793
Employee deferred compensation		2,617			560			(983	)
Gross profit	$	1,128,076		$	1,079,198		$	1,010,141

(7) Production-based payout is a financial measure calculated as advisory and commission expense plus (less) advisor deferred compensation. The payout rate is calculated by dividing the production-based payout by total advisory and commission revenue. Below is a reconciliation of the Company’s advisory and commission expense to the production-based payout and a calculation of the payout rate for the periods presented (in thousands, except payout rate):

	Q3 2024			Q2 2024			Q3 2023
Advisory and commission expense	$	1,948,065		$	1,819,027		$	1,488,432
(Less) Plus: Advisor deferred compensation		(37,431	)		(6,977	)		17,648
Production-based payout	$	1,910,634		$	1,812,050		$	1,506,080
Advisory and commission revenue	$	2,184,582		$	2,075,209		$	1,725,162
Payout rate		87.46	%		87.32	%		87.30	%

(8) Below is a reconciliation of client cash revenue per Management's Statements of Operations to client cash revenue, a component of asset-based revenue, on the Company's condensed consolidated statements of income for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Client cash on Management's Statement of Operations		372,333		$	361,316		$	377,782
Interest income on CCA balances segregated under federal or other regulations(10)		(18,478	)		(19,841	)		(17,264	)
Client cash on Condensed Consolidated Statements of Income	$	353,855		$	341,475		$	360,518

(9) Consists of revenue from the Company's sponsorship programs with financial product manufacturers, omnibus processing and networking services but does not include fees from client cash programs.

(10) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of interest income, net per Management's Statements of Operations to interest income, net on the Company's condensed consolidated statements of income for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Interest income, net on Management's Statement of Operations	$	31,428		$	27,618		$	23,485
Interest income on CCA balances segregated under federal or other regulations(8)		18,478			19,841			17,264
Interest income on deferred compensation		17			19			24
Interest income, net on Condensed Consolidated Statements of Income	$	49,923		$	47,478		$	40,773

(11) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of other revenue per Management's Statements of Operations to other revenue on the Company's condensed consolidated statements of income for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Other revenue on Management's Statement of Operations	$	3,392		$	6,621		$	4,113
Interest income on deferred compensation		(17	)		(19	)		(24	)
Deferred compensation		40,048			7,537			(18,631	)
Other revenue on Condensed Consolidated Statements of Income	$	43,423		$	14,139		$	(14,542	)

(12) Core G&A is a non-GAAP financial measure. Please see a description of core G&A under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of the Company's total expense to core G&A for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Core G&A Reconciliation
Total expense	$	2,761,046		$	2,601,698		$	2,204,711
Advisory and commission		(1,948,065	)		(1,819,027	)		(1,488,432	)
Depreciation and amortization		(78,338	)		(70,999	)		(64,627	)
Interest expense on borrowings		(67,779	)		(64,341	)		(48,363	)
Brokerage, clearing and exchange		(29,636	)		(32,984	)		(24,793	)
Amortization of other intangibles		(32,461	)		(30,607	)		(27,760	)
Employee deferred compensation		(2,617	)		(560	)		983
Total G&A		602,150			583,180			551,719
Promotional (ongoing)(14)(15)		(175,605	)		(147,830	)		(140,171	)
Acquisition costs(15)		(22,243	)		(36,876	)		(5,989	)
Employee share-based compensation		(20,289	)		(19,968	)		(15,748	)
Regulatory charges(13)		(24,879	)		(7,594	)		(48,083	)
Core G&A	$	359,134		$	370,912		$	341,728

(13) Regulatory charges for the three months ended September 30, 2024 include charges related to a potential settlement with the SEC to resolve the Company's civil investigation of certain elements of the Company’s Anti-Money Laundering ("AML") compliance program. Under the SEC's proposed resolution, the Company would pay an $18.0 million civil monetary penalty, and the Company has recorded an $18.0 million charge for the quarter ended September 30, 2024. Regulatory charges for the three months ended September 30, 2023 include a $40.0 million charge to reflect the amount of the penalty related to the SEC's civil investigation of the Company’s compliance with records preservation requirements for business-related electronic communications that was not covered by the Company’s captive insurance subsidiary. The Company reached a settlement with the staff of the SEC and paid the civil monetary penalty of $50.0 million in August 2024.

