Investor Presentaiton
4
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
Macro
benefits
Market Levels (S&P 500)
Rising market levels drive growth in assets and
related revenues including advisory fees, trailing
commissions, and sponsor revenues
Interest Rates
Rising interest rates benefit on client cash yields
Annual Gross Profit* Impact
~$10M
Per 1% increase in market levels
~$1,000M
(14)
Over first +300 bps of rate hikes
Natural
offsets to
market
declines
Cash Sweep Balance
Increased risk and volatility in the market drives
higher cash sweep balances
Transaction Volume
Increased risk and volatility in the market drives
additional portfolio rebalancing activity and higher
transaction volumes
As equity markets declined in 1H
2022, cash balances increased by
~$13B, which translates to a
~$390M benefit annually (15)
Transaction revenue increased
~$7M sequentially in Q1 2022
LPL Financial Member FINRA/SIPC
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