Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 27, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 001-34963 | |
Entity Registrant Name | LPL Financial Holdings Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3717839 | |
Entity Address, Address Line One | 4707 Executive Drive, | |
Entity Address, City or Town | San Diego, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | (800) | |
Local Phone Number | 877-7210 | |
Title of 12(b) Security | Common Stock - par value $0.001 per share | |
Trading Symbol | LPLA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 79,943,183 | |
Entity Central Index Key | 0001397911 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUES: | ||
Advisory | $ 722,046 | $ 579,027 |
Commission | 557,229 | 503,444 |
Asset-based | 264,706 | 285,506 |
Transaction and fee | 140,944 | 137,096 |
Interest Income | 6,518 | 9,542 |
Other | 16,174 | (51,218) |
Total net revenues | 1,707,617 | 1,463,397 |
EXPENSES: | ||
Advisory and commission | 1,108,899 | 870,795 |
Compensation and benefits | 161,540 | 146,802 |
Promotional | 54,181 | 57,398 |
Depreciation and amortization | 35,499 | 26,644 |
Amortization of intangible assets | 17,431 | 16,570 |
Occupancy and equipment | 43,584 | 39,546 |
Professional services | 15,625 | 14,605 |
Brokerage, clearing and exchange | 19,364 | 17,024 |
Communications and data processing | 11,993 | 10,835 |
Other | 24,900 | 26,228 |
Total operating expenses | 1,493,016 | 1,226,447 |
Non-operating interest expense and other | 25,059 | 29,318 |
Loss on extinguishment of debt | 24,400 | 0 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 165,142 | 207,632 |
PROVISION FOR INCOME TAXES | 35,522 | 51,991 |
NET INCOME | $ 129,620 | $ 155,641 |
EARNINGS PER SHARE (Note 13) | ||
Earnings per share, basic | $ 1.63 | $ 1.96 |
Earnings per share, diluted | $ 1.59 | $ 1.92 |
Weighted-average shares outstanding, basic | 79,697 | 79,507 |
Weighted-average shares outstanding, diluted | 81,622 | 81,166 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 839,144 | $ 808,612 |
Cash segregated under federal and other regulations | 839,428 | 923,158 |
Restricted cash | 73,507 | 67,264 |
Receivables from: | ||
Clients, net of allowance of $615 at March 31, 2021 and $520 at December 31, 2020 | 453,132 | 405,106 |
Product sponsors, broker-dealers and clearing organizations | 240,465 | 233,192 |
Advisor loans, net of allowance of $7,362 at March 31, 2021 and $6,763 at December 31, 2020 | 558,144 | 547,372 |
Others, net of allowance of $3,238 at March 31, 2021 and $3,101 at December 31, 2020 | 351,443 | 306,640 |
Securities owned: | ||
Trading — at fair value | 47,964 | 29,252 |
Held-to-maturity — at amortized cost | 11,972 | 13,235 |
Securities borrowed | 13,565 | 30,130 |
Fixed assets, net of accumulated depreciation and amortization of $524,766 at March 31, 2021 and $489,997 at December 31, 2020 | 588,736 | 582,868 |
Operating lease assets | 99,306 | 101,921 |
Goodwill | 1,513,866 | 1,513,866 |
Intangible assets, net of accumulated amortization of $629,442 at March 31, 2021 and $612,011 at December 31, 2020 | 383,794 | 397,486 |
Deferred Income Tax Assets, Net | 24,246 | 24,112 |
Other assets | 576,699 | 539,357 |
Total assets | 6,615,411 | 6,523,571 |
LIABILITIES: | ||
Drafts payable | 151,397 | 178,403 |
Payables to clients | 1,294,664 | 1,356,083 |
Payables to broker-dealers and clearing organizations | 125,563 | 89,743 |
Accrued advisory and commission expenses payable | 195,044 | 187,040 |
Accounts payable and accrued liabilities | 655,787 | 681,554 |
Income taxes payable | 58,546 | 28,145 |
Unearned revenue | 123,152 | 95,328 |
Securities sold, but not yet purchased — at fair value | 1,316 | 206 |
Long-term and other borrowings, net | 2,332,809 | 2,345,414 |
Operating lease liabilities | 136,419 | 139,377 |
Finance lease liabilities | 106,393 | 107,424 |
Total liabilities | 5,181,090 | 5,208,717 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value; 600,000,000 shares authorized; 128,136,874 shares issued at March 31, 2021 and 127,585,764 shares issued at December 31, 2020 | 128 | 127 |
Additional paid-in capital | 1,787,095 | 1,762,770 |
Treasury stock, at cost — 48,210,851 shares at March 31, 2021 and 48,115,037 shares at December 31, 2020 | (2,406,221) | (2,391,062) |
Retained earnings | 2,053,319 | 1,943,019 |
Total stockholders' equity | 1,434,321 | 1,314,854 |
Total liabilities and stockholders' equity | $ 6,615,411 | $ 6,523,571 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accumulated depreciation and amortization, Fixed assets | $ 524,766 | $ 489,997 |
Accumulated amortization, Intangible assets | $ 629,442 | $ 612,011 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 128,136,874 | 127,585,764 |
Treasury stock, shares | 48,210,851 | 48,115,037 |
Receivables from clients [Member] | ||
Allowances on receivables | $ 615 | $ 520 |
Receivables from others [Member] | ||
Allowances on receivables | 3,238 | 3,101 |
Advisor Loans [Member] | ||
Allowances on receivables | $ 7,362 | $ 6,763 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained Earnings |
BEGINNING BALANCE at Dec. 31, 2019 | $ 1,023,873 | $ 126 | $ 1,703,973 | $ (2,234,793) | $ 0 | $ 1,554,567 | ||
BEGINNING BALANCE (Accounting Standards Update 2016-02 [Member]) at Dec. 31, 2019 | $ (7,317) | $ (7,317) | ||||||
BEGINNING BALANCE, shares at Dec. 31, 2019 | 126,494 | 46,260 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income, net of tax expense | 155,641 | 0 | 155,641 | |||||
Issuance of common stock to settle restricted stock units, net | (8,370) | $ 0 | 0 | $ (8,370) | ||||
Issuance of common stock to settle restricted stock units, net, shares | 315 | 122 | ||||||
Treasury stock purchases | (150,036) | $ (150,036) | ||||||
Treasury stock purchases, shares | 1,810 | |||||||
Cash dividends on common stock | (19,713) | (19,713) | ||||||
Stock option exercises and other | 7,947 | $ 1 | 6,971 | $ 487 | 488 | |||
Stock option exercises and other, shares | 227 | (14) | ||||||
Share-based compensation | 9,332 | 9,332 | ||||||
ENDING BALANCE at Mar. 31, 2020 | 1,011,357 | $ 127 | 1,720,276 | $ (2,392,712) | 0 | 1,683,666 | ||
ENDING BALANCE, shares at Mar. 31, 2020 | 127,036 | 48,178 | ||||||
BEGINNING BALANCE at Dec. 31, 2020 | 1,314,854 | $ 127 | 1,762,770 | $ (2,391,062) | 0 | 1,943,019 | ||
BEGINNING BALANCE, shares at Dec. 31, 2020 | 127,586 | 48,115 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income, net of tax expense | 129,620 | 0 | 129,620 | |||||
Issuance of common stock to settle restricted stock units, net | (16,030) | $ 0 | 0 | $ (16,030) | ||||
Issuance of common stock to settle restricted stock units, net, shares | 296 | 120 | ||||||
Cash dividends on common stock | (19,980) | (19,980) | ||||||
Stock option exercises and other | 13,880 | $ 1 | 12,348 | $ 871 | 660 | |||
Stock option exercises and other, shares | 255 | (24) | ||||||
Share-based compensation | 11,977 | 11,977 | ||||||
ENDING BALANCE at Mar. 31, 2021 | $ 1,434,321 | $ 128 | $ 1,787,095 | $ (2,406,221) | $ 0 | $ 2,053,319 | ||
ENDING BALANCE, shares at Mar. 31, 2021 | 128,137 | 48,211 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 129,620 | $ 155,641 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 35,499 | 26,644 |
Amortization of intangible assets | 17,431 | 16,570 |
Amortization of debt issuance costs | 1,306 | 1,348 |
Share-based compensation | 11,977 | 9,332 |
Provision for bad debts | 1,977 | 2,691 |
Deferred income taxes | (133) | (89) |
Loss on extinguishment of debt | 24,400 | 0 |
Loan forgiveness | 29,966 | 25,714 |
Other | (2,624) | (1,841) |
Changes in operating assets and liabilities: | ||
Receivables from clients | (48,120) | 73,192 |
Receivables from product sponsors, broker-dealers and clearing organizations | (7,273) | (41,036) |
Advisor loans | (41,337) | (48,013) |
Receivables from others | (45,002) | (56,089) |
Securities owned | (18,399) | 15,221 |
Securities borrowed | 16,565 | 1,757 |
Operating leases | (343) | (371) |
Other assets | (39,205) | (51,675) |
Drafts payable | (27,006) | (68,804) |
Payables to clients | (61,419) | 270,009 |
Payables to broker-dealers and clearing organizations | 35,820 | 25,858 |
Accrued advisory and commission expenses payable | 8,004 | (18,970) |
Accounts payable and accrued liabilities | (20,629) | (27,763) |
Income taxes receivable/payable | 30,401 | 45,153 |
Unearned revenue | 27,824 | 26,578 |
Securities sold, but not yet purchased | 1,110 | 119 |
Net cash provided by operating activities | 60,410 | 381,176 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (41,109) | (33,973) |
Purchase of securities classified as held-to-maturity | 0 | (3,793) |
Proceeds from maturity of securities classified as held-to-maturity | 1,250 | 1,250 |
Net cash used in investing activities | (39,859) | (36,516) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving credit facilities | 225,000 | 616,000 |
Repayments of revolving credit facilities | (225,000) | (545,000) |
Repayment of senior unsecured notes | (900,000) | 0 |
Repayment of senior secured term loans | (2,675) | (2,675) |
Proceeds from senior unsecured notes | 900,000 | 0 |
Payments of debt issuance costs | (12,150) | 0 |
Make-whole premium on redemption of senior unsecured notes | (25,875) | 0 |
Payment of contingent consideration | (3,645) | (10,000) |
Tax payments related to settlement of restricted stock units | (16,030) | (8,370) |
Repurchase of common stock | 0 | (150,036) |
Dividends on common stock | (19,980) | (19,713) |
Proceeds from stock option exercises and other | 13,880 | 7,947 |
Principal payment of finance leases and obligations | (1,031) | (996) |
Net cash used in financing activities | (67,506) | (112,843) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (46,955) | 231,817 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 1,799,034 | 1,471,778 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | 1,752,079 | 1,703,595 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Interest paid | 33,729 | 37,842 |
Income taxes paid | 5,101 | 6,928 |
NONCASH DISCLOSURES: | ||
Capital expenditures included in accounts payable and accrued liabilities | 11,535 | 15,031 |
Lease asset obtained in exchange for operating lease liabilities | $ 0 | $ 3,447 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) cash, cash equivalent and restricted cash reconciliation - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 839,144 | $ 808,612 | $ 418,202 | |
Cash segregated under federal and other regulations | 839,428 | 923,158 | 1,217,692 | |
Restricted cash | 73,507 | 67,264 | 67,701 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 1,752,079 | $ 1,799,034 | $ 1,703,595 | $ 1,471,778 |
Organization and Description of
