Good day, ladies and gentlemen, and welcome to the LPL Financial Holdings’ First Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator instructions) As a reminder, this conference call is being recorded. I would now like to introduce to today’s conference, Trap Kloman. You may begin.

Thank you, Nicole. Good morning and welcome to the LPL Financial first quarter earnings conference call. On the call today is Mark Casady, our Chairman and Chief Executive Officer, who will provide his perspective on our performance. Following his remarks, Dan Arnold, our Chief Financial Officer, will speak to our financial results and capital deployment. Following the introductory remarks, we’ll open the call for questions. We would appreciate if each analyst would ask no more than two questions each. Please note that we have posted a financial supplement on the Events section of the Investor Relations page on lpl.com. Before turning the call over to Mark, I'd like to note that comments made during this conference call may incorporate certain forward-looking statements. This may include statements concerning such topics as earnings growth targets, operational plans and other opportunities we foresee. Underpinning these forward-looking statements are certain risks and uncertainties. We refer our listeners to the Safe Harbor disclosures contained in the earnings release and our latest SEC filings to appreciate those factors that may cause results to differ from those contemplated in such forward-looking statements. In addition, comments during this call will include certain non-GAAP financial measures governed by SEC Regulation G. For a reconciliation of these measures, please refer to our earnings press release. With that, I’ll turn the call over to Mark Casady.

Thank you, Trap, and thank you everyone for joining today’s call. Today I’ll share insight into our first quarter performance and the industry trends supporting our growth. We wanted to provide additional insight into our business for shareholders, so today I’ll focus on opportunities in our financial institutions channel. I’ll conclude by sharing an update on our management team and corporate governance enhancement. In the first quarter we generated record adjusted earnings per share of $0.69, up 8% year-over-year, this growth benefitted from strong revenue growth of 12% as well as ongoing share repurchases which would lower our fully diluted share count by 4 million shares over the past 12 months. We produced a record $141 million of adjusted EBITDA for the first quarter, the adjusted EBITDA margin declined 93 basis points year-over-year to 13%, primarily due to further decreases in the Fed funds rate and the re-pricing of certain ICA contracts, excluding cash sweep revenue which declined $8 million adjusted EBITDA margins remained flat year-over-year. After a slow beginning to the quarter advisor additions accelerated in March, looking forward we see this momentum continuing as our pipeline remains strong with a diverse array of independent producers, financial institutions, RAAs and retirement plan advisors. We maintained excellent production retention of 96% which includes the departure of a large financial institution with 40 advisors. Under these conditions in the first quarter we attracted 53 net new advisors. We’re confident in the strength and sustainability of our business models and the long-term migration with advisors to the independent channel. I’d now like to comment on our financial institutions business and the many growth opportunities that lie ahead for us, back in 2007 we recognized an opportunity to expand our presence in that marketplace and further diversify our revenue. We sought a dedicated…

Thank you, Mark. This afternoon I’ll be discussing four main themes; first I’ll address the fundamental drivers behind our revenue in the first quarter including details on advisor productivity. Second I’ll review our progress in managing our expense structure. After that I’ll discuss how these factors are contributing to our bottom-line results and finally I’ll conclude my remarks with a summary of our capital management activity. In the first quarter we generated revenue of 1.1 billion representing 12% growth year-over-year, this growth was driven by sustained advisor productivity, market appreciations and net new advisor growth. These factors led to growth in asset levels which rose 13.5% year-over-year to 447 billion and AUM per advisor climbing from 29.5 million to 33 million during that time period. Sustained investor engagement this quarter contributed to strong advisor productivity as measured across both net new advisory assets and commissions per advisor. Advisors generated a record 4.4 billion in net new advisory asset flows representing 11% annualized growth with the added benefit of market appreciation, advisory assets grew 21% over the last year to 158 billion as of the end of the quarter. Driven by growing investor demand and enabled by our robust and scalable fee based offering utilization of advisory services by our advisors continues to expand. As a result of this trend fee-based assets have doubled from 6 million per advisor in early 2008 to 12 million per advisor today. Going forward we expect advisory AUM to steadily grow beyond the current 35% of our total AUM, as it represents over 50% of new sales. This trend benefits our performance in three ways first it contributes to advisor productivity as advisors are able to effectively expand the capacity of their practice to manage more assets, second, it expands our reoccurring revenue stream which…

and:

(Operator Instructions) Our first question comes from the line of Chris Shutler of William Blair. Your line is now open.

