UPDATE 1-Broker-dealer LPL's profit misses estimates as costs touch $1 bln

Wed Apr 23, 2014 6:04pm EDT

* First-quarter adjusted earnings $0.69/share vs est. $0.72

* Operating expenses up 13 pct to almost $1 bln

* Adviser headcount up 3 pct after slow start to hiring (Adds details, analysts' estimate)

April 23 (Reuters) - LPL Financial Holdings Inc, one of the five biggest independent U.S. broker-dealers, reported a lower-than-expected quarterly profit as operating expenses ballooned to almost $1 billion.

The unseasonably cold winter in the country also hurt the company's drive to recruit brokers in the quarter ended March 31. Broker count is a key metric of revenue growth and profit at LPL.

"After a slow start to recruiting to begin the year, our business development team saw improving conditions in March... we are seeing positive momentum in our pipeline heading into the second quarter," Chief Executive Mark Casady said in a statement on Wednesday.

The improvement in March helped LPL's headcount rise to 13,726 advisers from 13,377 a year earlier.

LPL also sells its investment capabilities to financial advisers who are not employees and allows brokers to keep much more of the fees and commissions they collect from clients than conventional firms where brokers are full-time employees.

The company's advisory revenue rose 16 percent to $327.3 million in the quarter, while commission rose 10 percent to $534.6 million.

LPL's net income slipped to $53.1 million from $54.7 million. On a per share basis, earnings were flat at 51 cents.

It earned 69 cents per share on an operating basis, short of analysts' average estimate of 72 cents per share, according to Thomson Reuters I/B/E/S.

The company's operating costs rose 13.2 percent to $987 million, while total costs rose 13 percent to almost $1 billion.

Net revenue rose almost 12 percent to $1.09 billion.

Shares of the company, which have jumped 43 percent in last 12 months, closed at $49.10 on the Nasdaq. (Reporting By Neha Dimri in Bangalore; Editing by Savio D'Souza)