LPL Financial Holdings Inc at Bank of America Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Craig Siegenthaler - Bank of America - Analyst : Great. Rich, this is super helpful. Maybe to start off Q&A with a recruiting question. So the breakaway broker trend has slowed a little bit the last few years, but your organic growth has remained robust. In fact, it's gotten even stronger. So what part of the value proposition or this model has really driven that? Maybe the one or two kind of key items.

Question: Craig Siegenthaler - Bank of America - Analyst : So second question, organic growth. So you've really expanded the TAM in the last five or six years into these new channels. I don't know if we're exactly at the maturing point yet. I still think these models are ramping, but how do you expect them to contribute to overall organic growth in the future?

Question: Craig Siegenthaler - Bank of America - Analyst : Great. My next question is on the institutional channel, the bank channel, enterprise, it has a few different names. I think you've averaged about two wins a year in the last five years. My question is: has the low-hanging fruit already been plucked? Or can this really nice growth trajectory continue? I'm kind of curious about what the existing TAM looks like after you've announced a bunch of wins over the last few years.

Question: Craig Siegenthaler - Bank of America - Analyst : Great. Rich, let's talk about operating leverage. It seems like maybe the language has been a little more favorable towards operating leverage versus your predecessor, but you outlined one of your key priorities now is driving operating leverage in the business. What are some examples of what supports positive operating leverage? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 12, 2025 / 4:20PM, LPLA.OQ - LPL Financial Holdings Inc at Bank of America Financial Services Conference

Question: Craig Siegenthaler - Bank of America - Analyst : Great. Let's talk about alternative investments. You've been building out this platform. I'm curious, where are you in this build-out? And what else do you have left to do?

Question: Craig Siegenthaler - Bank of America - Analyst : So I want to hit on Liquidity & Succession, a relatively new model. What it does is it helps transfer books of business from older advisors to newer advisors. It's a differentiating factor for LPL. How has the feedback been from advisors that have used it?

Question: Craig Siegenthaler - Bank of America - Analyst : Great. I sort of want to pull everything we talked about together and think about EPS, and we call it the EPS algo. How does successful execution

Question: Craig Siegenthaler - Bank of America - Analyst : I think one really nice factor with your model is the stable-ish ROCA due to several mix shifts, which most financial firms don't have. It really helps that EPS algo. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 12, 2025 / 4:20PM, LPLA.OQ - LPL Financial Holdings Inc at Bank of America Financial Services Conference

Question: Craig Siegenthaler - Bank of America - Analyst : Last question here on the outlook. In recent years, LPL has made significant investments to enhance the platform and services, expanded into new markets, and this has resulted in industry-leading growth. Assuming LPL can continue to execute well, what does LPL look like in 5 to 10 years?

Question: Craig Siegenthaler - Bank of America - Analyst : If you do that, I think the stock will do very well. And I think that's a perfect place to end. But Rich, on behalf of all of us at Bank of America Merrill Lynch, we thank you for joining us.