LPL Financial Holdings Inc. (NASDAQ:LPLA) Q4 2022 Earnings Call Transcript

Matthew Audette: Yes. I think the 1.5 to 2.5 times, I think, is really the leverage ratio that we think makes sense in a range of different economic environments. And I think the ability to maintain a strong balance sheet and have the capacity to invest for growth in a range of different environments, I think, is a key part of our value proposition. I think it’s a key part for our advisers and clients knowing that if the macro moves against us, and we’re not at a leverage ratio, we’re going to have to immediately pull back on investments or immediately pull back on being able to serve and support them and the host of capabilities that we have, recruiting and succession being an example. So I think the 1.5 to 2.5 times, we landed on that with a view that that’s the right leverage ratio in a range of environments.

And I think it certainly a key part of the value prop that differentiates from some of the firms that you mentioned. And I think where we are today, being at the low end or just below the low end of that, with a fair bit of capital deployment coming our way in Q1, including the acquisitions that we closed, as well as being positioned at that point in a macro that’s, I think, anything but certain at this point, I think we like where we’re sitting.

Gerry O’Hara: Great. That’s it for me this evening. Thanks, guys.

Operator: Thank you. This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Dan Arnold for any further remarks.

Dan Arnold: Thanks much, John, and I just want to thank everyone for taking their valuable time out to join us this afternoon, and we look forward to speaking with you again next quarter.

Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.