LPL Financial Prepares for AML-Related SEC Settlement

Posted on November 5th, 2024 at 11:57 AM
LPL Financial Prepares for AML-Related SEC Settlement

From the desk of Jim Eccleston at Eccleston Law

LPL Financial has set aside $18 million in anticipation of settling an ongoing Securities and Exchange Commission (SEC) investigation into its anti-money laundering (AML) compliance program. According to AdvisorHub, the potential settlement, disclosed in LPL’s third-quarter earnings report comes alongside the firm’s $50 million payout earlier this year as part of an SEC investigation into off-the-books texting practices.

Despite added legal expenses, which rose to $25 million this quarter, LPL’s financial performance showed resilience. AdvisorHub reports that LPL’s quarterly earnings rose 14 percent to $255 million, while revenue climbed 23 percent to $3.1 billion. New CEO Rich Steinmeier, leading his first earnings call since taking over from Dan Arnold, assured analysts of LPL's ongoing growth plans, especially in expanding affiliations to attract more wirehouse and employee advisors.

The firm reported a 6 percent increase in its advisor roster, ending the quarter with 23,686 advisors, up 1,282 from the previous year. Total advisory and brokerage assets rose 29 percent to $1.6 trillion, with advisory accounts accounting for 56 percent of total assets, marking a shift toward revenue-generating advisory relationships.

LPL’s expansion strategy has been further supported by acquisitions, including the purchase of Atria Wealth Solutions, adding 2,200 advisors and $76 billion in assets. Additionally, LPL expects to onboard $76 billion in client assets from Prudential Financial and Wintrust Financial by early 2025.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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