Hey, guys. Good afternoon. William Blair: Hey, guys. Good afternoon.

Hi, Chris.

Hey, Chris.

Let’s see so the -- this is probably for Dan, so the transaction in fee line into P&L it looked like it was up less than 1% year-over-year. So help me think about that as seasonality and just how it should be trending for the year? William Blair: Let’s see so the -- this is probably for Dan, so the transaction in fee line into P&L it looked like it was up less than 1% year-over-year. So help me think about that as seasonality and just how it should be trending for the year?

I appreciate talking about transaction sure that’s revenue?

Transaction, yes, correct. William Blair: Transaction, yes, correct.

Yes, sorry. Yes. There is several sources of revenue in that line item, right. One is just the transactional activity that occurs associated with advisors investing their client’s resources or money. The second place that occurs is just fees associated with advisors pay to us whether it be technology fees, association fees et cetera. And I think again, that’s primarily driven by the transactional activity that occurs inside, appeared for the quarter as well as just the fee that comes, the growth and the advisors with the changing numbers of advisors that occur on a year-on-year basis. And you have to remember that the comparison on a quarterly basis prior to the 2013 first quarter had a large elevation in terms of activity in the first quarter of 2013 as you’ll remember we had kind of the unlocking of investor engagement because of the clarity around, tax policy and that created a bit of inflated activity if you will from tax activity in Q1 of ’13. You also have the conference fees that fall into that line when you had the biggest difference is because you had the Masters conference and the Summit conference which was flip flop last year, and the Masters conference drives, is a larger participation than Summit. So you got a roughly about $3 million differential in the cost of those conferences. So those are the primary drivers.

Okay and that makes sense. And then, totally unrelated, but I noticed the number of hybrid firms was down quarter-over-quarter which I think makes slight, the growth in the asset on the hybrid side even more impressive of 4.4 million. So can you just talk about those two trends and exactly what you saw in the quarter? William Blair: Okay and that makes sense. And then, totally unrelated, but I noticed the number of hybrid firms was down quarter-over-quarter which I think makes slight, the growth in the asset on the hybrid side even more impressive of 4.4 million. So can you just talk about those two trends and exactly what you saw in the quarter?

Yes. Sure. So from just a pure growth standpoint, I think we have got a typo on the numbers relative to fourth quarter and numbers in terms of number of firms affiliated because we actually do see sequential growth in traffic. Do you know that number?

I will follow-up with that.

Okay we will follow-up with you, but there’s a typo there because there definitely is a strong growth there, both from an asset standpoint as well as advisor supported and the number of firms that are affiliated with that business model or so.

Yes you certainly Chris wouldn’t have said that we went down in RAA in terms of this last quarter at all. And that’s clearly is a place there.

Yes and I think Chris, you had as much as 10% sequential growth in assets in that business line from the fourth quarter.

Got you. Alright guys thanks a lot I will hop back in the queue. William Blair: Got you. Alright guys thanks a lot I will hop back in the queue.

Thank you.

Our next question comes from the line of Bill Katz of Citigroup. Your line is now open.

Okay, thanks so much. Just going back to your commentary about the obviously with advanced institutions, what percentage of this particular quarter’s growth came from that area, and how quickly could you migrate to some of these longer lived opportunities in terms of revenue capture or FA capture? Citigroup: Okay, thanks so much. Just going back to your commentary about the obviously with advanced institutions, what percentage of this particular quarter’s growth came from that area, and how quickly could you migrate to some of these longer lived opportunities in terms of revenue capture or FA capture?