Organization and Description of the Company | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Company | ORGANIZATION AND DESCRIPTION OF THE COMPANY LPL Financial Holdings Inc. (“LPLFH”), a Delaware holding corporation, together with its consolidated subsidiaries (collectively, the “Company”), provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions (collectively, “advisors”) in the United States. Through its custody and clearing platform, using both proprietary and third-party technology, the Company provides access to diversified financial products and services, enabling its advisors to offer objective financial advice and brokerage services to retail investors (their “clients”). The Company’s most significant, wholly owned subsidiaries are described below: • LPL Holdings, Inc. (“LPLH” or “Parent”), a Massachusetts holding corporation, is an intermediate holding company and directly or indirectly owns 100% of the issued and outstanding common stock of all of LPLFH’s indirect subsidiaries, including a captive insurance subsidiary (the “Captive Insurance Subsidiary”) that underwrites insurance for various legal and regulatory risks of the Company. • LPL Financial LLC (“LPL Financial”), with primary offices in San Diego, California; Fort Mill, South Carolina; Boston, Massachusetts; and Austin, Texas, is a clearing broker-dealer and an investment adviser that principally transacts business as an agent for its advisors and financial institutions on behalf of their clients in a broad array of financial products and services. LPL Financial is licensed to operate in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands. • Fortigent Holdings Company, Inc. and its subsidiaries provide solutions and consulting services to registered investment advisers (“RIAs”), banks and trust companies serving high-net-worth clients. • LPL Insurance Associates, Inc. operates as an insurance brokerage general agency that offers life and disability insurance products and services for LPL Financial advisors. • AW Subsidiary, Inc. is a holding company for AdvisoryWorld and Blaze Portfolio Systems LLC (“Blaze”). AdvisoryWorld offers technology products, including proposal generation, investment analytics and portfolio modeling, to both the Company’s advisors and external clients in the wealth management industry. Blaze offers a trading and rebalancing platform to both the Company’s advisors and external clients. • PTC Holdings, Inc. (“PTCH”) is a holding company for The Private Trust Company, N.A. (“PTC”). PTC is chartered as a non-depository limited purpose national bank, providing a wide range of trust, investment management oversight, and custodial services for estates and families. PTC also provides Individual Retirement Account (“IRA”) custodial services for LPL Financial. Each member of PTCH’s board of directors meets the direct equity ownership interest requirements that are required by the Office of the Comptroller of the Currency. • LPL Employee Services, LLC is a holding company for Allen & Company of Florida, LLC (“Allen & Company”), an RIA. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which require the Company to make estimates and assumptions regarding the valuation of certain financial instruments, intangible assets, allowance for doubtful accounts, share-based compensation, accruals for liabilities, income taxes, revenue and expense accruals, and other matters that affect the consolidated financial statements and related disclosures. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the results for the interim periods presented. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements. The unaudited condensed consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of results of income, comprehensive income, financial position and cash flows in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2020, contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”). Recently Issued Accounting Pronouncements There are no recently issued accounting pronouncements that would materially impact the Company’s consolidated financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES Revenues are recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. Advisory Advisory revenues represent fees charged to advisors’ clients’ accounts on the Company’s corporate advisory platform. The Company provides ongoing investment advice and acts as a custodian, providing brokerage and execution services on transactions, and performs administrative services for these accounts. This series of performance obligations transfers control of the services to the client over time as the services are performed. These revenues are recognized ratably over time to match the continued delivery of the performance obligations to the client over the life of the contract. The advisory revenues generated from the Company’s corporate advisory platform are based on a percentage of the market value of the eligible assets in the clients’ advisory accounts. As such, the consideration for these revenues are variable and an estimate of the variable consideration is constrained due to dependence on unpredictable market impacts on client portfolio values. The constraint is removed once the portfolio value can be determined. The Company provides advisory services to clients on its corporate advisory platform through the advisor. The Company is the principal in these arrangements and recognizes advisory revenues on a gross basis, as the Company is responsible for satisfying the performance obligations and has control over determining the fees. Commission Commission revenues represent sales commissions generated by advisors for their clients’ purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. The Company is the principal for commission revenues, as it is responsible for the execution of the clients’ purchases and sales, and maintains relationships with the product sponsors. Advisors assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. The following table presents total commission revenues disaggregated by investment product category (in thousands): Three Months Ended March 31, 2021 2020 Commission revenues Annuities $ 280,776 $ 245,662 Mutual funds 173,150 156,156 Fixed income 32,162 29,125 Equities 38,911 37,421 Other 32,230 35,080 Total commission revenues $ 557,229 $ 503,444 The Company generates two types of commission revenues: sales-based commissions that are recognized at the point of sale on the trade date and trailing commissions that are recognized over time as earned. Sales-based commission revenues vary by investment product and are based on a percentage of an investment product’s current market value at the time of purchase. Trailing commission revenues are generally based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets, and are recognized over the period during which services, such as ongoing support, are performed. As trailing commission revenues are based on the market value of clients’ investment holdings, the consideration is variable and an estimate of the variable consideration is constrained due to dependence on unpredictable market impacts. The constraint is removed once the investment holdings value can be determined. The following table presents sales-based and trailing commission revenues disaggregated by product category (in thousands): Three Months Ended March 31, 2021 2020 Commission revenues Sales-based Annuities $ 95,539 $ 92,525 Mutual funds 47,279 45,534 Fixed income 32,162 29,125 Equities 38,911 37,421 Other 22,382 23,786 Total sales-based revenues $ 236,273 $ 228,391 Trailing Annuities $ 185,237 $ 153,137 Mutual funds 125,871 110,622 Other 9,848 11,294 Total trailing revenues $ 320,956 $ 275,053 Total commission revenues $ 557,229 $ 503,444 Asset-Based Asset-based revenues consist of fees from the Company’s client cash programs, which consist of fees from its money market programs and insured bank sweep vehicles, sponsorship programs and recordkeeping. Client Cash Revenues Client cash revenues are generated based on advisors’ clients’ cash balances in insured bank sweep accounts and money market programs. The Company receives fees based on account type and invested balances for administration and recordkeeping. These fees are paid and recognized over time. Sponsorship Programs The Company receives fees from product sponsors, primarily mutual fund and annuity companies, for marketing support and sales force education and training efforts. Compensation for these performance obligations is either a fixed fee, a percentage of the average annual amount of product sponsor assets held in advisors’ clients’ accounts, a percentage of new sales or some combination. As the value of product sponsor assets held in advisors’ clients’ accounts is susceptible to unpredictable market changes, these revenues include variable consideration and are constrained until the date that the fees are determinable. Recordkeeping The Company generates revenues from fees it collects for providing recordkeeping, account maintenance, reporting and other related services to product sponsors. This includes revenues from omnibus processing in which the Company establishes and maintains sub-account records for its clients to reflect the purchase, exchange and redemption of mutual fund shares, and consolidates clients’ trades within a mutual fund. Omnibus processing fees are paid to the Company by the mutual fund or its affiliates and are based on the value of mutual fund assets in accounts for which the Company provides omnibus processing services and the number of accounts in which the related mutual fund positions are held. Recordkeeping revenues also include revenues from networking recordkeeping services. Networking revenues on brokerage assets are correlated to the number of positions or value of assets that the Company administers and are paid by mutual fund and annuity product manufacturers. These recordkeeping revenues are recognized over time as the Company fulfills its performance obligations. As recordkeeping fees are susceptible to unpredictable market changes that influence market value and fund positions, these revenues include variable consideration and are constrained until the date that the fees are determinable. Depending on the contract, the Company is either principal or agent for recordkeeping revenues. In instances in which the Company is providing services to financial product manufacturers on behalf of third parties and does not have ultimate control of the service before transfer to the customer, the Company is considered to be an agent and reports revenues on a net basis. In other cases, where the Company uses a sub-contractor to provide services and is responsible for unperformed services, the Company is considered principal and reports revenues on a gross basis. The following table sets forth asset-based revenues at a disaggregated level (in thousands): Three Months Ended March 31, 2021 2020 Asset-based revenues Client cash $ 97,104 $ 151,398 Sponsorship programs 81,712 64,449 Recordkeeping 85,890 69,659 Total asset-based revenues $ 264,706 $ 285,506 Transaction and Fee Transaction revenues primarily include fees the Company charges to advisors and their clients for executing certain transactions in brokerage and fee-based advisory accounts. Transaction revenues are recognized at the point-in-time that a transaction is executed, which is generally the trade date. Fee revenues may be generated from advisors or their clients. Fee revenues primarily include IRA custodian fees, contract and licensing fees, and other client account fees. In addition, the Company hosts certain advisor conferences that serve as training, education, sales and marketing events, for which the Company collects a fee for attendance. Fee revenues are recognized when the Company satisfies its performance obligations. Recognition varies from point-in-time to over time depending on whether the service is provided once at an identifiable point-in-time or if the service is provided continually over the contract life. The following table sets forth transaction and fee revenues disaggregated by recognition pattern (in thousands): Three Months Ended March 31, 2021 2020 Transaction and fee revenues Point-in-time (1) $ 65,813 $ 65,638 Over time (2) 75,131 71,458 Total transaction and fee revenues $ 140,944 $ 137,096 _______________________________ (1) Transaction and fee revenues recognized point-in-time include revenues such as transaction fees, IRA termination fees and technology fees. (2) Transaction and fee revenues recognized over time include revenues such as error and omission insurance fees, IRA custodian fees and technology fees. The Company is the principal and recognizes transaction and fee revenues on a gross basis as it is primarily responsible for delivering the respective services being provided, which is demonstrated by the Company’s ability to control the fee amounts charged to customers. Interest Income The Company earns interest income from client margin loans, cash segregated under federal and other regulations and cash equivalents. Other Other revenues primarily include unrealized gains and losses on assets held by the Company for its advisor non-qualified deferred compensation plan and model research portfolios, marketing allowances received from certain financial product manufacturers, primarily those who offer alternative investments, such as non-traded real estate investment trusts and business development companies, and other miscellaneous revenues. These revenues are not generated from contracts with customers. Unearned Revenue The Company records unearned revenue when cash payments are received or due in advance of the Company’s performance obligations, including amounts which are refundable. The increase in the unearned revenue balance for the three months ended March 31, 2021 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by $92.3 million o f revenues recognized that were included in the unearned revenue balance as of December 31, 2020. For advisory services, revenue is recognized as the Company provides the administration, brokerage and execution services over time to satisfy the performance obligations. For conference revenue, the Company recognizes revenue as the conferences are held. