Organic Growth and G&A Expenses
Q: Will lower G&A growth slow down organic growth?
A: Despite moderating core G&A expenses, LPL Financial expects to sustain high single-digit organic growth. Investments are focused on improving value propositions and driving productivity, keeping growth momentum strong even with reduced expense growth. Core G&A growth is guided down from 15% in 2023 to a range of 6.25% to 3.4% in 2024.

Large Enterprise Channel and Prudential Deal
Q: What's the outlook for large enterprise deals after Prudential?
A: LPL sees significant growth opportunities in the large enterprise channel, building on the $85 billion in assets already added from banks. The Prudential deal has spurred interest from insurance companies, expanding the potential market by an additional $1.5 trillion. LPL is confident in handling more deals without bandwidth issues, enhancing capabilities and efficiency with each onboarding. ** , **

Cash Trends and January Update
Q: Are cash sorting headwinds behind us?
A: Cash balances have stabilized since July, remaining steady through the second half of the year. In January, overall cash balances decreased by $1.2 billion, primarily due to seasonal advisory fees. Excluding this, cash activity saw a slight increase, indicating continued stability.

Demand for Fixed Maturities and Reinvestments
Q: How is demand for fixed maturities holding up?
A: Demand remains strong, with LPL placing $2 billion into new 5-year fixed contracts at a 30 basis point spread above the curve. They anticipate reinvesting the upcoming $6.5 billion in maturities at even higher rates, though acceleration opportunities are limited.

M&A Environment
Q: What M&A opportunities are you seeing now?
A: LPL continues to pursue M&A as a core strategy, focusing on acquiring broker-dealers and RIAs, adding capabilities, and addressing liquidity and succession needs. They are seeing increased opportunities as market conditions become more favorable and remain disciplined in evaluating potential deals.

Adviser Movement and Retention
Q: Can adviser movement increase, and how's retention?
A: Adviser movement remains flat at 5% to 5.5%, below historical norms. LPL aims to accelerate movement by making transitions easier through service innovations. Retention is strong, expected to stay in the 98.5% to 99% range, despite two January departures due to practice acquisitions for succession. ** , , **

Annuities Sales Growth and DOL Impact
Q: How is annuities growth affected by DOL proposals?
A: Annuities sales have increased due to higher interest rates and market volatility. While the DOL rule may create headwinds for brokerage business, LPL expects annuities to remain important for clients needing specific solutions, and they are prepared to adapt to regulatory changes while maintaining choice for advisers and clients.

Core G&A Growth Range Factors
Q: What determines where core G&A growth falls in guidance?
A: The core G&A growth within the guided range depends on the costs associated with supporting business growth, such as variable compensation and expenses related to ramping up operations. Higher growth may push expenses toward the high end of the range.

Promotional Expense Outlook
Q: How will underlying promotional expenses trend?
A: Underlying promotional expenses align with organic growth, conference spending, and onboarding costs for large enterprises. As recruiting and the number of advisers grow, promotional expenses may increase, but large one-time expenses like those for Prudential are not expected to recur in the near term.

Scale Benefits in Enterprise Channel
Q: How does growth in enterprise channel affect scale and leverage?
A: Scaling the enterprise channel enhances operating efficiency and leverage. As LPL brings on large clients like Prudential, they build capabilities that benefit existing and future clients, driving organic growth and achieving cost efficiencies through shared technology and services.