Great questions, Bill, thanks for that. The couple of things is that we have seen what I would describe as increased growth in the use of advisory platforms, but it wouldn’t have represented a huge percentage of this quarter’s gain in the advisory assets because it’s still, I didn’t see such a relatively small segment, 80ish billion or 90ish billion of the total assets were there. So what we were seeing is as part of your acceleration point, so that we are going into bank programs, and credit union programs, and talking to the program managers about educating and supporting their entire in program advisors and making the conversion over to advisory assets. We’re doing a lot of really good work and conferences with those folks as well, and trying to move that migration along. And if that’s the way I feel comfortable if that’s what they want to do with the business. So I’d describe that as something that we can accelerate further as we go along this year and next year, but I would describe that as, served by certain stage. You can only do so many as of one, and really because of their willingness to want to alter their program in some way. Well I think we can accelerate it, and we’re trying different experiments to grow faster is in the area of adding advisors into existing programs. That’s very straightforward for a bank program, they have several millions where they immediately agree that there is a need for more advisors and it’s a matter of really moving them along. The do have some financial commitments that they make, to that advisor joining their bank. They are an employee of the bank, so there’s expenses related to that. So let’s feel comfortable by making the investment. What we were trying to do is experiment with two things. One is, we do the actual recruiting for them. That we know works well, so we continue to add more recruiters on our side to move those along faster. And then secondly, in some cases we are trying to find ways to help finance the cost of that individual for the first couple of years until they get up for the speed. And those are some small scale experiments in the field this year, and if they work for them, expand them as we’re go into next year.

Okay, that’s helpful. And then just a question for Dan, just on the G&A discussion is your commentary about the regulatory pressure that could push it more to the 5% to 6% range, if that work persists. If that idiosyncratic to LPL or is that more of a holistic view of what’s going on for the industry at launch? Citigroup: Okay, that’s helpful. And then just a question for Dan, just on the G&A discussion is your commentary about the regulatory pressure that could push it more to the 5% to 6% range, if that work persists. If that idiosyncratic to LPL or is that more of a holistic view of what’s going on for the industry at launch?

Yes. I think it’s definitely more systemic related to the entire industry as the scrutiny, if you will, relative to the regulators have just expanded across the whole industry, across retail products in general, and I think we are just trying to co-relate that and help you understand the potential of that, should that scrutiny continue to evolve.

And I think there is plenty of evidence of it, let me just Bill a little additional color, example would be some of the recent press coverage of brokers -- on the broker side of the industry with bad records, that are in broker check, they will be more than likely, some activity by regulators to work on that and whatever we need to make a change like that across the industry. We all have two adopt new procedures, new policies, that comes at a cost annual in terms of both human capital and some technology, high frequency trading certainly a popular item of the moment, just to point out to the callers. We do not receive any order for payments with the firm. So just important to know that has no effect to us at all, unlike some others in the industry. But what is important about high frequency trading. Again it’s likely it leads you to some changes in your technology and systems to deal with what will be likely new order flow or new market discovery data that’s there. It’s well known that the SEC is working on the CATs program which is the consolidated audit trial or equities and other securities and through equities and as a member of firm all members of federal will need to add clear and better data into this initiative. So these are just wide reaching sort of post-Dodd Frank activities and we certainly support a well regulated and well thought out regulatory structure that’s there, we certainly have the scale to deal with that better than most, as we think about how those changes come through the industry.

Thank you for taking my questions. Citigroup: Thank you for taking my questions.

Sure, thanks Bill.

Thank you. Our next question comes from Joel Jeffrey of KBW. Your line is now open.

Good afternoon guys. Keefe, Bruyette & Woods: Good afternoon guys.

Good afternoon.

So I think you guys said that roughly 35% of your client assets are in fee-based products and there seems to be a growing percentage. I am just kind of wondering how higher percentage could that get and is there sort of any kind of natural limitation just based on your business that would prevent it from being the entire amount I guess? Keefe, Bruyette & Woods: So I think you guys said that roughly 35% of your client assets are in fee-based products and there seems to be a growing percentage. I am just kind of wondering how higher percentage could that get and is there sort of any kind of natural limitation just based on your business that would prevent it from being the entire amount I guess?

And so let me start then Mark can add any color to that just as you said today its 35% if you look back over the last five years that’s moved up from the 27% to 28%. So you have seen a pretty material shift just in the last five years. And what we’ve seen in the last couple of years is just the pace of new sales or think about new assets gathered the mix of that has accelerated even in greater to advisory products. In fact I think this year we’re running in the 57% range in terms of mixed sales. And so if you just do the math on that and you push that out over a three to four years you grow that from 35% north of 40%, so think about a 1% to 2% incremental increase each year. I think when you think about the opportunity set for how high can it go certainly there is great demand at the investor level for that type of relationship, and that type of orientation towards their relationship. This year a responsibility et cetera that comes associated with an advisory account. And you match with the efficiency gains the advisor gets from managing and supporting that type of business. Well then you have the two parties that are well aligned that will help support that number continuing to transition off, I don’t know Mark if you have any additional color to that?