(14) Promotional (ongoing) includes $13.0 million, $12.2 million and $10.8 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, of support costs related to full-time employees that are classified within Compensation and benefits expense in the condensed consolidated statements of income and excludes costs that have been incurred as part of acquisitions that have been classified within acquisition costs for the same periods.

(15) Acquisition costs include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of the acquisitions. The below table summarizes the primary components of acquisition costs for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
Acquisition costs
Fair value mark on contingent consideration(36)	$	5,849		$	24,624		$	—
Compensation and benefits		8,352			6,827			1,345
Professional services		6,685			3,567			2,199
Promotional(14)		1,964			539			2,260
Other		(607	)		1,319			185
Acquisition costs	$	22,243		$	36,876		$	5,989

(16) EBITDA and adjusted EBITDA are non-GAAP financial measures. Please see a description of EBITDA and adjusted EBITDA under the "Non-GAAP Financial Measures" section of this release for additional information. Below is a reconciliation of net income to EBITDA and adjusted EBITDA for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q3 2023
EBITDA and adjusted EBITDA Reconciliation
Net income	$	255,303		$	243,800		$	224,291
Interest expense on borrowings		67,779			64,341			48,363
Provision for income taxes		92,045			86,271			93,381
Depreciation and amortization		78,338			70,999			64,627
Amortization of other intangibles		32,461			30,607			27,760
EBITDA	$	525,926		$	496,018		$	458,422
Regulatory charges(13)		18,000			—			40,000
Acquisition costs(15)		22,243			36,876			5,989
Adjusted EBITDA	$	566,169		$	532,894		$	504,411

(17) Adjusted net income and adjusted EPS are non-GAAP financial measures. Please see a description of adjusted net income and adjusted EPS under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS for the periods presented (in thousands, except per share data):

	Q3 2024						Q2 2024						Q3 2023
	Amount			Per Share			Amount			Per Share			Amount			Per Share
Net income / earnings per diluted share	$	255,303		$	3.39		$	243,800		$	3.23		$	224,291		$	2.91
Regulatory charges(13)		18,000			0.24			—			—			40,000			0.52
Amortization of other intangibles		32,461			0.43			30,607			0.41			27,760			0.36
Acquisition costs(15)		22,243			0.29			36,876			0.49			5,989			0.08
Tax benefit		(14,650	)		(0.19	)		(17,816	)		(0.24	)		(9,143	)		(0.12	)
Adjusted net income / adjusted EPS	$	313,357		$	4.16		$	293,467		$	3.88		$	288,897		$	3.74
Diluted share count		75,405						75,548						77,147
Note: Totals may not foot due to rounding.

(18) Consists of total advisory and brokerage assets under custody at the Company's primary broker-dealer subsidiary, LPL Financial.

(19) Assets on the Company's corporate advisory platform are serviced by investment advisor representatives of LPL Financial. Assets on the Company's independent RIA advisory platform are serviced by investment advisor representatives of separate registered investment advisor firms rather than representatives of LPL Financial.

(20) Consists of advisory assets in LPL Financial’s Model Wealth Portfolios, Optimum Market Portfolios, Personal Wealth Portfolios and Guided Wealth Portfolios platforms.

(21) Consists of total client deposits into advisory or brokerage accounts less total client withdrawals from advisory or brokerage accounts, plus dividends, plus interest, minus advisory fees. The Company considers conversions from and to brokerage or advisory accounts as deposits and withdrawals, respectively.

(22) Consists of existing custodied assets that converted from brokerage to advisory, less existing custodied assets that converted from advisory to brokerage.