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS On December 2, 2020, the Company entered into an agreement with Macquarie Management Holdings, Inc. (“Macquarie”) to acquire the wealth management business of Waddell & Reed Financial, Inc. (“Waddell & Reed”) for $300 million. The transaction closed on April 30, 2021. On October 26, 2020, the Company acquired Blaze Portfolio Systems LLC, a technology company that provides an advisor-facing trading and portfolio rebalancing platform. The Company paid $11.6 million at closing and agreed to a potential contingent payment of up to $4.0 million. On August 18, 2020, the Company acquired business relationships with advisors from E.K. Riley Investments, LLC (“E.K. Riley”) and Lucia Securities, LLC (“Lucia”), two unrelated broker-dealers and RIAs, for a combined $18.4 million. Both transactions have potential contingent payments. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. There have been no transfers of assets or liabilities between these fair value measurement classifications during the three months ended March 31, 2021. The Company’s fair value measurements are evaluated within the fair value hierarchy, based on the nature of inputs used to determine the fair value at the measurement date. At March 31, 2021 and December 31, 2020, the Company had the following financial assets and liabilities that are measured at fair value on a recurring basis: Cash Equivalents — The Company’s cash equivalents include money market funds, which are short term in nature with readily determinable values derived from active markets. Securities Owned and Securities Sold, But Not Yet Purchased — The Company’s trading securities consist of house account model portfolios established and managed for the purpose of benchmarking the performance of its fee-based advisory platforms and temporary positions resulting from the processing of client transactions. Examples of these securities include money market funds, U.S. treasury obligations, mutual funds, certificates of deposit and equity and debt securities. The Company uses prices obtained from independent third-party pricing services to measure the fair value of its trading securities. Prices received from the pricing services are validated using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices and review of other relevant market data including implied yields of major categories of securities. In general, these quoted prices are derived from active markets for identical assets or liabilities. When quoted prices in active markets for identical assets and liabilities are not available, the quoted prices are based on similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. For certificates of deposit and treasury securities, the Company utilizes market-based inputs, including observable market interest rates that correspond to the remaining maturities or the next interest reset dates. At March 31, 2021, the Company did not adjust prices received from the independent third-party pricing services. Other Assets — The Company’s other assets include: (1) deferred compensation plan assets that are invested in money market and other mutual funds, which are actively traded and valued based on quoted market prices; and (2) certain non-traded real estate investment trusts and auction rate notes, which are valued using quoted prices for identical or similar securities and other inputs that are observable or can be corroborated by observable market data. Accounts Payable and Accrued Liabilities — The Company’s accounts payable and accrued liabilities include contingent consideration liabilities that are measured using Level 3 inputs. Level 3 Recurring Fair Value Measurements The Company determines the fair value for its contingent consideration obligations using a scenario-based approach whereby the Company assesses the expected number of future transactions. The contingent payment is estimated by applying a discount rate to the expected payment to calculate the fair value as of the valuation date. The Company’s management evaluates the underlying projections and other related factors used in determining fair value each period and makes updates when there have been significant changes in management’s expectations. The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at March 31, 2021 (in thousands): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6,529 $ — $ — $ 6,529 Securities owned — trading: Money market funds 132 — — 132 Mutual funds 27,692 — — 27,692 Equity securities 512 — — 512 Debt securities — 130 — 130 U.S. treasury obligations 19,498 — — 19,498 Total securities owned — trading 47,834 130 — 47,964 Other assets 398,895 9,147 — 408,042 Total assets at fair value $ 453,258 $ 9,277 $ — $ 462,535 Liabilities Securities sold, but not yet purchased: Equity securities $ 83 $ — $ — $ 83 Debt securities — 1,233 — 1,233 Total securities sold, but not yet purchased 83 1,233 — 1,316 Accounts payable and accrued liabilities — — 3,300 3,300 Total liabilities at fair value $ 83 $ 1,233 $ 3,300 $ 4,616 The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at December 31, 2020 (in thousands): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6,205 $ — $ — $ 6,205 Securities owned — trading: Money market funds 125 — — 125 Mutual funds 9,137 — — 9,137 Equity securities 492 — — 492 U.S. treasury obligations 19,498 — — 19,498 Total securities owned — trading 29,252 — — 29,252 Other assets 371,202 8,953 — 380,155 Total assets at fair value $ 406,659 $ 8,953 $ — $ 415,612 Liabilities Securities sold, but not yet purchased: Equity securities $ 203 $ — $ — $ 203 Debt securities — 3 — 3 Total securities sold, but not yet purchased 203 3 — 206 Accounts payable and accrued liabilities — — 3,228 3,228 Total liabilities at fair value $ 203 $ 3 $ 3,228 $ 3,434 |
Held-to-Maturity Securities
Held-to-Maturity Securities | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Held-to-Maturity Securities | HELD-TO-MATURITY SECURITIES The Company holds U.S. government notes, which are recorded at amortized cost because the Company has both the intent and the ability to hold these investments to maturity. Interest income is accrued as earned. Premiums and discounts are amortized using a method that approximates the effective yield method over the term of the security and are recorded as an adjustment to the investment yield. The amortized cost, gross unrealized gain and fair value of held-to-maturity securities were as follows (in thousands): March 31, December 31, Amortized cost $ 11,972 $ 13,235 Gross unrealized gain 116 159 Fair value $ 12,088 $ 13,394 At March 31, 2021, the held-to-maturity securities were scheduled to mature as follows (in thousands): Within one year After one but within five years After five but within ten years Total U.S. government notes — at amortized cost $ 4,999 $ 6,973 $ — $ 11,972 U.S. government notes — at fair value $ 5,048 $ 7,040 $ — $ 12,088 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS The balances in goodwill and intangible assets were a result of various acquisitions. See Note 9 - Goodwill and Other Intangible Assets , in the Company’s audited consolidated financial statements and the related notes in the 2020 Annual Report on Form 10-K for a discussion of the components of goodwill and additional information regarding intangible assets. |
Long-term and Other Borrowings
Long-term and Other Borrowings | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term and Other Borrowings | LONG-TERM AND OTHER BORROWINGS The Company’s outstanding borrowings were as follows (dollars in thousands): March 31, 2021 December 31, 2020 Long-Term Borrowings Balance Applicable Margin Interest Rate Balance Applicable Margin Interest rate Maturity Term Loan B (1) $ 1,056,625 LIBOR+175 bps 1.86 % $ 1,059,300 LIBOR+175 bps 1.90 % 11/12/2026 2025 Senior Notes (1)(2) — Fixed Rate — % 900,000 Fixed Rate 5.75 % 2027 Senior Notes (1)(3) 400,000 Fixed Rate 4.63 % 400,000 Fixed Rate 4.63 % 11/15/2027 2029 Senior Notes (1)(4) 900,000 Fixed Rate 4.00 % — Fixed Rate — % 3/15/2029 Total long-term borrowings 2,356,625 2,359,300 Plus: Unamortized Premium — 7,083 Less: Unamortized Debt Issuance Cost (23,816) (20,969) Net Carrying Value $ 2,332,809 $ 2,345,414 Other Borrowings Parent Revolving Credit Facility $ — ABR+25 bps — % $ — ABR+25 bps — % 3/15/2026 Broker-Dealer Revolving Credit Facility — FFR+125 bps — % — FFR+125 bps — % 7/31/2024 Total borrowings $ 2,332,809 $ 2,345,414 _______________________________ (1) No leverage or interest coverage maintenance covenants. (2) The 2025 Notes were redeemed in March 2021. (3) The 2027 Notes were issued in November 2019 at par. (4) The 2029 Notes were issued in March 2021 at par. Credit Agreement On March 15, 2021, LPLFH and LPLH entered into a fifth amendment agreement (the “Amendment”) to the Company’s amended and restated credit agreement (“Credit Agreement”), which, among other things, increased the size of its senior secured revolving credit facility to $1.0 billion and extended the maturity date of its senior secured revolving credit facility. In connection with the execution of the Amendment, the Company incurred $3.2 million in costs, which are capitalized as debt issuance costs in the unaudited condensed consolidated statements of financial condition. The Credit Agreement subjects the Company to certain financial and non-financial covenants. As of March 31, 2021, the Company was in compliance with such covenants. Issuance of 2029 Senior Notes LPLH raised $900.0 million in aggregate principal amount of 4.00% senior notes on March 15, 2021, which were issued at par (“2029 Senior Notes”). The 2029 Senior Notes are unsecured obligations, governed by an indenture, that will mature on March 15, 2029, and bear interest at the rate of 4.00% per year, with interest payable semi-annually. The Company may redeem all or part of the 2029 Senior Notes at any time prior to March 15, 2024 (subject to a customary “equity claw” redemption right) at 100% of the principal amount redeemed plus a “make-whole” premium. Thereafter, the Company may redeem all or part of the 2029 Senior Notes at annually declining redemption premiums until March 15, 2026, at and after which date the redemption price will be equal to 100% of the principal amount redeemed plus any accrued and unpaid interest thereon. In connection with the issuance of the 2029 Senior Notes, the Company incurred $9.0 million in costs, which are capitalized as debt issuance costs in the unaudited condensed consolidated statements of financial condition. Issuance of 2027 Senior Notes LPLH raised $400.0 million in aggregate principal amount of 4.625% senior notes on November 12, 2019, which were issued at par (“2027 Senior Notes”). The 2027 Senior Notes are unsecured obligations, governed by an indenture, that will mature on November 15, 2027, and bear interest at the rate of 4.625% per year, with interest payable semi-annually. The Company may redeem all or part of the 2027 Senior Notes at any time prior to November 15, 2022 (subject to a customary “equity claw” redemption right) at 100% of the principal amount redeemed plus a “make-whole” premium. Thereafter, the Company may redeem all or part of the 2027 Senior Notes at annually declining redemption premiums until November 15, 2024, at and after which date the redemption price will be equal to 100% of the principal amount redeemed plus any accrued and unpaid interest thereon. Redemption of 2025 Senior Notes LPLH issued $500.0 million aggregate principal amount of 5.75% senior notes on March 10, 2017 and $400.0 million aggregate principal amount of 5.75% senior notes on September 21, 2017 (together, the “2025 Senior Notes”). The company used the proceeds from the issuance of the 2029 Senior Notes on March 15, 2021, along with existing corporate cash available, to redeem the 2025 Senior Notes. In connection with the transaction, the Company recognized $24.4 million as a loss on extinguishment of debt on the unaudited condensed consolidated statements of income. Term Loan B Borrowings under the senior secured Term Loan B facility bear interest at a rate per annum of 175 basis