LPL Investment Holdings Inc. expects to save up to $12 million in 2012 by moving brokers from its subsidiary Uvest Financial Services Group Inc. from an outside clearing firm to LPL's proprietary platform.
LPL Investment Holdings Inc. expects to save up to $12 million in 2012 by moving brokers from its subsidiary Uvest Financial Services Group Inc. from an outside clearing firm to LPL's proprietary platform.
The company announced the move Monday afternoon in a statement. About 500 reps and advisers are affiliated with Uvest, a broker-dealer that primarily serves banks and other financial institutions such as credit unions.
“We expect this integration will improve our company's pretax profitability by approximately $10 to $12 million per year, beginning in 2012, through operational efficiencies and revenue opportunities,” said Michael Herley, a spokesman for LPL.
Uvest currently clears its brokers' trades through Pershing LLC, the industry's biggest clearing firm.
One securities analyst likes LPL's move to consolidate operations.
In a note to clients, Citigroup Inc.'s William Katz said that such efficiency moves should increase pretax income by roughly 6 cents a share on an after-tax basis.
Citigroup is maintaining its earnings-per-share forecast for LPL in 2011 at $1.74 a share. But the bank is raising its earnings-per-share expectations for the B-D by 6 cents to $2.20 a share next year.
“We are increasingly warming to the story and see the stock defensive to a further market correction,” Mr. Katz wrote in a note to clients. “However, we look for a better entry, given limited upside to our revised target and potentially aggressive consensus expectations.”
