UPDATE 1-LPL Investment posts loss on IPO costs

Mon Feb 7, 2011 5:18pm EST

* IPO-related compensation costs fuel fourth-quarter loss

* "Adjusted earnings" rose 6 percent to $44.7 mln

* Adviser network grew 4.1 pct to 12,444 last year

By Joseph A. Giannone

NEW YORK, Feb 7 (Reuters) - LPL Investment Holdings Inc (LPLA.O), which provides technology and services to more than 12,000 independent brokers, posted a fourth-quarter loss on Monday, fueled by $222 million of costs related to its November initial public offering.

Boston-based LPL had a net loss of $116.6 million, or $1.20 a share, in the fourth quarter compared with net income of $18.6 million, or 19 cents, in the year-earlier period. It was the company's first quarterly results since its November IPO.

LPL shares closed down less than one percent at $33.75 a share in Monday trading on the Nasdaq. The company, which released its results after the closing bell, told investors last week to expect a quarterly loss after costs related to individuals exercising stock and options granted before the IPO.

"Adjusted" net income, which excludes charges and other items, rose 6.2 percent to $44.7 million, or 42 cents a share. Net revenue rose 12 percent to $820 million driven by advisory fees, revenue linked to client assets and commissions.

Analysts on average expected LPL to earn 40 cents a share, according to Thomson Reuters I/B/E/S estimates.

"We achieved strong net new advisor growth during the quarter and continue to see excellent growth in our hybrid (registered investment adviser) platform," LPL Chief Executive Mark Casady said in a statement.

LPL, formerly known as Linsco/Private Ledger, added 494 net new advisors last year, including 206 from National Retirement Partners. As of Dec. 31, LPL's network grew to 12,444 financial advisers, up 4.1 percent from a year earlier.

Total advisory and brokerage assets rose 13 percent to end last year with a record $315.6 billion.

Over the past five years LPL has amassed one of the largest brokerage forces, fueled by the waves of advisers leaving banks, insurers and big Wall Street firms.

The company is majority owned by private-equity investors TPG Capital [TPG.UL] and Hellman & Friedman. (Reporting by Joseph A. Giannone; editing by Andre Grenon)

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