Yes I think just also -- actually where regulatory pressure is useful because the world of an advisory account is a world in which it’s done through being a actuary and the relationships, it’s a principles-based regulation scheme as opposed to a rules-based regulations scheme. So my definition there is not as many rules that are so tied into the reporting that you have to do and how you have to do it. So I think there is an awfully large push occurring for advisors themselves, that see that that world is a little bit easier to operate in, therefore it’s highly aligned with our clients because they’re getting paid to increase the value of assets overtime and they have a penalty if assets go down in value, but there is a nice alignment between the advisor and that client. So there is an awful lot of good tailwinds in that, that will help us well.

Okay, great. And then just lastly from me, I appreciate the guidance on sort of the near-term outlook for alternative investment in revenue. But I mean thinking about that going forward you have had a couple of quarters where that was particularly strong. Is there anything on the horizon again that would be sort of lead you to believe that that number could pick up meaningfully again or is this kind of a consistent run rate we should think about longer term as well? Keefe, Bruyette & Woods: Okay, great. And then just lastly from me, I appreciate the guidance on sort of the near-term outlook for alternative investment in revenue. But I mean thinking about that going forward you have had a couple of quarters where that was particularly strong. Is there anything on the horizon again that would be sort of lead you to believe that that number could pick up meaningfully again or is this kind of a consistent run rate we should think about longer term as well?

So two things, one we do monitor obviously the environment for potential scheduled liquidity events over product manufacturing considering the option and alternative. And we do see some in the horizon in second quarter and third quarter that would tend to as we’ve said create a certain level of elevation similar to Q1 and second quarter. And you could see a little bit more elevation in the third quarter, I think we’re still trying to get clarity and make sure that those liquidity events occur before necessarily giving you any direction on that. But based on what we see out on the horizon that’s how it’s showing up the next six months. I think if you look at it on a more permanent basis, the base line AI production was always in sort of the 8% of overall product mix for commission-based business. We believe just with the low interest rate environment and the continuing expansion of the utilization of alternative investments that that base line may be bumping up in the 10% to 11% range. It certainly will not sustain the level that you saw in the third quarter and fourth quarter where it was more in the 18% range. So we do expect that elevation to trend down as the year flows as then probably settle into a baseline it was slightly higher than what we’ve historically seen in that 10% range. Does that help?

Alright thanks for taking my questions. Thank you. Keefe, Bruyette & Woods: Alright thanks for taking my questions. Thank you.

Thank you. Our next question comes from the line of Ken Worthington of JPMorgan. Your line is now open.

Hi, thank you. First on the expense side, and you have given color on the compliance and regulatory side. Is there any reason for the compliance and regulatory cost actually go down from the level they were this quarter? If the world is seeing more regulatory scrutiny, is regulators are digging in more, it just doesn’t seem like we should be thinking about 1Q moderating and if anything may be the pace picking up. Is that fair or am I off base in this comment? JPMorgan: Hi, thank you. First on the expense side, and you have given color on the compliance and regulatory side. Is there any reason for the compliance and regulatory cost actually go down from the level they were this quarter? If the world is seeing more regulatory scrutiny, is regulators are digging in more, it just doesn’t seem like we should be thinking about 1Q moderating and if anything may be the pace picking up. Is that fair or am I off base in this comment?

So as we look at core G&A over the reminder of the year of which certainly the regulatory and legal oriented expenses are part of core G&A. We expect that run rate to be level or directionally flat relative to Q1. And then that puts you in that, it’s still as we said in that trajectory of 4.5% increase in core G&A across the entire year.

The only thing I would add is some regulatory costs one peer, but I think they come in the form of specific settlements, like the one we had recently with FINRA it show up, when they show up. And there are also you might describe more there Ken is really sort of the infrastructure cost of regulation. And I think what we’ve got in the P&L and Dan just did a good job of giving you the 30,000 foot level where the numbers are going but just in terms manage would that then recover, is if you have got the company putting in a lot of investment in technology to make ourselves more efficient and to make ourselves better in customer service to our advisors. And so things like middle ware investments and our operations groups we know create a better outcome for the investors to work with the advisors we support, they also creates a lot of efficiency for us in terms of headcount reduction and so forth. We might then take some of that efficiency rather than turnaround and put it into investments and technology or even people for other reviews of products. We’ve recently established a variable annuity review group which we’ve had essentially in the supervisory structure of the firm but we set it up as a special product supervisory function, don’t want to get too technical here. But what that means is that you have a group that are really deep experts in VAs and do a review of those VAs over and above the normal process, we have it’s similar what we do for alternative investments and have been doing in the special products review group there, so that’s a good example of bit of a two and fro what we gain some efficiency we use some of that efficiency, to go to profits and some of that efficiency to go back into investments and strengthening the regulatory environment, if that helps to them.