points over the Eurodollar Rate or 75 basis points over the base rate (as defined in the Credit Agreement), and have no leverage or interest coverage maintenance covenants. The Eurodollar Rate option is the one-, two-, three- or six-month LIBOR rate, as selected by LPLH, or, with the approval of the applicable lenders, twelve-month LIBOR rate or the LIBOR rate for another period acceptable to the Administrative Agent (including a shorter period). The LIBOR rate, on which the Eurodollar Rate is based, is expected to be discontinued by June 30, 2023. The Credit Agreement permits LPLH to agree with the administrative agent for the Credit Agreement on a replacement benchmark rate subject to certain conditions (including that a majority of the lenders do not object to such replacement rate within a specified period of time following notice thereof from the administrative agent). The Company is required to make quarterly payments on the Term Loan B facility equal to 0.25% of the aggregate principal amount of the loans under the Term Loan B facility. Parent Revolving Credit Facility Borrowings under the revolving credit facility bear interest at a rate per annum ranging from 125 to 175 basis points over the Eurodollar Rate or 25 to 75 basis points over the base rate, depending on the Consolidated Secured Debt to Consolidated EBITDA Ratio (as defined in the Credit Agreement). Broker-Dealer Revolving Credit Facility On July 31, 2019, LPL Financial, the Company’s broker-dealer subsidiary, entered into a committed, unsecured revolving credit facility that matures on July 31, 2024 and allows for a maximum borrowing of $300.0 million. Borrowings bear interest at a rate per annum ranging from 112.5 to 137.5 basis points over the Federal Funds Rate or Eurodollar Rate, depending on the Parent Leverage Ratio (each as defined in the broker-dealer credit agreement). The broker-dealer credit agreement subjects LPL Financial to certain financial and non-financial covenants. LPL Financial was in compliance with such covenants as of March 31, 2021. Other External Lines of Credit LPL Financial maintained six uncommitted lines of credit as of March 31, 2021. Two of the lines have limits that are unspecified, and that depend primarily on LPL Financial’s ability to provide sufficient collateral. The other four lines have a total limit of $275.0 million, one of which allows for collateralized borrowings while the other three allow for uncollateralized borrowings. There were no balances outstanding as of March 31, 2021. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Operating Leases | LEASES The Company determines if an arrangement is a lease or contains a lease at inception. The Company has operating and finance leases for corporate offices and equipment with remaining lease terms of 1 to 16 years, some of which include options to extend the lease for up to 20 years. For leases with renewal options, the lease term is extended to reflect renewal options the Company is reasonably certain to exercise. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Finance lease assets are included in fixed assets in the unaudited condensed consolidated statements of financial condition and at March 31, 2021 were $101.0 million. The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating lease cost $ 4,823 $ 4,417 Finance lease cost: Amortization of right-of-use assets $ 1,286 $ 1,285 Interest on lease liabilities 2,104 2,103 Total finance lease cost $ 3,390 $ 3,388 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,406 $ 5,000 Operating cash flows from finance leases $ 2,104 $ 2,103 Financing cash flows from finance leases $ 1,031 $ 997 Supplemental weighted-average information related to leases was as follows: March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years): Finance leases 25.2 25.3 Operating leases 7.7 7.9 Weighted-average discount rate: Finance leases 7.83 % 7.82 % Operating leases 7.08 % 7.07 % Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands): Operating Leases Finance Leases 2021 - remainder $ 16,617 $ 6,659 2022 22,577 8,802 2023 22,222 8,577 2024 22,024 8,727 2025 21,724 8,879 Thereafter 75,333 224,760 Total lease payments 180,497 266,404 Less imputed interest 44,078 160,011 Total $ 136,419 $ 106,393 |
Finance Leases | LEASES The Company determines if an arrangement is a lease or contains a lease at inception. The Company has operating and finance leases for corporate offices and equipment with remaining lease terms of 1 to 16 years, some of which include options to extend the lease for up to 20 years. For leases with renewal options, the lease term is extended to reflect renewal options the Company is reasonably certain to exercise. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Finance lease assets are included in fixed assets in the unaudited condensed consolidated statements of financial condition and at March 31, 2021 were $101.0 million. The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating lease cost $ 4,823 $ 4,417 Finance lease cost: Amortization of right-of-use assets $ 1,286 $ 1,285 Interest on lease liabilities 2,104 2,103 Total finance lease cost $ 3,390 $ 3,388 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,406 $ 5,000 Operating cash flows from finance leases $ 2,104 $ 2,103 Financing cash flows from finance leases $ 1,031 $ 997 Supplemental weighted-average information related to leases was as follows: March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years): Finance leases 25.2 25.3 Operating leases 7.7 7.9 Weighted-average discount rate: Finance leases 7.83 % 7.82 % Operating leases 7.08 % 7.07 % Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands): Operating Leases Finance Leases 2021 - remainder $ 16,617 $ 6,659 2022 22,577 8,802 2023 22,222 8,577 2024 22,024 8,727 2025 21,724 8,879 Thereafter 75,333 224,760 Total lease payments 180,497 266,404 Less imputed interest 44,078 160,011 Total $ 136,419 $ 106,393 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Service and Development Contracts The Company is party to certain long-term contracts for systems and services that enable back-office trade processing and clearing for its product and service offerings. Guarantees The Company occasionally enters into contracts that contingently require it to indemnify certain parties against third-party claims. The terms of these obligations vary and, because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the amount that it could be obligated to pay under such contracts. LPL Financial provides guarantees to securities clearing houses and exchanges under their standard membership agreements, which require a member to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearing houses and exchanges, all other members would be required to meet any shortfall. The Company’s liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these agreements is remote. Accordingly, no liability has been recognized for these transactions. Loan Commitments From time to time, LPL Financial makes loans to its advisors, primarily to newly recruited advisors to assist in the transition process, which may be forgivable. Due to timing differences, LPL Financial may make commitments to issue such loans prior to actually funding them. These commitments are generally contingent upon certain events occurring, including but not limited to the advisor joining LPL Financial. LPL Financial had no significant unfunded loan commitments at March 31, 2021. Legal and Regulatory Matters The Company is subject to extensive regulation and supervision by U.S. federal and state agencies and various self-regulatory organizations. The Company and its advisors periodically engage with such agencies and organizations, in the context of examinations or otherwise, to respond to inquiries, informational requests and investigations. From time to time, such engagements result in regulatory complaints or other matters, the resolution of which has in the past and may in the future include fines, customer restitution and other remediation. Assessing the probability of a loss occurring and the timing and amount of any loss related to a legal proceeding or regulatory matter is inherently difficult. While the Company exercises significant and complex judgments to make certain estimates presented in its consolidated financial statements, there are particular uncertainties and complexities involved when assessing the potential outcomes of legal proceedings and regulatory matters. The Company’s assessment process considers a variety of factors and assumptions, which may include: the procedural status of the matter and any recent developments; prior experience and the experience of others in similar matters; the size and nature of potential exposures; available defenses; the progress of fact discovery; the opinions of counsel and experts; potential opportunities for settlement and the status of any settlement discussions; as well as the potential for insurance coverage and indemnification, if available. The Company monitors these factors and assumptions for new developments and re-assesses the likelihood that a loss will occur and the estimated range or amount of loss, if those amounts can be reasonably determined. The Company has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable and the amount can be reasonably estimated. Third-Party Insurance The Company maintains third-party insurance coverage for certain potential legal proceedings, including those involving certain client claims. With respect to such client claims, the estimated losses on many of the pending matters are less than the applicable deductibles of the insurance policies. Self-Insurance The Company has self-insurance for certain potential liabilities through the Captive Insurance Subsidiary. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated by considering, in part, historical claims experience, severity factors and other actuarial assumptions. The estimated accruals for these potential liabilities could be significantly affected if future occurrences and claims differ from such assumptions and historical trends, so there are particular complexities and uncertainties involved when assessing the adequacy of loss reserves for potential liabilities that are self-insured. As of March 31, 2021 and December 31, 2020, these self-insurance liabilities wer e $57.2 million and $51.5 million, respectively, and are included in accounts payable and accrued liabilities in the unaudited condensed consolidated statements of financial condition. Self-insurance related charges are included in other expenses in the unaudited condensed consolidated statements of income. Other Commitments As of March 31, 2021, the Company had approxi mately $387.8 million of client margin loans that were collateralized with securities having a fair value of approximatel y $542.9 million t hat LPL Financial can repledge, loan or sell. Of these securities, approximately $67.1 million were client-owned securities pledged to the Options Clearing Corporation as collateral to secure client obligations related to options positions. As of March 31, 2021, there were no restrictions that materially limited the Company’s ability to repledge, loan or sell the remainin g $475.8 million of client collateral. Securities owned, trading, on the unaudited condensed consolidated statements of financial condition includes $4.5 million pledged to the Options Clearing Corporation at both March 31, 2021 and December 31, 2020, and $15.0 million pledged to the National Securities Clearing Corporation at both March 31, 2021 and December 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | STOCKHOLDERS’ EQUITY Dividends The payment, timing, and amount of any dividends are subject to approval by the Company’s board of directors (the “Board of Directors”) as well as certain limits under the Credit Agreement and indentures. Cash dividends per share of common stock and total cash dividends paid on a quarterly basis were as follows (in millions, except per share data): 2021 2020 Dividend per Share Total Cash Dividend Dividend per Share Total Cash Dividend First quarter $ 0.25 $ 20.0 $ 0.25 $ 19.7 Share Repurchases The Company engages in share repurchase programs, which are approved by the Board of Directors, pursuant to which the Company may repurchase its issued and outstanding shares of common stock from time to time. Repurchased shares are included in treasury stock on the unaudited condensed consolidated statements of financial condition. