LPL Financial Holdings (LPLA) risk factors, FY2025 10-K

LPL Financial Holdings's FY2025 10-K, filed Feb 23, 2026, lists 35 risk factors in 4 groups. Against the prior year's 35: 3 new, 3 dropped, 11 substantially reworded.

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Risk factors listed
354 groups
New this year
3vs 35 last year
Dropped
3since the prior 10-K
Substantially reworded
11of those kept
Section length
14k wordsItem 1A

What the changes say

  • LPL added risks regarding the Commonwealth acquisition integration, cash sweep revenue vulnerabilities, and self-insurance limits.
  • Share repurchases were paused in early 2025 due to the Commonwealth transaction.
  • Cybersecurity disclosures expanded to include offshore data storage risks and new DOJ data security rules.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business and Industry

    earn on cash sweep balances, or changes in client cash or money market accounts that we offer could result in declines in our revenue

    Declines in client cash balances, money market accounts, or interest rate cuts by the Federal Reserve could reduce revenue from client cash programs.

  • NewRisks Related to Our Regulatory Environment

    Another subsidiary, LPL Enterprise, is an introducing broker-dealer to LPL Financial. LPL Enterprise was created as part of our new business model that supports insurance companies and asset managers’ ability to provide financial services and expand their respective service capabilities

    The 2025 acquisition of Commonwealth adds broker-dealer CES, which will be integrated, converting assets and transferring representative licenses to LPL Financial by the fourth quarter of 2026 while winding down Commonwealth's operations.

  • NewRisks Related to Our Regulatory Environment

    attract or retain financial advisors and institutions. Depending on the nature of the violation, we may be required to offer restitution or remediation to customers, and the costs of doing so could exceed our loss reserves

    A captive insurance subsidiary underwrites certain legal and regulatory risks, but self-insurance coverage may be insufficient to protect against all customer restitution and remediation costs.

Dropped

  • DroppedRisks Related to Our Business and Industry

    regulatory compliance obligations, particularly in light of our limited on-site supervision and the complexity of certain advisor business models

  • DroppedRisks Related to Our Regulatory Environment

    products and services we offer to clients and the compensation that we and our advisors receive in connection with such products and services

  • DroppedRisks Related to Ownership of Our Common Stock

    the success of our business activities, capital requirements, alternative uses of capital, general economic, financial and business conditions, and the future prospects of our business

Reworded

  • 85% rewrittenRisks Related to Our Regulatory Environment

    Any failure to comply with applicable federal or state laws or regulations, or SRO rules, exposes us to litigation and regulatory actions, which could increase our costs or negatively affect our reputation

    Minor edits to regulatory listing formatting and readability.

  • 85% rewrittenRisks Related to Our Business and Industry

    There are risks inherent in the independent broker-dealer business model

    Moved and integrated text regarding supervisory and compliance challenges, limited on-site supervision, and advisor misconduct.

  • 72% rewrittenRisks Related to Our Regulatory Environment

    Regulatory developments could adversely affect our business by increasing our costs or making our business less profitable

    Minor stylistic and phrasing adjustments regarding regulatory developments and profitability.

  • 68% rewrittenRisks Related to Ownership of Our Common Stock

    Our future ability to pay regular dividends to holders of our common stock or repurchase shares are subject to the discretion of our Board and will be limited by our ability to generate sufficient earnings and cash flows

    Added that share repurchases were paused in early 2025 as a result of the Commonwealth acquisition.

  • 54% rewrittenRisks Related to Our Business and Industry

    Our revenue is exposed to interest rate risk primarily from changes in fees payable to us from banks participating in our client cash programs and changes in interest income earned on deposits in third-party bank accounts and short-term U.S. treasury bills, which are generally based on prevailing interest rates

    Updated to reflect Federal Reserve rate cuts in 2024 and 2025 and added that client cash programs generate a significant portion of revenue.

  • 33% rewrittenRisks Related to Our Business and Industry

    Our business could be materially adversely affected as a result of the risks associated with acquisitions, investments and strategic relationships

    Expanded acquisition and retention risks to explicitly include institutions joining LPL through strategic relationships.

  • 28% rewrittenRisks Related to Our Technology

    A cyber-attack or other security breach of our technology systems or those of our advisors or third-party vendors could negatively impact our normal operations, and as a result, subject us to significant liability and harm our reputation

    Added risks associated with an offshore subsidiary storing and processing data offshore, which has reduced visibility and varying cybersecurity standards.

  • 26% rewrittenRisks Related to Our Technology

    Failure to comply with the complex privacy and data protection laws and regulations to which we are subject could result in adverse action from regulators and adversely affect our business, reputation, results of operations and financial condition

    Added references to NYSDFS Part 500 and the DOJ's Data Security program restricting access by certain countries of concern to sensitive data.

