LPL Financial’s 32,597 advisors produced $748.5 million in annuity commissions in the third quarter. It was the first full quarter since the wealth manager named an outside brokerage general agency (BGA) as its preferred insurance partner, although LPL’s earnings release did not refer to the arrangement.
Annuity commissions rose 5% year over year and 3% from the second quarter’s $727.7 million, making up the largest share of LPL’s $1.25 billion in commission revenue.
Sales-based annuity commissions climbed 7% from a year earlier to $469.4 million, up from $444.8 million in Q2, and trailing annuity commissions grew 1% to $279.1 million.
Simplicity Group, based in Summit, New Jersey, became LPL’s preferred BGA on May 1, giving advisors access to its technology, insurance resources and service for clients seeking protection solutions.
Under the same agreement, LPL is transitioning its in-house LPL Insurance Associates business to Simplicity.
Other insurance distributors that work with advisors have also reorganized this year. In April, Specialty Program Group folded AgencyONE, Brokers’ Service Marketing Group and Business Underwriters Associates into SPG Life & Annuity, a single national platform with about $1 billion in annuity premium.
Read more: SPG consolidates life and annuity brands under unified platform
Independent broker-dealers such as LPL are a major outlet for market-linked annuities. LIMRA reported that the channel accounted for more than half of registered annuity sales, which include traditional variable annuities and registered index-linked annuities, in the third quarter of 2025.
Insurers expect the channel to keep growing. In a Goldman Sachs Asset Management survey of 103 people at 28 US carriers, 47% named independent broker-dealers as the channel likely to grow most over the next three years, up from 38% a year earlier.
Goldman said the rise could be down to more flexible advisor economics, wider access to AI and technology tools, and advisors’ demand for fiduciary independence.
Advisory assets rose 16% to $1.6 trillion and now account for 60.9% of LPL’s $2.6 trillion in client assets, up from 58.2% a year ago. Total client assets grew 11%.
Brokerage accounts posted net outflows of $4.0 billion and advisory accounts took in $33.1 billion. Both figures count $7.4 billion of net brokerage-to-advisory conversions, and sales-based mutual fund commissions fell 11%.
LIMRA has said fee-based annuities, supported by improved technology platforms, have doubled in sales since 2020 and are drawing more interest from registered investment advisors.
In March, two Texas federal courts vacated the Labor Department’s 2024 Retirement Security Rule, and the department restored the 1975 five-part test for fiduciary status. Regulation Best Interest still applies, along with best-interest standards for annuity sales that all 50 states have adopted.
Carrier consolidation is also under way. Corebridge Financial and Equitable Holdings agreed to an all-stock merger valued at about $22 billion, which is expected to close by the end of 2026, and the combined company will operate under the Equitable name.
Read more: Corebridge, Equitable agree $22 billion merger
LPL Financial reported net income of $357 million, or $4.52 per diluted share, down from $379 million, or $4.74, in Q2. A year earlier it lost $30 million, or $0.37 per share, in a quarter carrying $538.2 million in acquisition costs, including $419 million at the closing of the Commonwealth Financial Network deal.
Acquisition costs fell to $83.1 million. Revenue grew 17% to $5.34 billion from $4.55 billion, gross profit rose 12% to $1.66 billion, and core general and administrative (G&A) expenses increased 11% to $532 million.
Adjusted earnings per share rose 15% to $5.97, and adjusted pre-tax income grew 13% to $641 million. The advisor payout rate was 87.98%.
Organic net new assets were $29 billion, equal to 5% annualized growth, though the independent RIA platform had $1.4 billion in net outflows. Recruited assets fell 26% to $24 billion, or $81 billion over 12 months, and net new advisors totaled 122, compared with 331 in Q2.
Client cash held at $57 billion, $1 billion higher than a year earlier, or 2.2% of client assets compared with 2.4%. LPL expects to complete the Commonwealth conversion in Q4, with asset retention of about 83% and run-rate EBITDA of $415 million.
The company spent about $20 million on three Liquidity & Succession deals and narrowed its 2026 core G&A outlook, which includes Commonwealth expenses, to $2,140 million–$2,160 million. It has also incurred costs to integrate its strategic relationship with Prudential Advisors and began rolling out Cyan, a proprietary AI agent, to advisors.
LPL repurchased $301 million of shares, paid $24 million in dividends and ended the quarter with $563 million in corporate cash and a 1.93x leverage ratio. A $0.30 dividend is payable November 30 to stockholders of record as of November 12.
The firm supports the wealth management practices of about 1,100 financial institutions and services roughly $2.6 trillion in assets for about 8 million Americans.