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | SHARE-BASED COMPENSATION In November 2010, the Company adopted the 2010 Omnibus Equity Incentive Plan (as amended and restated in May 2015, the “2010 Plan”), which provides for the granting of stock options, warrants, restricted stock awards, restricted stock units, deferred stock units, performance stock units and other equity-based compensation. Since its adoption, awards have been and are only made out of the 2010 Plan. As of March 31, 2021, the 2010 Plan had 20,055,945 shares authorized for grant and 2,072,500 shares remaining available for future issuance. Stock Options and Warrants The following table summarizes the Company’s stock option and warrant activity as of and for the three months ended March 31, 2021: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Outstanding — December 31, 2020 2,000,383 $ 45.57 Granted — $ — Exercised (255,239) $ 48.32 Forfeited and Expired (18,550) $ 50.19 Outstanding — March 31, 2021 1,726,594 $ 45.12 5.18 $ 167,553 Exercisable — March 31, 2021 1,611,787 $ 42.82 4.98 $ 160,123 Exercisable and expected to vest — March 31, 2021 1,721,067 $ 45.01 5.16 $ 167,196 The following table summarizes information about outstanding stock options and warrants as of March 31, 2021: Outstanding Exercisable Range of Exercise Prices Number of Shares Weighted- Average Exercise Price Weighted-Average Number of Shares Weighted- Average Exercise Price $19.85 - $25.00 379,343 $ 19.85 4.87 379,343 $ 19.85 $25.01 - $35.00 269,458 $ 29.82 1.38 269,458 $ 29.82 $35.01 - $45.00 335,412 $ 39.64 5.82 335,412 $ 39.64 $45.01 - $65.00 190,378 $ 48.40 3.62 190,378 $ 48.40 $65.01 - $75.00 247,823 $ 65.53 6.87 246,312 $ 65.50 $75.01 - $80.00 304,180 $ 77.53 7.81 190,884 $ 77.53 1,726,594 $ 45.12 5.18 1,611,787 $ 42.82 The Company recognized share-based compensation related to the vesting of stock options awarded to employees and officers of $0.8 million and $1.4 million during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, total unrecognized compensation cost related to non-vested stock options granted to employees and officers was $1.9 million, which is expected to be recognized over a weighted-average period of 0.91 years. Restricted Stock and Stock Units The following summarizes the Company’s activity in its restricted stock awards and stock units, which include restricted stock units, deferred stock units and performance stock units, for the three months ended March 31, 2021: Restricted Stock Awards Stock Units Number of Weighted-Average Number of Weighted-Average Outstanding — December 31, 2020 5,560 $ 64.74 904,445 $ 77.94 Granted — $ — 436,872 $ 143.53 Vested — $ — (295,871) $ 81.25 Forfeited — $ — (11,760) $ 83.38 Outstanding — March 31, 2021 5,560 $ 64.74 1,033,686 (1) $ 104.65 Expected to vest — March 31, 2021 5,560 $ 64.74 918,587 $ 107.62 _______________________________ (1) Includes 53,133 vested and undistributed deferred stock units. The Company grants restricted stock awards and deferred stock units to its directors and restricted stock units and performance stock units to its employees and officers. Restricted stock awards and stock units must vest or are subject to forfeiture; however, restricted stock awards are included in shares outstanding upon grant and have the same dividend and voting rights as the Company’s common stock. The Company recognized $10.2 million and $6.7 million of share-based compensation related to the vesting of these restricted stock awards and stock units during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, total unrecognized compensation cost for restricted stock awards and stock units was $79.2 million, which is expected to be recognized over a weighted-average remaining period of 2.49 years. The Company also grants restricted stock units to its advisors and to financial institutions. The Company recognized share-based compensation of $0.6 million and $0.7 million related to the vesting of these awards during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, total unrecognized compensation cost for restricted stock units granted to advisors and financial institutions was $4.0 million, which is expected to be recognized over a weighted-average remaining period of 2.02 years. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if dilutive potential shares of common stock had been issued. The calculation of basic and diluted earnings per share for the periods noted was as follows (in thousands, except per share data): Three Months Ended March 31, 2021 2020 Net income $ 129,620 $ 155,641 Basic weighted-average number of shares outstanding 79,697 79,507 Dilutive common share equivalents 1,925 1,659 Diluted weighted-average number of shares outstanding 81,622 81,166 Basic earnings per share $ 1.63 $ 1.96 Diluted earnings per share $ 1.59 $ 1.92 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company’s effective income tax rate differs from the federal corporate tax rate of 21.0%, primarily as a result of state taxes, settlement contingencies, tax credits and other permanent differences in tax deductibility of certain expenses. These items resulted in effective tax rates of 21.5% and 25.0% for the three months ended March 31, 2021 and 2020, respectively. The decrease in our effective income tax rate for the three months ended March 31, 2021 compared to 2020 was primarily due to an increase in tax benefits associated with stock compensation under Accounting Standards Codification (“ASC”) Topic 718, and a reduction in unrecognized tax benefits related to the statute of limitations. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS In the ordinary course of business, the Company has related party transactions with beneficial owners of more than ten percent of the Company’s outstanding common stock. Additionally, through its subsidiary LPL Financial, the Company provides services and charitable contributions to the LPL Financial Foundation, an organization that provides volunteer and financial support within the Company’s local communities. The Company recognized revenues for services provided to these related parties of $1.4 million and $1.1 million during the three months ended March 31, 2021 and 2020, respectively. The Company incurred expenses for the services provided by these related parties of $0.4 million and $0.5 million during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and 2020, receivables from and payables to related parties were not material. |
Net Capital and Regulatory Requ
Net Capital and Regulatory Requirements | 3 Months Ended |
Mar. 31, 2021 | |
Brokers and Dealers [Abstract] | |
Net Capital and Regulatory Requirements | NET CAPITAL AND REGULATORY REQUIREMENTS The Company’s registered broker-dealer, LPL Financial, is subject to the SEC’s Net Capital Rule (Rule 15c3-1 under the Exchange Act), which requires the maintenance of minimum net capital. The net capital rules also provide that the broker-dealer’s capital may not be withdrawn if the resulting net capital would be less than minimum requirements. Additionally, certain withdrawals require the approval of the SEC and FINRA to the extent they exceed defined levels, even though such withdrawals would not cause net capital to be less than minimum requirements. Net capital and the related net capital requirement may fluctuate on a daily basis. LPL Financial is a clearing broker-dealer and, as of March 31, 2021, had net capital of $98.9 million with a minimum net capital requirement of $11.5 million. The Company’s subsidiary, PTC, also operates in a highly regulated industry and is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have substantial monetary and non-monetary impacts on PTC’s operations. As of March 31, 2021 and December 31, 2020, LPL Financial and PTC met all capital adequacy requirements to which they were subject. |
Financial Instruments with Off-
Financial Instruments with Off-Balance-Sheet Credit Risk and Concentrations of Credit Risk | 3 Months Ended |
Mar. 31, 2021 | |
Concentration Risk Credit Risk Financial Instruments Off Balance Sheet Risk [Abstract] | |
Financial Instruments with Off-Balance-Sheet Credit Risk and Concentrations of Credit Risk | FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK LPL Financial’s client securities activities are transacted on either a cash or margin basis. In margin transactions, LPL Financial extends credit to the advisor’s client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. As clients write options contracts or sell securities short, LPL Financial may incur losses if the clients do not fulfill their obligations and the collateral in the clients’ accounts is not sufficient to fully cover losses that clients may incur from these strategies. To control this risk, LPL Financial monitors margin levels daily and clients are required to deposit additional collateral, or reduce positions, when necessary. LPL Financial is obligated to settle transactions with brokers and other financial institutions even if its advisors’ clients fail to meet their obligation to LPL Financial. Clients are required to complete their transactions on the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, LPL Financial may incur losses. In addition, the Company occasionally enters into certain types of contracts to fulfill its sale of when-issued securities. When-issued securities have been authorized but are contingent upon the actual issuance of the security. LPL Financial has established procedures to reduce this risk by generally requiring that clients deposit cash or securities into their account prior to placing an order. LPL Financial may at times hold equity securities on both a long and short basis that are recorded on the unaudited condensed consolidated statements of financial condition at market value. While long inventory positions represent LPL Financial’s ownership of securities, short inventory positions represent obligations of LPL Financial to deliver specified securities at a contracted price, which may differ from market prices prevailing at the time of completion of the transaction. Accordingly, both long and short inventory positions may result in losses or gains to LPL Financial as market values of securities fluctuate. To mitigate the risk of losses, long and short positions are marked-to-market daily and are continuously monitored by LPL Financial. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSOn April 30, 2021, the Company paid $300 million to acquire all the equity interest of the wealth management business of Waddell & Reed, which includes a broker-dealer and registered investment advisor, and certain of its subsidiaries. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which require the Company to make estimates and assumptions regarding the valuation of certain financial instruments, intangible assets, allowance for doubtful accounts, share-based compensation, accruals for liabilities, income taxes, revenue and expense accruals, and other matters that affect the consolidated financial statements and related disclosures. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the results for the interim periods presented. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements. The unaudited condensed consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of results of income, comprehensive income, financial position and cash flows in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2020, contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”). |
Recently Issued & Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements There are no recently issued accounting pronouncements that would materially impact the Company’s consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue - Reporting Category [Table Text Block] | The following table presents total commission revenues disaggregated by investment product category (in thousands): Three Months Ended March 31, 2021 2020 Commission revenues Annuities $ 280,776 $ 245,662 Mutual funds 173,150 156,156 Fixed income 32,162 29,125 Equities 38,911 37,421 Other 32,230 35,080 Total commission revenues $ 557,229 $ 503,444 |
