Skip to Content
Stock Strategist

LPL IPO Faces Opportunities, Headwinds

Despite LPL's secular growth opportunities, we're skeptical of the asset-management services firm's profitability.

Mentioned: , ,

LPL Investment Holdings, one of the country's largest providers of technology, brokerage, and other services to financial advisors, plans to raise approximately $450 million in an IPO next week. The firm focuses on independent, easy-to-use, and open technology and services to representatives serving the "mass affluent" market, individuals with $100,000 to $1 million in investable assets.

We think the firm faces a secular growth opportunity, given the long-standing trend of individual investors to hold and direct more and more of their retirement savings and related net worth. Further, the elevated volatility and weak returns realized in the US equity market over the last decade as well as the somewhat puzzling and weak current economic environment may provide incremental incentive for independent investors to seek outside counsel for their investing decisions for some time.

Bill Buhr does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.