That’s great. And then may be Dan on the service value commitment, can you just talk about what the goals are over the next one to two quarters in terms of expectations for that what needs to be accomplished. And then what will the impact be of that on the P&L? I know you gave guidance overall but what are you trying to accomplish is short-term and what does it do to expenses? JPMorgan: That’s great. And then may be Dan on the service value commitment, can you just talk about what the goals are over the next one to two quarters in terms of expectations for that what needs to be accomplished. And then what will the impact be of that on the P&L? I know you gave guidance overall but what are you trying to accomplish is short-term and what does it do to expenses?

Yes so we have -- we achieved about $5 million of incremental savings in ’13 our target for this year is an incremental 10 million. Most of that savings is spread over the next three quarters and most of that is driven off of continuing to transition more jobs to an outsourcing solution and then successfully obviously once you have completed the cut over, you’re able to then recognize the savings. And so that’s the majority of the driver of the $10 million of incremental savings this year. We do have some technology and automation products that are -- sorry projects that we’re working on this year that we’ll complete towards the end of the year which will create savings opportunity as we move into ’15 where because of that new automation we’ll be able to eliminate as many as 90 to 100 jobs. The majority of those savings will show up in ’15.

Okay, great. Thank you very much. JPMorgan: Okay, great. Thank you very much.

Thank you. And our next question comes from Alex Kramm of UBS. Your line is now open.

Well hi good evening. Just starting on the, coming back I guess to the strong advisory asset a growth that you have posted here for the last two quarters. Can you maybe break this down a little bit more so we can get a more feeling of where this is all coming from? I guess how much of that let’s say 4.4 billion is driven really by new advisors that you’re tracking to affirm. How much as advisors doing a good job of selling advisory products or accounts. And maybe was there any detraction in this quarter also as you lost some advisors perhaps? And then related to that just a real quick, I think is there a actually decent component in that number that is kind of like of transitioning assets or I guess what I am trying to say is are there actually assets where a broker will take, something from his brokerage account actually, sell it into or transition to an advisory model. Or is most of that money actually all new money to the firm. UBS: Well hi good evening. Just starting on the, coming back I guess to the strong advisory asset a growth that you have posted here for the last two quarters. Can you maybe break this down a little bit more so we can get a more feeling of where this is all coming from? I guess how much of that let’s say 4.4 billion is driven really by new advisors that you’re tracking to affirm. How much as advisors doing a good job of selling advisory products or accounts. And maybe was there any detraction in this quarter also as you lost some advisors perhaps? And then related to that just a real quick, I think is there a actually decent component in that number that is kind of like of transitioning assets or I guess what I am trying to say is are there actually assets where a broker will take, something from his brokerage account actually, sell it into or transition to an advisory model. Or is most of that money actually all new money to the firm.

Got it. Let me give you a couple of points and then Mark please add any color to that. If you breakdown the growth in the advisory which has been in that 11% on an annualized basis over the past couple of quarters, and advisory assets about 50% comes from new advisors and roughly 50% from existing advisors. If you look at that across the hybrid business model, our hybrid RAA business model versus the corporate RAA model again over the last couple of quarters, that’s been split about 50-50 in terms of the overall asset growth across those two business lines. And typically speaking I think again you have a good healthy mix of those assets that are gathered by our existing advisors where you’ll see typically about 75% of those being new assets that are attracted from either existing clients or new clients that they acquire versus 25% actually being transition or converted over from brokerage account to the advisory channel. Mark?