Disaggregation of Revenue - Reporting Category & Timing of Transfer of Good or Service [Table Text Block] | The following table presents sales-based and trailing commission revenues disaggregated by product category (in thousands): Three Months Ended March 31, 2021 2020 Commission revenues Sales-based Annuities $ 95,539 $ 92,525 Mutual funds 47,279 45,534 Fixed income 32,162 29,125 Equities 38,911 37,421 Other 22,382 23,786 Total sales-based revenues $ 236,273 $ 228,391 Trailing Annuities $ 185,237 $ 153,137 Mutual funds 125,871 110,622 Other 9,848 11,294 Total trailing revenues $ 320,956 $ 275,053 Total commission revenues $ 557,229 $ 503,444 |
Disaggregation of Revenue - Product and Service [Table Text Block] | The following table sets forth asset-based revenues at a disaggregated level (in thousands): Three Months Ended March 31, 2021 2020 Asset-based revenues Client cash $ 97,104 $ 151,398 Sponsorship programs 81,712 64,449 Recordkeeping 85,890 69,659 Total asset-based revenues $ 264,706 $ 285,506 |
Disaggregation of Revenue - Timing of Transfer of Good or Service [Table Text Block] | The following table sets forth transaction and fee revenues disaggregated by recognition pattern (in thousands): Three Months Ended March 31, 2021 2020 Transaction and fee revenues Point-in-time (1) $ 65,813 $ 65,638 Over time (2) 75,131 71,458 Total transaction and fee revenues $ 140,944 $ 137,096 _______________________________ (1) Transaction and fee revenues recognized point-in-time include revenues such as transaction fees, IRA termination fees and technology fees. (2) Transaction and fee revenues recognized over time include revenues such as error and omission insurance fees, IRA custodian fees and technology fees. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial assets and financial liabilities measured at fair value on a recurring basis | The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at March 31, 2021 (in thousands): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6,529 $ — $ — $ 6,529 Securities owned — trading: Money market funds 132 — — 132 Mutual funds 27,692 — — 27,692 Equity securities 512 — — 512 Debt securities — 130 — 130 U.S. treasury obligations 19,498 — — 19,498 Total securities owned — trading 47,834 130 — 47,964 Other assets 398,895 9,147 — 408,042 Total assets at fair value $ 453,258 $ 9,277 $ — $ 462,535 Liabilities Securities sold, but not yet purchased: Equity securities $ 83 $ — $ — $ 83 Debt securities — 1,233 — 1,233 Total securities sold, but not yet purchased 83 1,233 — 1,316 Accounts payable and accrued liabilities — — 3,300 3,300 Total liabilities at fair value $ 83 $ 1,233 $ 3,300 $ 4,616 The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at December 31, 2020 (in thousands): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6,205 $ — $ — $ 6,205 Securities owned — trading: Money market funds 125 — — 125 Mutual funds 9,137 — — 9,137 Equity securities 492 — — 492 U.S. treasury obligations 19,498 — — 19,498 Total securities owned — trading 29,252 — — 29,252 Other assets 371,202 8,953 — 380,155 Total assets at fair value $ 406,659 $ 8,953 $ — $ 415,612 Liabilities Securities sold, but not yet purchased: Equity securities $ 203 $ — $ — $ 203 Debt securities — 3 — 3 Total securities sold, but not yet purchased 203 3 — 206 Accounts payable and accrued liabilities — — 3,228 3,228 Total liabilities at fair value $ 203 $ 3 $ 3,228 $ 3,434 |
Held-to-Maturity Securities (Ta
Held-to-Maturity Securities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of amortized cost, gross unrealized gain (loss), and fair value of securities held-to-maturity | The amortized cost, gross unrealized gain and fair value of held-to-maturity securities were as follows (in thousands): March 31, December 31, Amortized cost $ 11,972 $ 13,235 Gross unrealized gain 116 159 Fair value $ 12,088 $ 13,394 |
Maturities of securities held-to-maturity | At March 31, 2021, the held-to-maturity securities were scheduled to mature as follows (in thousands): Within one year After one but within five years After five but within ten years Total U.S. government notes — at amortized cost $ 4,999 $ 6,973 $ — $ 11,972 U.S. government notes — at fair value $ 5,048 $ 7,040 $ — $ 12,088 |
Long-term and Other Borrowings
Long-term and Other Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term and Other Borrowings | The Company’s outstanding borrowings were as follows (dollars in thousands): March 31, 2021 December 31, 2020 Long-Term Borrowings Balance Applicable Margin Interest Rate Balance Applicable Margin Interest rate Maturity Term Loan B (1) $ 1,056,625 LIBOR+175 bps 1.86 % $ 1,059,300 LIBOR+175 bps 1.90 % 11/12/2026 2025 Senior Notes (1)(2) — Fixed Rate — % 900,000 Fixed Rate 5.75 % 2027 Senior Notes (1)(3) 400,000 Fixed Rate 4.63 % 400,000 Fixed Rate 4.63 % 11/15/2027 2029 Senior Notes (1)(4) 900,000 Fixed Rate 4.00 % — Fixed Rate — % 3/15/2029 Total long-term borrowings 2,356,625 2,359,300 Plus: Unamortized Premium — 7,083 Less: Unamortized Debt Issuance Cost (23,816) (20,969) Net Carrying Value $ 2,332,809 $ 2,345,414 Other Borrowings Parent Revolving Credit Facility $ — ABR+25 bps — % $ — ABR+25 bps — % 3/15/2026 Broker-Dealer Revolving Credit Facility — FFR+125 bps — % — FFR+125 bps — % 7/31/2024 Total borrowings $ 2,332,809 $ 2,345,414 _______________________________ (1) No leverage or interest coverage maintenance covenants. (2) The 2025 Notes were redeemed in March 2021. (3) The 2027 Notes were issued in November 2019 at par. (4) The 2029 Notes were issued in March 2021 at par. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating lease cost $ 4,823 $ 4,417 Finance lease cost: Amortization of right-of-use assets $ 1,286 $ 1,285 Interest on lease liabilities 2,104 2,103 Total finance lease cost $ 3,390 $ 3,388 |
Schedule of Supplemental Cash Flow information related to leases | Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,406 $ 5,000 Operating cash flows from finance leases $ 2,104 $ 2,103 Financing cash flows from finance leases $ 1,031 $ 997 |
Schedule of Supplemental weighted-average information related to leases | Supplemental weighted-average information related to leases was as follows: March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years): Finance leases 25.2 25.3 Operating leases 7.7 7.9 Weighted-average discount rate: Finance leases 7.83 % 7.82 % Operating leases 7.08 % 7.07 % |
Schedule of Maturities of Lease Liabilities - Operating Leases | Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands): Operating Leases Finance Leases 2021 - remainder $ 16,617 $ 6,659 2022 22,577 8,802 2023 22,222 8,577 2024 22,024 8,727 2025 21,724 8,879 Thereafter 75,333 224,760 Total lease payments 180,497 266,404 Less imputed interest 44,078 160,011 Total $ 136,419 $ 106,393 |
Schedule of Maturities of Lease Liabilities - Finance Leases | Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands): Operating Leases Finance Leases 2021 - remainder $ 16,617 $ 6,659 2022 22,577 8,802 2023 22,222 8,577 2024 22,024 8,727 2025 21,724 8,879 Thereafter 75,333 224,760 Total lease payments 180,497 266,404 Less imputed interest 44,078 160,011 Total $ 136,419 $ 106,393 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Dividends Declared [Table Text Block] | Cash dividends per share of common stock and total cash dividends paid on a quarterly basis were as follows (in millions, except per share data): 2021 2020 Dividend per Share Total Cash Dividend Dividend per Share Total Cash Dividend First quarter $ 0.25 $ 20.0 $ 0.25 $ 19.7 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option and warrant activity | The following table summarizes the Company’s stock option and warrant activity as of and for the three months ended March 31, 2021: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Outstanding — December 31, 2020 2,000,383 $ 45.57 Granted — $ — Exercised (255,239) $ 48.32 Forfeited and Expired (18,550) $ 50.19 Outstanding — March 31, 2021 1,726,594 $ 45.12 5.18 $ 167,553 Exercisable — March 31, 2021 1,611,787 $ 42.82 4.98 $ 160,123 Exercisable and expected to vest — March 31, 2021 1,721,067 $ 45.01 5.16 $ 167,196 |
Summary of outstanding stock options and warrant information | The following table summarizes information about outstanding stock options and warrants as of March 31, 2021: Outstanding Exercisable Range of Exercise Prices Number of Shares Weighted- Average Exercise Price Weighted-Average Number of Shares Weighted- Average Exercise Price $19.85 - $25.00 379,343 $ 19.85 4.87 379,343 $ 19.85 $25.01 - $35.00 269,458 $ 29.82 1.38 269,458 $ 29.82 $35.01 - $45.00 335,412 $ 39.64 5.82 335,412 $ 39.64 $45.01 - $65.00 190,378 $ 48.40 3.62 190,378 $ 48.40 $65.01 - $75.00 247,823 $ 65.53 6.87 246,312 $ 65.50 $75.01 - $80.00 304,180 $ 77.53 7.81 190,884 $ 77.53 1,726,594 $ 45.12 5.18 1,611,787 $ 42.82 |
Summary of restricted stock awards and restricted stock units activity | The following summarizes the Company’s activity in its restricted stock awards and stock units, which include restricted stock units, deferred stock units and performance stock units, for the three months ended March 31, 2021: Restricted Stock Awards Stock Units Number of Weighted-Average Number of Weighted-Average Outstanding — December 31, 2020 5,560 $ 64.74 904,445 $ 77.94 Granted — $ — 436,872 $ 143.53 Vested — $ — (295,871) $ 81.25 Forfeited — $ — (11,760) $ 83.38 Outstanding — March 31, 2021 5,560 $ 64.74 1,033,686 (1) $ 104.65 Expected to vest — March 31, 2021 5,560 $ 64.74 918,587 $ 107.62 _______________________________ (1) Includes 53,133 vested and undistributed deferred stock units. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share computations | The calculation of basic and diluted earnings per share for the periods noted was as follows (in thousands, except per share data): Three Months Ended March 31, 2021 2020 Net income $ 129,620 $ 155,641 Basic weighted-average number of shares outstanding 79,697 79,507 Dilutive common share equivalents 1,925 1,659 Diluted weighted-average number of shares outstanding 81,622 81,166 Basic earnings per share $ 1.63 $ 1.96 Diluted earnings per share $ 1.59 $ 1.92 |
Organization and Description _2
Organization and Description of the Company Consolidation, Parent Ownership Interest (Details) - LPL Financial LLC [Member] | 3 Months Ended |
Mar. 31, 2021 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership Interest Percentage In Subsidiary | 100.00% |
Number of States in which Entity Operates | 50 |
Revenue - Commission Revenue Di
Revenue - Commission Revenue Disaggregated by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Commission | $ 557,229 | $ 503,444 |
Annuities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 280,776 | 245,662 |
Mutual Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 173,150 | 156,156 |
Fixed Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 32,162 | 29,125 |
Equities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 38,911 | 37,421 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | $ 32,230 | $ 35,080 |
Revenue - Commission Revenue _2
Revenue - Commission Revenue Disaggregated by Product Category and Timing of Transfer of Good or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Commission | $ 557,229 | $ 503,444 |
Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 236,273 | 228,391 |
Over time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 320,956 | 275,053 |
Annuities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 280,776 | 245,662 |
Annuities [Member] | Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 95,539 | 92,525 |
Annuities [Member] | Over time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 185,237 | 153,137 |
Mutual Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 173,150 | 156,156 |
Mutual Funds [Member] | Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 47,279 | 45,534 |
Mutual Funds [Member] | Over time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 125,871 | 110,622 |
Fixed Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 32,162 | 29,125 |
Fixed Income [Member] | Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 32,162 | 29,125 |
Equities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 38,911 | 37,421 |
Equities [Member] | Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 38,911 | 37,421 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 32,230 | 35,080 |
Other [Member] | Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | 22,382 | 23,786 |
