LPL Financial's 2009 Net Rises 4%, Despite Revenue Fall

In a challenging year that began with the company announcing layoffs, LPL Financial rebounded to end 2009 with a 4.4% increase in net income despite an 11.8% decline in net revenue. For the full year ended December 31, LPL reported in an 8-K filing with the SEC that it had net income of $47.5 million on revenue of $2.7 billion, compared to net income of $45.5 million on net revenue of $3.1 billion in 2008.

Robert Moore, LPL’s CFO, said in an interview that the profit increase was made possible by the company’s ongoing strategic business review which rather than “cutting costs across the board” takes a more systematic approach to viewing and trimming a company’s expense structure, finding efficiencies in areas that were not core to its compliance, legal, or client-facing operations, for example. He did say that the company ended the year with a lower employee headcount than it began the year.

LPL’s financial picture was strengthened by the consolidation of its three affiliated broker/dealers (the former Pacific Life B/Ds) onto LPL’s own clearing platform, a move that while only consummated in the fall nevertheless saved LPL $6 million in 2009, Moore reported. Moreover, LPL expects to realize annual savings of $21 million from the move, he said.