LPL Financial Q3 2021 Key Metrics Presentation

LPL FINANCIAL HOLDINGS, INC. Q3 2021 EARNINGS KEY METRICS

October 28, 2021

LPL Financial Member FINRA/SIPC

1

Notice to Investors: Safe Harbor Statement

Statements in this presentation regarding LPL Financial Holdings Inc.'s (together with its subsidiaries, the "Company") future financial and operating results, growth, priorities, business strategies and outlook, including forecasts and statements relating to the Company's future advisory and brokerage asset levels and mix, organic asset growth, deposit betas, Core G&A* expenses (including outlook for 2021), Gross Profit* benefits, EBITDA* benefits, payout ratio, client cash balances and yields, transaction and fee revenue, investments, capital returns, planned share repurchases and the expected benefits and costs of the acquisition of Waddell & Reed's wealth management business (the "Waddell & Reed Acquisition"), as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the Company's historical performance and its plans, estimates and expectations as of October 28, 2021. Forward-looking statements are not guarantees that the future results, plans, intentions or expectations expressed or implied by the Company will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause actual financial or operating results, levels of activity or the timing of events to be materially different from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: the spread of COVID-19 and its direct and indirect effects on global economic and financial conditions; changes in interest rates and fees payable by banks participating in the Company's client cash programs; the Company's strategy and success in managing client cash program fees; changes in general economic and financial market conditions, including retail investor sentiment; fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenue; the effects of competition in the financial services industry; the success of the Company in attracting and retaining financial advisors and institutions, and their ability to market effectively financial products and services; whether retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company; changes in the growth and profitability of the Company's fee-based offerings; the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations and the implementation of Regulation BI (Best Interest); the costs of settling and remediating issues related to regulatory matters or legal proceedings, including actual costs of reimbursing customers for losses in excess of the Company's reserves; changes made to the Company's services and pricing, and the effect that such changes may have on the Company's Gross Profit* streams and costs; execution of the Company's plans and its success in realizing the synergies, expense savings, service improvements and/or efficiencies expected to result from its investments, initiatives, acquisitions and programs; the successful onboarding of advisors and client assets in connection with the Waddell & Reed Acquisition; and the other factors set forth in Part I, "Item 1A. Risk Factors" in the Company's 2020 Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or other filings with the SEC. Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after October 28, 2021, even if its estimates change, and statements contained herein are not to be relied upon as representing the Company's views as of any date subsequent to October 28, 2021.

LPL Financial Member FINRA/SIPC

2

Notice to Investors: Non-GAAP Financial Measures

Management believes that presenting certain non-GAAP financial measures by excluding or including certain items can be helpful to investors and analysts who may wish to use some or all of this information to analyze the Company's current performance, prospects and valuation. Management uses this non-GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP financial measures and metrics discussed herein are appropriate for evaluating the performance of the Company. Specific Non-GAAPfinancial measures have been marked with an asterisk (*) within this presentation. Reconciliations and calculations of such measures can be found in the appendix of this presentation.

EPS prior to amortization of intangible assets and acquisition costs is defined as adjusted net income, a non-GAAP measure defined as net income plus the after-tax impact of amortization of intangible assets and acquisition costs, divided by the weighted average number of diluted shares outstanding for the applicable period. The Company presents adjusted net income and EPS prior to amortization of intangible assets and acquisition costs because management believes the metrics can provide investors with useful insight into the Company's core operating performance by excluding non-cash items and acquisition costs that management does not believe impact the Company's ongoing operations. Adjusted net income and EPS prior to amortization of intangible assets and acquisition costs are not measures of the Company's financial performance under GAAP and should not be considered as an alternative to net income, earnings per diluted share or any other performance measure derived in accordance with GAAP. For a reconciliation of net income and earnings per diluted share to adjusted net income and EPS prior to amortization of intangible assets and acquisition costs, please see the appendix of this presentation.

Gross profit is calculated as total revenues less advisory and commission expenses and brokerage, clearing and exchange fees ("BC&E"). All other expense categories, including depreciation and amortization of fixed assets and amortization of intangible assets, are considered general and administrative in nature. Because the Company's gross profit amounts do not include any depreciation and amortization expense, the Company considers its gross profit amounts to be non-GAAP measures that may not be comparable to those of others in its industry. Management believes that gross profit amounts can provide investors with useful insight into the Company's core operating performance before indirect costs that are general and administrative in nature. For a calculation of gross profit, please see the appendix of this presentation.

