LPL Trims Commonwealth Asset Retention Estimate to 83% From 90%

LPL Financial Holdings Inc. (Nasdaq: LPLA) lowered its expected asset retention for its Commonwealth Financial Network acquisition to approximately 83%, down from the approximately 90% it projected in July, the company said Oct. 27. The firm also reported record adjusted earnings per share of $5.97 for the third quarter, up 15% year-over-year.

Net income was $356.6 million, or $4.52 per diluted share, compared with a net loss of $29.5 million, or $0.37 per share, in Q3 2025. That loss came when LPL absorbed $419 million in one-time costs tied to the closing of the Commonwealth acquisition. Net income fell 6% from $379.3 million, or $4.74 per share, in the second quarter.

The retention revision comes about two weeks before LPL is scheduled to move Commonwealth advisers onto its platform in mid-November. In its second-quarter report on July 30, LPL said it continued to expect asset retention of approximately 90%.

“With only two weeks until conversion, we have increased clarity on final asset retention, which we now expect to be approximately 83%,” said Rich Steinmeier, LPL chief executive officer, on the firm’s Oct. 27 earnings call.

LPL president and chief financial officer Matt Audette said the firm had underwritten the deal to 90% retention. He said that last quarter, LPL was “right around 85% for folks that had signed,” before a small number of advisers who had signed agreements decided not to stay.

As of Sept. 30, Commonwealth had about 3,000 advisers serving about $340 billion in client assets, assuming full retention, according to LPL’s investor presentation.

LPL now estimates Commonwealth will generate $415 million in run-rate earnings before interest, taxes, depreciation, and amortization, or EBITDA, once fully integrated, the company said. That is down from the $435 million it projected in the second quarter and matches its estimate when the approximately $2.7 billion deal was signed in March 2025. Audette said that since the deal was signed, lower retention and macroeconomic swings had been offset by better-than-expected synergies. He said LPL expects to reach the run-rate figure by the fourth quarter of 2027. Including onboarding, integration, and technology costs, the purchase price works out to about eight times that estimate, according to AltsWire calculations based on LPL’s investor presentation.

Audette said revenue synergies, including sponsor-related agreements and cash sweep economics, typically arrive soon after conversion. Expense synergies will phase in more gradually, in part because LPL is retaining Commonwealth’s entire service organization, he said.

Other asset-based revenue, which includes fees from LPL’s sponsorship programs with financial product manufacturers, rose 13% year-over-year to $400.6 million.

Across LPL’s broader business, total client assets rose 11% year-over-year to $2.56 trillion. Advisory assets climbed 16% to $1.56 trillion, or 60.9% of total client assets, up from 58.2% a year ago. Organic net new assets were $29.1 billion, which the company said represented 5% annualized growth, up from $23.1 billion in the second quarter. Audette said he expects organic growth of about 3% annualized for October.

Recruited assets were $24.1 billion, down 26% from $32.6 billion a year earlier and compared with $24.9 billion in the second quarter. Trailing 12-month recruited assets totaled $81 billion. LPL added a net 122 advisers during the quarter, bringing its count to 32,597, compared with a net gain of 331 in the second quarter.

Client cash balances were $56.6 billion, or 2.2% of total client assets.

Core general and administrative expense, a non-GAAP measure, was $532.2 million. LPL narrowed its full-year 2026 outlook for the expense to a range of $2.14 billion to $2.16 billion, including Commonwealth-related costs, from $2.14 billion to $2.165 billion. The firm repurchased $300.6 million in shares during the quarter and plans about $300 million more in the fourth quarter. The board declared a $0.30 per share dividend payable Nov. 30 to stockholders of record as of Nov. 12.

LPL also began rolling out Cyan, a proprietary artificial intelligence agent and part of its Latitude technology platform. An initial pilot of Cyan Assist included several hundred advisers, and LPL expects to expand access to the tool to all advisers by year-end, Steinmeier said.

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