Other [Member] | Over time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Commission | $ 9,848 | $ 11,294 |
Revenue - Asset-based Revenue d
Revenue - Asset-based Revenue disaggregated by Product and Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Asset Based Fees | $ 264,706 | $ 285,506 |
Client Cash Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Asset Based Fees | 97,104 | 151,398 |
Sponsorship Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Asset Based Fees | 81,712 | 64,449 |
Recordkeeping [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Asset Based Fees | $ 85,890 | $ 69,659 |
Revenue - Transaction and Fee R
Revenue - Transaction and Fee Revenue Disaggregated by Timing of Transfer of Good or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Transaction And Other Fees | $ 140,944 | $ 137,096 |
Point-in-time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Transaction And Other Fees | 65,813 | 65,638 |
Over time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Transaction And Other Fees | $ 75,131 | $ 71,458 |
Revenue - Unearned Revenue Reco
Revenue - Unearned Revenue Recognized (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Unearned Revenue [Abstract] | |
Deferred Revenue, Revenue Recognized | $ 92.3 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | Apr. 30, 2021 | Oct. 26, 2020 | Aug. 18, 2020 |
Waddell & Reed Financial, Inc. | Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 300 | ||
Blaze Portfolio Systems LLC | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 11.6 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 4 | ||
E.K. Riley Investments, LLC and Lucia Securities, LLC [Domain] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 18.4 | ||
Business Acquisition, Effective Date of Acquisition | Aug. 18, 2020 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | $ 47,964 | $ 29,252 |
Securities sold, but not yet purchased | 1,316 | 206 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,529 | 6,205 |
Securities owned — trading | 47,964 | 29,252 |
Other assets | 408,042 | 380,155 |
Total assets at fair value | 462,535 | 415,612 |
Securities sold, but not yet purchased | 1,316 | 206 |
Accounts payable and accrued liabilities | 3,300 | 3,228 |
Total liabilities at fair value | 4,616 | 3,434 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,529 | 6,205 |
Securities owned — trading | 47,834 | 29,252 |
Other assets | 398,895 | 371,202 |
Total assets at fair value | 453,258 | 406,659 |
Securities sold, but not yet purchased | 83 | 203 |
Accounts payable and accrued liabilities | 0 | 0 |
Total liabilities at fair value | 83 | 203 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Securities owned — trading | 130 | 0 |
Other assets | 9,147 | 8,953 |
Total assets at fair value | 9,277 | 8,953 |
Securities sold, but not yet purchased | 1,233 | 3 |
Accounts payable and accrued liabilities | 0 | 0 |
Total liabilities at fair value | 1,233 | 3 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Securities owned — trading | 0 | 0 |
Other assets | 0 | 0 |
Total assets at fair value | 0 | 0 |
Securities sold, but not yet purchased | 0 | 0 |
Accounts payable and accrued liabilities | 3,300 | 3,228 |
Total liabilities at fair value | 3,300 | 3,228 |
Equity Securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 83 | 203 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 83 | 203 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 0 | 0 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 0 | 0 |
Debt Securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 1,233 | 3 |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 0 | 0 |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 1,233 | 3 |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities sold, but not yet purchased | 0 | 0 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 132 | 125 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 132 | 125 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Mutual Funds [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 27,692 | 9,137 |
Mutual Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 27,692 | 9,137 |
Mutual Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Mutual Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Equity Securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 512 | 492 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 512 | 492 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Equity Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
Debt Securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 130 | |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 130 | |
Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | |
U.S. treasury obligations [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 19,498 | 19,498 |
U.S. treasury obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 19,498 | 19,498 |
U.S. treasury obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | 0 | 0 |
U.S. treasury obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities owned — trading | $ 0 | $ 0 |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Summary of amortized cost, gross unrealized gain (loss) and fair value of securities held-to-maturity | ||
U.S. government notes - at amortized cost, Total | $ 11,972 | $ 13,235 |
U.S. Treasury Securities [Member] | ||
Summary of amortized cost, gross unrealized gain (loss) and fair value of securities held-to-maturity | ||
U.S. government notes - at amortized cost, Total | 11,972 | 13,235 |
Gross unrealized gain | 116 | 159 |
U.S. government notes - at fair value, Total | $ 12,088 | $ 13,394 |
Held-to-Maturity Securities (_2
Held-to-Maturity Securities (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Maturities of securities held-to-maturity | ||
U.S. government notes - at amortized cost, Total | $ 11,972 | $ 13,235 |
U.S. Treasury Securities [Member] | ||
Maturities of securities held-to-maturity | ||
U.S. government notes - at amortized cost, Within one year | 4,999 | |
U.S. government notes - at amortized cost, After one but within five years | 6,973 | |
U.S. government notes - at amortized cost, After five but within ten years | 0 | |
U.S. government notes - at amortized cost, Total | 11,972 | 13,235 |
U.S. government notes - at fair value, Within one year | 5,048 | |
U.S. government notes - at fair value, After one but within five years | 7,040 | |
U.S. government notes - at fair value, After five but within ten years | 0 | |
U.S. government notes - at fair value, Total | $ 12,088 | $ 13,394 |
Long-term and Other Borrowing_2
Long-term and Other Borrowings (Credit Agreement Outstanding) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 15, 2021 | Nov. 12, 2019 | Sep. 21, 2017 | Mar. 10, 2017 | |
Borrowings [Line Items] | ||||||
Long-TermSeniorDebtGross | $ 2,356,625 | $ 2,359,300 | ||||
Debt Instrument, Unamortized Premium | 0 | 7,083 | ||||
Less Unamortized Debt Issuance Cost | (23,816) | (20,969) | ||||
Long-Term Senior Debt, Net | 2,332,809 | 2,345,414 | ||||
RevolvingCreditFacilityLPLH | 0 | 0 | ||||
Long-term and other borrowings, net | 2,332,809 | 2,345,414 | ||||
Secured Debt [Member] | Fourth Amendment Agreement Term Loan B [Member] | ||||||
Borrowings [Line Items] | ||||||
Long-TermSeniorDebtGross | $ 1,056,625 | $ 1,059,300 | ||||
Variable Interest Rate (as percent) | 1.86% | 1.90% | ||||
Secured Debt [Member] | Fourth Amendment Agreement Term Loan B [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Borrowings [Line Items] | ||||||
Applicable interest rate margin (as percent) | 1.75% | 1.75% | ||||
Unsecured Debt [Member] | Senior Notes Due 2025 [Member] | ||||||
Borrowings [Line Items] | ||||||
Long-TermSeniorDebtGross | $ 0 | $ 900,000 | ||||
Fixed Interest Rate (as percent) | 0.00% | 5.75% | 5.75% | 5.75% | ||
Unsecured Debt [Member] | Senior Notes Due 2027 [Member] | ||||||
Borrowings [Line Items] | ||||||
Long-TermSeniorDebtGross | $ 400,000 | $ 400,000 | ||||
Fixed Interest Rate (as percent) | 4.63% | 4.63% | 4.625% | |||
Unsecured Debt [Member] | Senior Notes Due 2029 | ||||||
Borrowings [Line Items] | ||||||
Long-TermSeniorDebtGross | $ 900,000 | $ 0 | ||||
Fixed Interest Rate (as percent) | 4.00% | 0.00% | 4.00% | |||
Revolving Credit Facility [Member] | ||||||
Borrowings [Line Items] | ||||||
Applicable interest rate margin (as percent) | 0.25% | 0.25% | ||||
Variable Interest Rate (as percent) | 0.00% | 0.00% | ||||
LPL Financial LLC [Member] | ||||||
Borrowings [Line Items] | ||||||
RevolvingCreditFacilityLPLF | $ 0 | $ 0 | ||||
LPL Financial LLC [Member] | Revolving Credit Facility [Member] | ||||||
Borrowings [Line Items] | ||||||
Applicable interest rate margin (as percent) | 1.25% | 1.25% | ||||
Variable Interest Rate (as percent) | 0.00% | 0.00% |
Long-term and Other Borrowing_3
Long-term and Other Borrowings (Credit Agreement Textuals) (Details) - USD ($) $ in Thousands | Mar. 15, 2021 | Mar. 10, 2017 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Nov. 12, 2019 | Sep. 21, 2017 |
Borrowings [Line Items] | |||||||
Gain (Loss) on Extinguishment of Debt | $ (24,400) | $ 0 | |||||
Revolving Credit Facility [Member] | |||||||
Borrowings [Line Items] | |||||||
Line of credit, maximum borrowing capacity | $ 1,000,000 | ||||||
Debt Issuance Costs, Gross | 3,200 | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | 0.25% | |||||
Unsecured Debt [Member] | Senior Notes Due 2029 | |||||||
Borrowings [Line Items] | |||||||
Debt Issuance Costs, Gross | 9,000 | ||||||
Long-term Debt, Gross | $ 900,000 | ||||||
Fixed Interest Rate (as percent) | 4.00% | 4.00% | 0.00% | ||||
Unsecured Debt [Member] | Senior Notes Due 2029 | Debt Instrument, Redemption, Period One | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||||
Unsecured Debt [Member] | Senior Notes Due 2029 | Debt Instrument, Redemption, Period Two | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||||
Unsecured Debt [Member] | Senior Notes Due 2027 [Member] | |||||||
Borrowings [Line Items] | |||||||
Long-term Debt, Gross | $ 400,000 | ||||||
Fixed Interest Rate (as percent) | 4.63% | 4.63% | 4.625% | ||||
Unsecured Debt [Member] | Senior Notes Due 2027 [Member] | Debt Instrument, Redemption, Period One | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||||
Unsecured Debt [Member] | Senior Notes Due 2027 [Member] | Debt Instrument, Redemption, Period Two | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||||
Unsecured Debt [Member] | Senior Notes Due 2025 [Member] | |||||||
Borrowings [Line Items] | |||||||
Long-term Debt, Gross | $ 500,000 | ||||||
Fixed Interest Rate (as percent) | 5.75% | 0.00% | 5.75% | 5.75% | |||
Unsecured Debt [Member] | Additional Senior Unsecured Notes due 2025 [Member] | |||||||
Borrowings [Line Items] | |||||||
Long-term Debt, Gross | $ 400,000 | ||||||
Secured Debt [Member] | Fourth Amendment Agreement Term Loan B [Member] | |||||||
Borrowings [Line Items] | |||||||
Amortization payment (as percent) | 0.25% | ||||||
Secured Debt [Member] | Fourth Amendment Agreement Term Loan B [Member] | Eurodollar Rate [Member] | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||||
Secured Debt [Member] | Fourth Amendment Agreement Term Loan B [Member] | Base Rate [Member] | |||||||
Borrowings [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% |
Long-term and Other Borrowing_4
Long-term and Other Borrowings - Revolving Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 15, 2021 | Jul. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | 0.25% | ||
Line of credit, maximum borrowing capacity | $ 1,000 | |||
LPL Financial LLC [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | 1.25% | ||
Line of credit, maximum borrowing capacity | $ 300 | |||
Minimum [Member] | Eurodollar Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||
Minimum [Member] | Base Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||
Minimum [Member] | LPL Financial LLC [Member] | Eurodollar Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.375% | |||
Minimum [Member] | LPL Financial LLC [Member] | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.125% | |||
Maximum [Member] | Eurodollar Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||
Maximum [Member] | Base Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% |
Long-term and Other Borrowing_5
Long-term and Other Borrowings - Line of Credit (Bank Loans Payable Textuals) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Line of Credit Facility [Line Items] | |