(23) Calculated as annualized current period organic net new assets divided by preceding period assets in their respective categories of advisory assets or total advisory and brokerage assets.

(24) Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial.

(25) Client cash balances include CCA and exclude purchased money market funds. CCA balances include cash that clients have deposited with LPL Financial that is included in Client payables in the condensed consolidated balance sheets. The following table presents purchased money market funds for the periods presented (in billions):

	Q3 2024			Q2 2024			Q3 2023
Purchased money market funds	$	38.5		$	35.7		$	25.2

(26) During the first quarter of 2024, the Company updated its definition of client cash account balances to exclude other client payables. Prior period disclosures have been updated to reflect this change as applicable.

(27) Calculated by dividing revenue for the period by the average balance during the period.

(28) EBITDA and Credit Agreement EBITDA are non-GAAP financial measures. Please see a description of EBITDA and Credit Agreement EBITDA under the “Non-GAAP Financial Measures” section of this release for additional information. Under the Credit Agreement, management calculates Credit Agreement EBITDA for a trailing twelve month period at the end of each fiscal quarter and in doing so may make further adjustments to prior quarters. Below are reconciliations of trailing twelve month net income to trailing twelve month EBITDA and Credit Agreement EBITDA for the periods presented (in thousands):

	Q3 2024			Q2 2024			Q4 2023
EBITDA and Credit Agreement EBITDA Reconciliations
Net income	$	1,005,422		$	974,410		$	1,066,250
Interest expense on borrowings		246,618			227,201			186,804
Provision for income taxes		339,977			341,312			378,525
Depreciation and amortization		284,431			270,720			246,994
Amortization of other intangibles		121,238			116,537			107,211
EBITDA	$	1,997,686		$	1,930,180		$	1,985,784
Credit Agreement Adjustments:
Acquisition costs and other(15)(37)	$	236,007		$	224,687		$	110,170
Employee share-based compensation		78,425			73,884			66,024
M&A accretion(38)		26,265			28,843			30,268
Advisor share-based compensation		2,503			2,571			2,561
Credit Agreement EBITDA	$	2,340,886		$	2,260,165		$	2,194,807

(29) Calculated based on the average advisor count from the current period and prior periods.

(30) Calculated based on the end of period total advisory and brokerage assets divided by end of period advisor count.

(31) Represents amortization expense on forgivable loans for transition assistance to advisors and institutions.

(32) Refers to active subscriptions related to professional services offerings (CFO Solutions, Marketing Solutions, Admin Solutions, Advisor Institute, Bookkeeping, Partial Book Sales, CFO Essentials, and Digital Marketing) and business optimizer offerings (M&A Solutions, Digital Office, Resilience Plans and Assurance Plans), as well as planning and advice services (Paraplanning, Tax Planning, and High Net Worth Services) for which subscriptions are the number of advisors using the service.

(33) Reflects retention of total advisory and brokerage assets, calculated by deducting quarterly annualized attrition from total advisory and brokerage assets, divided by the prior quarter total advisory and brokerage assets.

(34) Capital expenditures represent cash payments for property and equipment during the period.

(35) Acquisitions, net represent cash paid for acquisitions, net of cash acquired during the period.

(36) Represents a fair value adjustment to our contingent consideration liabilities that is reflected in other expense in the condensed consolidated statements of income.

(37) Acquisition costs and other primarily include acquisition costs, costs incurred related to the integration of the strategic relationship with Prudential, an $18.0 million regulatory charge recognized during the three months ended September 30, 2024 related to an investigation of the Company’s compliance with certain elements of the Company’s AML compliance program, and a $40.0 million regulatory charge recognized during the three months ended September 30, 2023 to reflect the amount of a penalty proposed by the SEC as part of its civil investigation of the Company's compliance with records preservation requirements for business-related electronic communications stored on personal devices that have not been approved by the Company.

(38) M&A accretion is an adjustment to reflect the annualized expected run rate EBITDA of an acquisition as permitted by the Credit Agreement for up to eight fiscal quarters following the close of the transaction.