Commonwealth deal blows $419-million hole in LPL earnings, but shares spike after hours as brokerage shows huge retention success with 80% of assets now en route and 90% still likely to come

LPL Financial Holdings Inc. recorded a $419 million, or $5.21 per share, one-time cost that tanked quarterly earnings,  but Wall Street looked past it and send shares higher in after-hours trading.

The Fort Mill, S.C., broker-dealer ended the third-quarter 2025, Sept. 30, with a $30 million loss. 

Shares rose to $343.02, up $4.53, or 1.34% after hours after falling to 338.49, down $5.13 or 1.49% during the regular session. See: LPL closes Commonwealth deal while shares tumble; and warns that moving FAs from Fidelity's clearing will take two extra quarters, and the deal triggered mass due-diligence on RIA model

Hitting a homer

LPL's $30 million loss looked bad compared to net income of $255 million, or $3.39 per share, in last year's third quarter, but Commonwealth Financial Network, which LPL acquired in March and closed in August, was still a bright spot.

Advisory assets as a percentage of total assets increased to 58.2%, up from 56.0% a year ago.
Total net new assets were $308 billion, including $275 billion of acquired net new assets resulting from the Commonwealth acquisition.

Commonwealth advisors representing nearly 80% of assets have signed with LPL, and the unit's estimated run-rate EBITDA has increased from $415 million to $425 million. 

 The Commonwealth deal is indicative of a larger success in winning advisors, says LPL CEO Rich Steinmeier on today's conference call.

“We are the No. 1 capturer of advisers in movement and in motion in the marketplace,” he said. “That has persisted at historical levels. And in time, over the last 5 years, we have seen that we have continued to grow share capture of advisers in motion, and we would hope to believe that, that would continue in time as well.”

LPL still projects it will get advisors representing 90% of advisors eventually. See: Adam Spiegelman is converting his dad's old Northwestern Mutual practice into a Fidelity RIA -- after growing to $400 million of AUM over seven years at Commonwealth

In his most recent [Sept. 9] report on LPL, Morningstar analyst Sean Dunlop called the firm  one of the "clear long-term winners in the space.

"We have raised our fair value estimate to $504, from $358,” he writes. “The company's base of 32,000 financial advisors after the closure of its Commonwealth Financial Network acquisition leads the industry by nearly 12,000.”

Bearing the pain

LPL's size advantage leaves open the possibility of another Commonwealth-level home run, according to the report from the Chicago research house.

“LPL's scale, integration prowess, and self-clearing capabilities could allow it to emerge as the buyer of choice for even large-scale competitors like Osaic and Cetera,” Dunlop adds.

LPL Financial paid $2.7 billion in cash for Commonwealth, and paid an additional $485 million onboarding and integration costs to many of the 2,900 Commonwealth brokers. See: LPL CEO claims 'prize' 'anti-LPL' Commonwealth for just $2.7 billion, but the price will rise, experts say, to retain its advisors conditioned to know LPL as a place with subpar service, culture

The $485M is totally unrelated to transition assistance.

And much of the pain will be borne right off the bat.

“As a result of purchase accounting, $419 million of the total purchase price is treated as acquisition costs, with no change in the amount of cash deployed,” LPL writes in its release.