Total number of uncommitted lines of credit | 6 |
Number of uncommitted lines of credit with an unspecified limit | 2 |
Line of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit, maximum borrowing capacity | $ 275 |
Leases Narrative (Details)
Leases Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Minimum [Member] | |
Lease Description [Line Items] | |
Remaining lease terms (in years) | 1 year |
Maximum [Member] | |
Lease Description [Line Items] | |
Remaining lease terms (in years) | 16 years |
Options to extend leases (in years) | 20 years |
Fixed Assets | |
Lease Description [Line Items] | |
Finance lease assets | $ 101 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lease Cost | ||
Operating lease cost | $ 4,823 | $ 4,417 |
Amortization of right-of-use assets | 1,286 | 1,285 |
Interest on lease liabilities | 2,104 | 2,103 |
Total finance lease cost | $ 3,390 | $ 3,388 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating Lease, Payments | $ 5,406 | $ 5,000 |
Finance Lease, Interest Payment on Liability | 2,104 | 2,103 |
Finance Lease, Principal Payments | $ 1,031 | $ 997 |
Leases - Supplemental Weighted-
Leases - Supplemental Weighted-Average Information Related to Leases (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Weighted Average Remaining Lease Term [Abstract] | ||
Finance Lease, Weighted Average Remaining Lease Term | 25 years 2 months 12 days | 25 years 3 months 18 days |
Operating Lease, Weighted Average Remaining Lease Term | 7 years 8 months 12 days | 7 years 10 months 24 days |
Weighted Average Discount Rate [Abstract] | ||
Finance Lease, Weighted Average Discount Rate, Percent | 7.83% | 7.82% |
Operating Lease, Weighted Average Discount Rate, Percent | 7.08% | 7.07% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Remainder of Fiscal Year | $ 16,617 | |
Due Year One | 22,577 | |
Due Year Two | 22,222 | |
Due Year Three | 22,024 | |
Due Year Four | 21,724 | |
Due after Year Four | 75,333 | |
Total lease payments | 180,497 | |
Less imputed interest | 44,078 | |
Operating lease liabilities | 136,419 | $ 139,377 |
Finance Leases | ||
Remainder of Fiscal Year | 6,659 | |
Due Year One | 8,802 | |
Due Year Two | 8,577 | |
Due Year Three | 8,727 | |
Due Year Four | 8,879 | |
Due after Year Four | 224,760 | |
Total lease payments | 266,404 | |
Less imputed interest | 160,011 | |
Finance lease liabilities | $ 106,393 | $ 107,424 |
Commitments and Contingencies (
Commitments and Contingencies (Legal) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Self Insurance Reserve | $ 57.2 | $ 51.5 |
Commitments and Contingencies_2
Commitments and Contingencies (Other Commitments) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Brokers and Dealers [Abstract] | ||
Collateral securities | $ 387.8 | |
Collateral security (Fair value) | 542.9 | |
Amount pledged with client-owned securities | 67.1 | |
Remaining collateral securities that can be re-pledged, loaned, or sold | 475.8 | |
Options Clearing Corporation [Member] | ||
Security Owned and Pledged as Collateral, Fair Value [Abstract] | ||
Trading securities pledged to clearing organizations | 4.5 | |
National Securities Clearing Corporation [Member] | ||
Security Owned and Pledged as Collateral, Fair Value [Abstract] | ||
Trading securities pledged to clearing organizations | $ 15 | $ 15 |
Stockholders' Equity (Dividends
Stockholders' Equity (Dividends Paid) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.25 | $ 0.25 |
Dividends, Common Stock [Abstract] | ||
Cash dividends on common stock | $ 19,980 | $ 19,713 |
Stockholdes' Equity (Share Repu
Stockholdes' Equity (Share Repurchases) (Details) $ in Millions | Mar. 31, 2021USD ($) |
Stockholders' Equity Note [Abstract] | |
Amount Remaining | $ 349.8 |
Share-Based Compensation (Texua
Share-Based Compensation (Texuals) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based compensation: | ||
Authorized shares | 20,055,945 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,072,500 | |
Employees, officers and directors [Member] | Restricted Stock [Member] | ||
Share-based compensation: | ||
Share-based compensation expense | $ 10.2 | $ 6.7 |
Share-based compensation cost unrecognized | $ 79.2 | |
Non-vested compensation cost weighted-average period | 2 years 5 months 26 days | |
Employees, officers and directors [Member] | Stock options and warrants [Member] | ||
Share-based compensation: | ||
Share-based compensation expense | $ 0.8 | 1.4 |
Share-based compensation cost unrecognized | $ 1.9 | |
Non-vested compensation cost weighted-average period | 10 months 28 days | |
Advisors and Financial Institutions [Member] | Restricted stock units (RSUs) [Member] | ||
Share-based compensation: | ||
Share-based compensation expense | $ 0.6 | $ 0.7 |
Share-based compensation cost unrecognized | $ 4 | |
Non-vested compensation cost weighted-average period | 2 years 7 days |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option and Warrant Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Shares Outstanding, Ending Balance | shares | 1,726,594 |
Stock options and warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Shares Outstanding, Beginning Balance | shares | 2,000,383 |
Number of Shares, Granted | shares | 0 |
Number of Shares, Exercised | shares | (255,239) |
Number of Shares, Forfeited | shares | (18,550) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighed-Average Exercise Price, Beginning Balance | $ / shares | $ 45.57 |
Weighted-Average Exercise Price, Granted | $ / shares | 0 |
Weighted-Average Exercise Price, Exercised | $ / shares | 48.32 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 50.19 |
Weighed-Average Exercise Price, Ending Balance | $ / shares | $ 45.12 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Number of Shares Exercisable, Ending Balance | shares | 1,611,787 |
Weighted-Average Exercise Price, Exercisable | $ / shares | $ 42.82 |
Weighted-Average Remaining Contractual Term, Options Exercisable | 4 years 11 months 23 days |
Aggregate Intrinsic Value, Exercisable, Ending Balance | $ | $ 160,123 |
Weighted-Average Remaining Contractual Term, Options Outstanding | 5 years 2 months 4 days |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ | $ 167,553 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |
Number of Shares Exercisable and expect to vest | shares | 1,721,067 |
Weighed-Average Exercise Price, Excercisable and expect to vest | $ / shares | $ 45.01 |
Weighted-Average Remaining Contractual Term, Exercisable and expected to vest | 5 years 1 month 28 days |
Aggregate Intrinsic Value, Exercisable and expected to vest, Ending Balance | $ | $ 167,196 |
Share-Based Compensation - Outs
Share-Based Compensation - Outstanding Stock Options and Warrant Information (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 1,726,594 |
Number of shares, Exercisable | shares | 1,611,787 |
Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Weighted-average remaining life (years), Outstanding | 5 years 2 months 4 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 45.12 |
Weighted-average exercise price, Exercisable | $ / shares | $ 42.82 |
$19.85 - $25.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 379,343 |
Weighted-average remaining life (years), Outstanding | 4 years 10 months 13 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 19.85 |
Number of shares, Exercisable | shares | 379,343 |
Weighted-average exercise price, Exercisable | $ / shares | $ 19.85 |
$25.01 - $35.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 269,458 |
Weighted-average remaining life (years), Outstanding | 1 year 4 months 17 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 29.82 |
Number of shares, Exercisable | shares | 269,458 |
Weighted-average exercise price, Exercisable | $ / shares | $ 29.82 |
$35.01 - $45.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 335,412 |
Weighted-average remaining life (years), Outstanding | 5 years 9 months 25 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 39.64 |
Number of shares, Exercisable | shares | 335,412 |
Weighted-average exercise price, Exercisable | $ / shares | $ 39.64 |
$45.01 - $65.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 190,378 |
Weighted-average remaining life (years), Outstanding | 3 years 7 months 13 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 48.40 |
Number of shares, Exercisable | shares | 190,378 |
Weighted-average exercise price, Exercisable | $ / shares | $ 48.40 |
$65.01 - $75.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 247,823 |
Weighted-average remaining life (years), Outstanding | 6 years 10 months 13 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 65.53 |
Number of shares, Exercisable | shares | 246,312 |
Weighted-average exercise price, Exercisable | $ / shares | $ 65.50 |
$75.01 - $80.00 | Stock options and warrants [Member] | |
Summary information about outstanding stock options and warrants | |
Total number of shares, Outstanding | shares | 304,180 |
Weighted-average remaining life (years), Outstanding | 7 years 9 months 21 days |
Weighted-average exercise price, Outstanding | $ / shares | $ 77.53 |
Number of shares, Exercisable | shares | 190,884 |
Weighted-average exercise price, Exercisable | $ / shares | $ 77.53 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Activity (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Stock units vested and undistributed | 53,133 |
Restricted stock awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of Shares, Beginning Balance | 5,560 |
Number of Shares, Granted | 0 |
Number of Shares, Vested | 0 |
Number of Shares, Forfeited | 0 |
Number of Shares, Ending Balance | 5,560 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted-Average Grant-Date Fair Value, Beginning Balance | $ / shares | $ 64.74 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Forfeited | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Ending Balance | $ / shares | $ 64.74 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 5,560 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ / shares | $ 64.74 |
Restricted stock units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of Shares, Beginning Balance | 904,445 |
Number of Shares, Granted | 436,872 |
Number of Shares, Vested | (295,871) |
Number of Shares, Forfeited | (11,760) |
Number of Shares, Ending Balance | 1,033,686 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted-Average Grant-Date Fair Value, Beginning Balance | $ / shares | $ 77.94 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 143.53 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 81.25 |
Weighted-Average Grant-Date Fair Value, Forfeited | $ / shares | 83.38 |
Weighted-Average Grant-Date Fair Value, Ending Balance | $ / shares | $ 104.65 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 918,587 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ / shares | $ 107.62 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income | $ 129,620 | $ 155,641 |
Basic weighted-average number of shares outstanding | 79,697 | 79,507 |
Dilutive common share equivalents | 1,925 | 1,659 |
Diluted weighted-average number of shares outstanding | 81,622 | 81,166 |
Basic earnings per share | $ 1.63 | $ 1.96 |
Diluted earnings per share | $ 1.59 | $ 1.92 |
Earnings per Share (Textuals) (
Earnings per Share (Textuals) (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of Earnings per Share amount | 88,853 | 390,014 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21.00% | |
Effective income tax rate | 21.50% | 25.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Shareholder Percent Ownership in Company | 10.00% | |
Revenue from related party transactions | $ 1,400 | $ 1,100 |
Related party transactions expenses | $ 400 | $ 500 |
Net Capital and Regulatory Re_2
Net Capital and Regulatory Requirements (Details) $ in Millions | Mar. 31, 2021USD ($) |
Net capital and net capital requirements for the Company's broker-dealer subsidiaries | |
Broker-Dealer, Net Capital | $ 98.9 |
Broker-Dealer, Minimum Net Capital Required, Broker-Dealer Subsidiary, Aggregate Indebtedness Standard | $ 11.5 |
Subsequent Events - Business Ac
Subsequent Events - Business Acquisitions (Details) $ in Millions | Apr. 30, 2021USD ($) |
Waddell & Reed Financial, Inc. | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Payments to Acquire Businesses, Net of Cash Acquired | $ 300 |