Yes I think the only other color I would add to that, I do think that you have seen an acceleration in Q4 and Q1, and I think it we’ll continue because of the success of our hybrid RIA platform, as for the kind of a 50% of the growth, that says a lot. If you remember in LA we didn’t have one and so, you are seeing the benefit of that investment and now it really kicking in to a higher growth which is absolute yield for from my position and from yours. And the center part of it is I would say that it’s also the development of a pretty broad range of sophisticated strategies for advisors to use. Not to get too technical but you’ve set sort of the self-help model and advisor who makes their own investment decisions and implements those including trading. Remember that we gave and really price variant extensively that enhanced trading tool just last year, which has traded over 1.5 million shares very rapidly. And so that’s -- what we are seeing is that just makes it much more efficient for an officer who is software active if you will as an advisor, in making investment decisions. It makes our life easier. So that means that they can spend some more time working with existing clients and working on prospects to grow their business. We are seeing that happen to some degree here. And then the other place that we are seeing it is in the centralized platforms where basically as an advisor, you can say, I am going to outsource that investment management choice and I have got, I think six to eight different choices LPL is one, the Black Rock is another and many well known names that are available to be the use of my client. And in that case I’m not involved in the re-balancing it at all. That’s all outsourced to LPL and we use our scale to make that very efficient. These numbers are directionally correct, but roughly 22ish percent of sales in the advisory platform are now going to the centralized platforms and the balance are in the advisor as the manager model. And that’s significant because a handful of years ago again 5ish years ago, sales in the central platforms would have been 2% or 3%, they are fair. This is really the us investing in the platform, create solutions that advisors find work for their clients to grow their business and allows us to make them much more efficient. That is right on our strategy and right on what we are trying to do to really build the business here with advisors.

Great, that’s great color, thanks. And then secondly, maybe a little bit more near-term on the revenue line, on the commission’s line you gave obviously some color around alternative investments, and that those would be somewhat flat. Can you talk about other things that we should be thinking about as we approach the -- or as we are in the second quarter now I mean, it sounds like investor engagement or investor confidence is as good as it gets right now. So I am sure the selling environment has been pretty good, but it’s tough to see that’s going much, much higher, I guess. And then secondly, also I assume that a lot of your end customers made a lot of money and there could be some capital gain in taxes and so forth. So just a couple of things that, anything we should be thinking about in particular as we think about assets and commission levels for the second quarter that you’d highlight? UBS: Great, that’s great color, thanks. And then secondly, maybe a little bit more near-term on the revenue line, on the commission’s line you gave obviously some color around alternative investments, and that those would be somewhat flat. Can you talk about other things that we should be thinking about as we approach the -- or as we are in the second quarter now I mean, it sounds like investor engagement or investor confidence is as good as it gets right now. So I am sure the selling environment has been pretty good, but it’s tough to see that’s going much, much higher, I guess. And then secondly, also I assume that a lot of your end customers made a lot of money and there could be some capital gain in taxes and so forth. So just a couple of things that, anything we should be thinking about in particular as we think about assets and commission levels for the second quarter that you’d highlight?

Yes so, you’re right. With respect to Q1, I think the durability of the investor engagement certainly showed up especially with some of the headline always that created short-term volatility, and we are seeing that being translated into good strong advisor productivity. We are seeing that momentum continue into second quarter. So we are certainly encouraged by the level of advisor productivity that we are seeing. I think if you look across different products, we think there is opportunity to continue to see some growth in the variable annuity product line as many of those product manufacturers now that we have a 10 year treasury that is in the range, that is allowing them to reinvest in their products, to re-engineer their products, creative features associated with those products, and even have the appetite for new assets. We are seeing opportunity for growth along that particular product line which is significant in the overall mix of commission business. So I think that’s certainly is something to think about as we move forward. With respect to the rest of the product lines, we have seen an interesting mix in growth in fixed annuity because again the change in the interest rates has created a greater gap in the yield that fixed annuities had to offer relative to other comparable bank products, and so we have seen good momentum in growth and expect that to sustain itself. And that’s the product line that actually we see a good growth prospects in the IS channel, our institution services channel because of the nature of their investors, and Mark, anything to add?

I think that and this was a good rendezvous, I would agree that the old threes don’t grow to the sky, right so we got to hang in there is a reasonable amount of growth that engagement represents but I don’t think we should also -- we shouldn’t forget how low we went. And the need for investors to really position our portfolios for retirement and very long-term items and that is the source of it. And also remember that our business -- we have so many middle class Americans in it. Those act a bit more like a floor 1-K business where these are regular savers out of every pay check they are putting some amount of money away out of every month they are putting some amount of money away. When they get bonuses, either every six months or every year there are putting a chunk of that away. And that definitely drives our ongoing activities in addition to just general business growth for the advisors. I think that mindset is maybe helpful to understand for you as well.