Core G&A consists of total operating expenses less the following expenses: advisory and commission, regulatory charges, promotional, employee share-based compensation, depreciation and amortization, amortization of intangible assets, BC&E, and acquisition costs. Management presents Core G&A because it believes Core G&A reflects the corporate operating expense categories over which management can generally exercise a measure of control, compared with expense items over which management either cannot exercise control, such as advisory and commission expenses, or which management views as promotional expense necessary to support advisor growth and retention, including conferences and transition assistance. Core G&A is not a measure of the Company's total operating expenses as calculated in accordance with GAAP. For a reconciliation of Core G&A to the Company's total operating expenses, please see the appendix of this presentation. The Company does not provide an outlook for its total operating expenses because it contains expense components, such as advisory and commission expenses, that are market-driven and over which the Company cannot exercise control. Accordingly, a reconciliation of the Company's outlook for Core G&A to an outlook for total operating expenses cannot be made available without unreasonable effort.

EBITDA is defined as net income plus interest and other expense, income tax expense, depreciation and amortization, and amortization of intangible assets. During the third quarter of 2021, the Company changed its definition of EBITDA to include the loss on extinguishment of debt and has updated prior period disclosures to reflect this change as applicable. The Company presents EBITDA because management believes that it can be a useful financial metric in understanding the Company's earnings from operations. EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of profitability or liquidity. For a reconciliation of net income to EBITDA, please see the appendix of this presentation.

LPL Financial Member FINRA/SIPC

3

We continue to drive long-term business growth...

Total Advisory and Brokerage Assets ($ billions)

 Total Advisory and Brokerage Assets	Advisory Assets % of Total Assets
							$1,112	$1,133	$1,043	$1,062	YOY	SEQ
					$903	$958			Change Change
	$764		$762	$810					40%	2%
$719	$670		51.8% 51.9%	52.4%	52.1% 52.6%	2.3 pts	0.5 pts
				51.1%
			49.3% 50.1%
	47.8% 48.1%
47.0%
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q2	Q3
2019		2020			2021		Prior to
									Waddell

Total Net New Assets(1) ($ billions)
 Organic Total NNA	Acquired Total NNA		Organic Annualized Growth Rate
							$106.0
							15.5%
						12.8%	$68.9
							10.2%
					8.8%
		7.5%	7.8%				$29.0
	6.9%			$28.9
		5.8%
5.1%				$21.8		$2.3
$12.5	$14.3	$13.0
$11.9	$11.1	$4.0		$37.1	$26.7
$2.9				$17.8
$9.0					~14% organic growth over past 4 quarters
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
2019		2020			2021
	Organic Growth Rate (ex Large Financial Institutions):	7.6%	7.7%	8.5%
	Organic NNA (ex Large Financial Institutions):	$17.1	$18.4	$22.2

Recruited Assets(2) ($ billions)

AUM Retention Rate(3) (Quarterly Annualized)

									34.8
								23.8
8.7	10.6	8.4	11.1	10.7	10.8			13.2
				~$83B of Recruited AUM over past 4 quarters
	Q3		Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
		2019		2020			2021
			Recruited Assets (ex Large Financial Institutions):	8.6	12.9

97.3	97.3	98.4	98.7	97.3	97.6	98.1	98.4	97.8

~98% average retention over past 4 quarters

Q3		Q4	Q1	Q2		Q3	Q4	Q1	Q2	Q3
	2019			2020			2021

• Waddell & Reed assets and net new assets were not included in organic net new assets or in the calculation of organic net new asset annualized growth rates as we completed Waddell & Reed onboarding during Q3. Starting in Q4, we will include Waddell & Reed assets and net new assets in total net new assets and in the calculation of net new asset annualized growth rates.

LPL Financial Member FINRA/SIPC

4

...And solid financial results

Gross Profit* ($ millions)
											YOY
											Change
543	538	576	488	506	534	579	602	631	575	586	25%
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q2	Q3
2019		2020			2021		Prior to
									Waddell
EBITDA* as a % of Gross Profit*

46.1	44.4	48.7	42.4	40.5	40.6	41.9	40.5		45.0	42.5	YOY
			35.6		Change
									-4.9 pts
											2.0 pts
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q2	Q3
2019		2020			2021		Prior to
Acquisition Costs (impact on EBITDA margin):	0.3	4.0	5.7	Waddell†

EBITDA* ($ millions)
		280							259		YOY
250	239		207	205	217	243	243	225	249	Change
							10%
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q2	Q3	22%
2019		2020			2021		Prior to
			Acquisition Costs:	$2M	$24M	$36M	Waddell†

EPS Prior to Amortization of Intangible Assets and Acquisition Costs*

	$2.06						YOY
			$1.85		$1.78	Change
$1.71	$1.68		$1.77	$1.77	$1.67 23%
	$1.42	$1.44	$1.53

					$6.92 of EPS* over past 4 quarters
Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q2	Q3
2019		2020			2021		Prior to
									Waddell

 "Prior to Waddell" represents results from LPL not including EBITDA or acquisition costs from Waddell & Reed.

LPL Financial Member FINRA/SIPC

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