By Andrew Welsch

Shareholders of LPL Financial got an early Halloween treat after the company reported better-than-expected third-quarter earnings and provided a positive update regarding its recent acquisition of Commonwealth Financial Network.

The stock jumped 12% Friday morning, far higher than th S&P 500's 0.5%.

Adjusting for the one-time costs related to the Commonwealth acquisition, LPL reported adjusted earnings per share of $5.20, exceeding analyst estimates of $4.49, according to FactSet. Revenue came in at $4.55 billion compared with expectations of $4.35 billion. On an unadjusted basis, LPL reported a net loss of $30 million.

Like other wealth management companies, LPL is benefiting from the bull market that has enticed investors to trade stocks and add new funds to their brokerage accounts. LPL said total advisory and brokerage assets increased 45% year over year to $2.3 trillion. Total organic net new assets came in at $33 billion, representing 7% annualized growth, according to the company.

Commonwealth update. San Diego-based LPL has been growing steadily through acquisitions and recruiting of financial advisors. LPL's acquisition of Commonwealth, which closed over the summer, has been closely watched in the wealth management industry because LPL competitors have been trying to recruit Commonwealth advisors. When advisors switch firms, they typically take most of their clients with them.

While some Commonwealth advisors have left to open independent practices or join rivals such as Raymond James Financial, LPL executives provided a reassuring update during the company's earnings call late Thursday. LPL said it is on track to meet its 90% retention target; advisors representing nearly 80% of assets have agreed to stay with LPL.

"Putting all of that retention aside, we feel over the moon with this transaction. Cultural alignment and complementary capabilities are creating a combined firm that is far stronger than the sum of the parts, " CEO Rich Steinmeier told analysts.

LPL anticipates converting Commonwealth advisors and assets to its platform in the fourth quarter of 2026. As LPL meets its retention target, that should free up staff and resources to devote to external recruiting efforts.

"While organic growth has been below normal recently due to lower advisor movements and a reallocation of resources to Commonwealth, this should turn when macro uncertainty improves and Commonwealth is integrated," Jeff Schmitt, analyst at William Blair, wrote in a research note on Friday. "The company is on pace for 22% EPS growth this year, and we believe it can maintain EPS growth around the 20% level through 2027."

Schmitt rates LPL stock Outperform.

Write to Andrew Welsch at andrew.welsch@barrons.com

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October 31, 2025 10:04 ET (14:04 GMT)

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