Like sort of summarize, don’t expect too many huge swings in the second quarter outside of… UBS: Like sort of summarize, don’t expect too many huge swings in the second quarter outside of…

If it fit right, fair enough. Alex Kramm – UBS: Very good to know, that’s great. Thank you.

Thanks Alex.

Thank you. Our next question comes from the line of Bill Katz of Citigroup. Your line is now open. Bill Katz – Citigroup: Just a slow modeling follow up, Dan, I think you mentioned that part of the decline in the other revenue line was just due to some re-amount commissions from non traded REIT. What percentage of -- I think that what you said, if not I apologize. But what percentage of the 16 million you reported this quarter is actually related to non traded REITs? I presume there’d be some lift to that if you’re right on Q2 - Q3 levels bumping up a little bit. Just want to see what’s more sustainable underneath that.

And you’re right Bill, it was -- if you look at it sequentially, it was off 5 million to 6 million. If you look at just the elevated level of alternative investment sales, it caused a headwind of 5 million to 6 million quarter-on-quarter. I don’t have the exact number but we’re happy to…

A proxy number would be roughly 80% of all of our alternative investments or non traded REITs. And so therefore by far the vast majority of any variability in that number is going to come from non traded REIT sale.

And there’s other things and other revenue as well -- so that’s why it’s not quite that clean, but directionally it’s in the 10 million to 11 million range.

And there’s other things and other revenue as well -- so that’s why it’s not quite that clean, but directionally it’s in the 10 million to 11 million range. Bill Katz – Citi : Okay, that’s helpful. Thanks for the extra color.

Absolutely.

Thank you. Our next question comes from the line of Chris Shutler of William Blair. Your line is now open. Chris Shutler – William Blair: Hey guys, thanks for taking my follow up. On the alterative sales, I just want to make sure I have the numbers right, because I know you’ve said this a few times, but, so doing the math so were alternative sales in the quarter commissioned about $61 million - $62 million?

So Chris it’s a baseline with typically 40 million, which is what we said going into third quarter and fourth quarter of last year -- where we saw as much as 40 million of additional sales in third and fourth quarter. And this quarter we saw more in the range of 15 million to 17 million, so you’re directionally close. Chris Shutler – William Blair: And then you said, flattish in Q2 relative to Q1 and then trending down to 10% to 11% in the back half of the year?

Yes, that right. With the exception of third quarter, you may actually see more in line with first and second quarter, because there is liquidity event that’s been planned and it’s just sometimes hard to know exactly how much of those assets will be repositioned and whether or not they ultimately come about and they do it in the time frame that they expect. So, I would think about third quarter right now being more in line with first and second quarter.

I think what would be helpful for all listeners and Chris probably your question is that there’s two ways of course -- alternative investment fails and products show up for us. One is just the ongoing creation of a new set of products in the right part of the cycle, right, and we’re in a particularly nice part of the cycle for real estate investments, really across the board, as we all see in a much different way. That kind of steady state is all we were doing was that, you wouldn’t see this kind of volatility because the history is like for us. The new phenomenon that’s occurred is the lifting of these, what were previously liquid REITs going into elusive status and what’s helped me to think about that it’s just like the IPO market, right. The market conditions have to be right for them to be able to take that out to the public market and therefore we get a lot more volatility, because you'd have an offering that was slated to go in first quarter that’s something now gets pushed to second quarter, gets pushed to third quarter, much like an IPO does. That’s the environmental factor for what is a relatively new phenomenon in these markets which are in liquid non traded REITs going to the public markets to create liquidity, create them as a pool of investible cash for consumers to re-circulate in some way, some of which invest in other non traded REITs and some of which ends up in other products overall. Chris Shutler – William Blair: All right, and then one more if you don’t mind -- for the non cash transition assistance increased to I think 1.6 million quarter-over-quarter. Just looking back historically since you’ve just been disclosing that metric, it looked like a pretty big jump relative to past quarter or so just curious what’s going on there particularly given no recruiting numbers, which I recognize were held back by one large bank.

