Investor Presentaiton
L
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 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 Company calculates its leverage ratio as total debt less total corporate cash, divided by Credit Agreement EBITDA for the trailing twelve months.
(3) Represents Moody's Corporate Family Rating and S&P Issuer Credit Rating.
(4) LPL estimates based on 2019 Cerulli channel size and advisory share estimates and include market adjustment for 2019.
(5)
2022 outlook is prior to M&A- and large bank-related onboarding spend in technology.
(6) Consists of total assets on LPL Financial's corporate advisory platform serviced by investment advisor representatives of LPL Financial or Allen & Company of Florida, LLC ("Allen & Company") and total assets on LPL Financial's independent
advisory platform serviced by investment advisor representatives of separate investment advisor firms ("Independent RIAS"), rather than of LPL Financial.
(7)
(8)
Consists of advisory assets in LPL Financial's Model Wealth Portfolios, Optimum Market Portfolios, Personal Wealth Portfolios, and Guided Wealth Portfolios platforms.
In April 2020, the Company updated its definition of net new assets to include dividends plus interest, minus advisory fees. Unless otherwise noted, net new assets figures for periods prior to Q2 2020 appearing in this presentation have been
recast using the updated definition.
(9) Consists of total client deposits into advisory or brokerage accounts (including advisory or brokerage accounts serviced by Allen & Company advisors) 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. Annualized growth is calculated as the current period organic net new advisory or
brokerage assets divided by preceding period total advisory or brokerage assets, multiplied by four.
(10) Consists of existing custodied assets that converted from brokerage to advisory, less existing custodied assets that converted from advisory to brokerage.
(11) LPL Institution Services AUM from banks and credit unions as of September 30, 2022.
(12) Year-over-year comparisons are based on the change from Q3 2021 to Q3 2022.
(13) Consists of brokerage assets serviced by advisors licensed with LPL Financial.
(14) Assumes change based on Q3 2022 end of period ICA balances, presented on page 18. Additionally, as money market overflow balances shift back into ICA, there would be an additional upside of ~$20M per rate hike at a ~10% deposit
beta.
(15) Based on variable client cash balances indexed to Fed Funds.
(16) During the second quarter of 2022, the Company updated its definition of client cash balances to include client cash accounts and exclude purchased money market funds. Client cash accounts include cash that clients have deposited with
LPL Financial that is included in Client payables in the condensed consolidated balance sheets. Prior period disclosures have been updated to reflect this change as applicable.
(17) Calculated by dividing revenue for the period by the average balance during the period.
(18) Calculated by dividing interest income earned on cash held in the CCA for the period by the average CCA balance, excluding cash held in CCA that has been used to fund margin lending, during the period. The remaining cash is primarily
held in cash segregated under federal or other regulations in the condensed consolidated balance sheets.
(19) 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.
(20) Additional leverage capacity is assumed to be generated by acquired EBITDA* from an M&A opportunity at a 6-8x purchase multiple for which capital was deployed up to 2.5x leverage.
(21) The up-front purchase price for Blaze Portfolio was $12M, with up to $5M in earn-out payments.
(22) Consists of total advisory and brokerage assets under custody at LPL Financial and Waddell & Reed, LLC.
(23) Acquisition costs include the costs to setup, onboard and integrate acquired entities. The below table summarizes the primary components of acquisition costs for the periods presented:
$ in millions
Compensation and benefits
Professional services
Promotional
Other
Acquisition costs
Q3'22 LTM
2021
$23.1
$36.4
15.6
18.7
3.9
14.3
1.4
6.9
$44.0
$76.3
LPL Financial Member FINRA/SIPC
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