  • 23% rewrittenRisks Related to Our Business and Industry

    Restrictions under our Credit Agreement may prevent us from taking actions that we believe would be in the best interest of our business

  • 21% rewrittenRisks Related to Our Business and Industry

    We depend on our ability to attract and retain experienced and productive advisors, and we are subject to competition in all aspects of our business

  • 21% rewrittenRisks Related to Our Technology

    We rely on technology in our business, and technology and execution failures could subject us to losses, litigation and regulatory actions

All 35 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Industry

  1. 01We depend on our ability to attract and retain experienced and productive advisors, and we are subject to competition in all aspects of our business21% rewritten
  2. 02Significant downturns and volatility in equity and other financial markets have had and could continue to have an adverse effect on our financial condition and results of operations
  3. 03Our revenue is exposed to interest rate risk primarily from changes in fees payable to us from banks participating in our client cash programs and changes in interest income earned on deposits in third-party bank accounts and short-term U.S. treasury bills, which are generally based on prevailing interest rates54% rewritten
  4. 04earn on cash sweep balances, or changes in client cash or money market accounts that we offer could result in declines in our revenueNew
  5. 05Any damage to our reputation could harm our business and lead to a loss of revenue and net income
  6. 06Our business is subject to risks related to litigation, arbitration claims and regulatory actions
  7. 07There are risks inherent in the independent broker-dealer business model85% rewritten
  8. 08We rely on third-party service providers, including off-shore providers, to perform technology, processing and support functions, and our operations are dependent on financial intermediaries that we do not control
  9. 09Lack of liquidity or access to capital could impair our business and financial condition
  10. 10Our business could be materially adversely affected as a result of the risks associated with acquisitions, investments and strategic relationships33% rewritten
  11. 11Our risk management policies and procedures may not be effective in fully mitigating our risk exposure in all environments or against all types of risks
  12. 12We face competition in attracting and retaining key talent
  13. 13The securities settlement process exposes us to risks related to adverse movements in price
  14. 14Our indebtedness could adversely affect our financial condition and may limit our ability to use debt to fund future capital needs
  15. 15Restrictions under our Credit Agreement may prevent us from taking actions that we believe would be in the best interest of our business23% rewritten
  16. 16Provisions of our Credit Agreement and certain of the Indentures could discourage an acquisition of us by a third-party
  17. 17Our insurance coverage may be expensive, and losses we incur may exceed the limits of our insurance coverage, or may not be covered at all
  18. 18Poor service or performance of the financial products that we offer or competitive pressures on pricing of such services or products may cause clients of our advisors to withdraw their assets on short notice
  19. 19A loss of our marketing relationships with manufacturers of financial products could harm our relationship with our advisors and, in turn, their clients
  20. 20Changes in U.S. federal income tax law could make some of the products distributed by our advisors less attractive to clients

Risks Related to Our Regulatory Environment

  1. 21Any failure to comply with applicable federal or state laws or regulations, or SRO rules, exposes us to litigation and regulatory actions, which could increase our costs or negatively affect our reputation85% rewritten
  2. 22Another subsidiary, LPL Enterprise, is an introducing broker-dealer to LPL Financial. LPL Enterprise was created as part of our new business model that supports insurance companies and asset managers’ ability to provide financial services and expand their respective service capabilitiesNew
  3. 23attract or retain financial advisors and institutions. Depending on the nature of the violation, we may be required to offer restitution or remediation to customers, and the costs of doing so could exceed our loss reservesNew
  4. 24Regulatory developments could adversely affect our business by increasing our costs or making our business less profitable72% rewritten
  5. 25We are subject to various regulatory requirements, which, if not complied with, could result in the restriction of the conduct or growth of our business
  6. 26Failure to comply with ERISA regulations and certain tax-qualified plan laws and regulations could result in penalties against us

Risks Related to Our Technology

  1. 27We rely on technology in our business, and technology and execution failures could subject us to losses, litigation and regulatory actions21% rewritten
  2. 28Our information technology systems may be vulnerable to security risks
  3. 29A cyber-attack or other security breach of our technology systems or those of our advisors or third-party vendors could negatively impact our normal operations, and as a result, subject us to significant liability and harm our reputation28% rewritten
  4. 30Failure to comply with the complex privacy and data protection laws and regulations to which we are subject could result in adverse action from regulators and adversely affect our business, reputation, results of operations and financial condition26% rewritten
  5. 31Failure to maintain technological capabilities, flaws in existing technology, difficulties in upgrading our technology platform or the introduction of a competitive platform could have a material adverse effect on our business
  6. 32Inadequacy or disruption of our business continuity and disaster recovery plans and procedures in the event of a catastrophe could adversely affect our business

Risks Related to Ownership of Our Common Stock

  1. 33The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for our investors
  2. 34We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our debt service and other obligations
  3. 35Our future ability to pay regular dividends to holders of our common stock or repurchase shares are subject to the discretion of our Board and will be limited by our ability to generate sufficient earnings and cash flows68% rewritten

Other LPL Financial Holdings 10-Ks

  • FY2024 10-K risk factors
    35 risks

    Dependence on attracting and retaining independent financial advisors and their client assets drives overall growth and revenue.

    Filed Feb 20, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.