And so Chris, a lot of that -- there’s two drivers of that. The amount of loans continues to grow, so some of that’s just legging our opinion to ramp up that number. A big piece of it though is reflected in the mix of business that occurred late in the third quarter and fourth quarter and recruiting, remember we had a big bank that we recruited in September that had a -- that associated with that came a much bigger mix of loans used for transitional assistance for givable loans versus just the cash up front. And then in fourth quarter, we continue to see that trend and so that’s what you’re seeing show up now in Q1. Chris Shutler – William Blair: All right, thanks guys.

: Thank you. Our next question comes from the line of Alex Kramm of UBS.

Alex, welcome back. Alex Kramm – UBS: I guess, drag it out a little bit longer right, I mean, nobody wants to go home.

We’re here all night. Alex Kramm – UBS: So, no-no just maybe following up on the transition payment, I think you said they seem to be stable at 20% to 25% range, but can you maybe make a general comment on competition for advisors in general, what are you seeing -- I hear anecdotally that just the amount of incoming phone calls to like brokers, like postcards they get and things like that has been going up again. Do you see the same things, the more competition, is there more pot market or is that maybe not representative of what you’re seeing out there?

You know, 12 years experience here right, and this is Mark. It just feels like what happened after you’ve had a market downturn followed by a market upturn, and advisors are over kind of the busy period that we saw them in last year and a little bit this year. And now what they’re doing is, okay I've got my staff pretty much where I need them, I’m used to this new volume, I’m liking it and oh by the way my numbers look fabulous. And so I’ve been thinking about moving and now I think I’ll move. So we’re seeing our pipelines from our marketing efforts like those postcards and other really wonderful things that we do, that are really climbing and that gives us lots of positive feeling about future growth of new advisors joining us, whether they are in financial institutions or whether they’re independent or whether they’re hybrid RIA. And so we certainly would feel our competitors are probably seeing something similar, but we do think that our results have shown consistently, as you know we’re the market leader for I think three years in a row now -- in terms of net new advisor adds. So we’re going to be the winner anytime that churn churns up. Also, remember that in the work done by a consultant asking advisors who they would most likely go to, we are the number one firm. They would like to be out of, if they weren’t at the firm they’re at today. That’s a really strong position that when the market churns more we’re going to benefit more than our competitors will, so is it competitive out there? Absolutely. Are we seeing you know some good offers by our competitors to people in motion, absolutely. Are we seeing them raise prices a bit in terms of movement or transitions, absolutely. And I could tell you the same story for 2005 and for 2007 and so forth and we always find a way through to get more than our fair share. Alex Kramm – UBS: Great, helpful. And then just lastly and then we can all go home, but I think M&A was a topic that we didn’t really discuss today, so just curious I mean, you talked about the high regulatory cost in the industry and everything, so -- it seems like there should be the environment where some of your competitors might still say, like -- I've had enough and just looking forward, in terms of stale acquisitions. Is that still something that you’re thinking about? Are there candidates that you’re talking to and like is the number increasing or are you still more focused on things like hey, maybe there’s really something we would more likely look at that adds new products or new vertical or something like that, so what’s the latest thinking there?

That’s a great and relative first question. Let’s take your last part of that first, which is we’re really interested in acquisition that are purely additive to the base. We’re not particular interested in acquisitions that are outside our current footprint. That was the phase we're in before, that’s only about Fortigent, National Retirement Partners and Concorde, because they were really good ways for us to enter into new adjacencies in the market place. And you can now see we’re using some of those acquisitions to build out our offer in the bank walled spaces as an example. So, I don’t really see and we don’t see as a strategy matter that those adjacencies we really need to do any acquisitions for we're in the space as we want to be. So, therefore that leads us what I described as the core acquisition, just as you said it, a broker-dealer that comes up for sale, we always look, we have a very clear acquisition model which is your firm is going to join our platform, because that’s how we get scale and sometimes that’s a popular choice and sometimes it’s not for someone who’s selling. But that is the way we do it. And secondly, we are very particular about getting a good return on capital. I’m sure you’re thrilled to hear that. I know, I’m thrilled to hear that and say it. And I would say that we’re particular in lots of ways, meaning that if we wouldn’t take an advisor, an organic under writing or recruitment, we will not take them through acquisition and so when we look at a property, one of the first things we look at are the records that are there and it’s filled with lots of records that are people we wouldn’t take…

Thank you. I’m showing no further questions at this time.

All right, thanks everyone.