Matt Audette: Yes. And then just following up on the financial dynamics and reminders, there are about $50 billion of client assets. We would expect to onboard them in the latter part of 2024. And that’s when our estimated run rate EBITDA of $60 million would start, when they’re fully onboarded. Between now and then is really the onboarding and integration costs that estimate overall of $125 million. And if you look at what we’ve done so far in the third quarter in our guide for the fourth quarter, that puts broadly $25 million of that in 2023, meaning the remaining $100 million would come through in 2024. And then once they’re onboarded, again, would be back to that $60 million EBITDA run rate.
Unidentified Analyst: Awesome. Super helpful. Thanks for walking through everything there. Switching topics a bit for the follow-up, this quarter saw an acceleration of service and fee revenues up 11% quarter-over-quarter. Can you just talk through what drove that? And how do you think about revenue opportunities for existing services? And then related to that, you recently expanded access for your outsourced CFO services. What are high-level expectations there for both FA uptake and revenue opportunities? Thanks again.
Matt Audette: Yes, I’ll take the first part of that. And then, Dan, if you want to jump in on the CFO solutions, which I know is your favorite solution, this is mine as well. I think so in service and fees, I’d say there’s just two primary drivers. I think the first is just seasonal factors that come through in the third quarter. We’ve had our larger – our National Advisor Conference in the third quarter, and there is revenues and fees that come along with that for the product sponsors that are there. And then second, the third quarter is a seasonally high quarter for IRA fees. So those two things came through. But then second, I think maybe the – from a longer-term standpoint, is really organic growth of the business. And we’ve got fees associated with that are specific to advisors on our platform.
So as we continue to grow the number of advisors we serve and support, you’ve got a recurring fees and things that come along with that and those show up here as well. So those are the two broad drivers. So I think when you look ahead to Q4, that’s why we expect that the decline of $10 million is really that seasonality coming – the seasonal factor is coming out, but I think the core from a long-term standpoint is the more we drive organic growth, the more we serve and support advisors on our platform, this section or this item will continue to grow. Now, it also includes the fees related to our services portfolio. So maybe I’ll turn it over to Dan to talk about the CFO solutions.
Dan Arnold: Yes. Thanks, Matt. And so look, if you think about our services portfolio, just start with a broader context, and then we’ll put down your specific question. Initially, when we rolled out these solutions or this services portfolio, the initial bundle of services were really more relevant for our larger practices. If you didn’t have a complex practice, let’s use it as an example, our initial rollout of CFO solutions, then that solution may not be relevant to you, or it may be at a price point that makes it out of reach for you. And so learning through that sort of first iteration around of innovation, we realized that a lot of the capabilities within the original CFO solutions were needed for all advisors to figure out how to package those in a different way at a lower price point and still create that leverage point of value for our advisors, then that would be a good problem to solve for and one that would create real value for our advisors.
And so that’s what you saw with this new rollout of what we call CFO Essentials that – again it will reach a much broader set of our 22,000-plus advisors or be much more applicable to them, and we think meet their needs at a price point that makes sense and continue then to drive the utilization and growth of that overall kind of suite of CFO-type solutions. We’re doing that on the marketing side as well. So these are just, I think, places where we continue to innovate on that overall portfolio. For the fine point on that, we now have 13 solutions in our overall services portfolio, of which many of them are relevant across or could be relevant across our entire advisor base. We’ve got three more solutions that we will roll out in the near to intermediate term and another handful in incubation.
So it continues to be a place of innovation for us, and we think there is still a good bit of opportunity to continue to help build leverage points for advisors in the spirit of helping them run thriving businesses. So that’s kind of the context around CFO Essentials.
Operator: Okay. And one moment for our next question will be coming from Devin Ryan of JMP Securities. Your line is open Devin.
Devin Ryan: Great. Hi, Dan. Hi, Matt. I would love to just maybe start on the RIA channel. Really nice momentum, particularly on net new assets there in the quarter and, I guess, particularly in the corporate RIA. So I’d love to just maybe dig a little bit into the drivers this quarter and then just the outlook, and also whether the Schwab-Ameritrade conversion was a factor this quarter or even just going forward as you kind of consolidate some of the large players there just want to think about kind of some of the incremental opportunity for LPL.
Dan Arnold: Yes, Devin, so this is Dan. Let me try to cover those sort of different points that you’re exploring. I think first and foremost, if you look at overall just advisory growth in general, right, you continue to see success and progress we have in both same-store sales and new-store sales across, again, all of our different types of affiliation models. So that would cover your corporate RIA, your hybrid RIA solutions, your pure RIA solutions. And I think we still see about $0.75 of every new dollar invested go into advisory. So that’s where you’re going to pick up the contribution from same-store sales. And you still see conversions or transitions from brokerage to advisory services. Those are your tailwinds that are overall driving that advisory growth.
I think if you pull back then and look at the different affiliation models and how we’re positioned in the marketplace, certainly the diversity of our different models continues to help us attract a diverse set of advisors and advisors that, quite frankly, do more and more advisory when they join LPL. And you’re seeing that in the traditional space as we continue to attract more and more larger advisors with more complex practices. If you look across our different new affiliation models, right, employee strategic wealth and pure RIA, a lot of those will be breakaways from wires that will come with significant advisory books. And if you just click down on those new affiliation models, as we said, this would have represented a record in terms of recruiting $5 billion of assets.
If you look back over the last 12 months, we’ve actually recruited $14 billion in new assets to those affiliation models, which is 50% of what we’ve overall recruited since they’ve been launched. And certainly that mix of business that tends to have more significant percentages of their books and advisory is, again, another driver. And I think as we continue to have success with those models, as we continue to invest in them, they become more and more appealing, there is more and more awareness of them, and thus more demand. We certainly are well positioned to see that advisory business flow. I think specifically relative to maybe your question around Schwab and Ameritrade, it’s probably more the pure RIA business, and we do see that as a continued interesting place, of which to compete and try to win.
