A slowdown in advisor recruiting seems to have squeezed growth and profits at LPL Financial.

The nation’s largest independent broker-dealer, reported a 3% drop in earnings for the first quarter, with net income falling to $53.1 million for the first quarter from $54.7 million a year earlier.

In an announcement Wednesday afternoon, the company faulted sluggish recruiting in the first part of the quarter.

“After a slow start to recruiting to begin the year, our business development team saw improving conditions in March,” said Mark Casady, chairman and CEO of LPL Financial, in a statement. “As a result, we finished the quarter with 53 net new advisors and are seeing positive momentum in our pipeline heading into the second quarter.”

LPL had added 110 net new advisors in the fourth quarter last year, and 154 in the third quarter.

Net revenues grew 11.6% year over year, to $1.087 billion for first quarter 2014 from $974 million in the year-ago quarter, aided by growth in both commission- and fee-based business, Casady said.  

The independent B-D reported advisor retention of 96%, down just slightly from its 97% retention rate for 2013.

Advisory and brokerage assets grew 13.5% year over year to $447 billion as of March 31, the company said. "Driven by growing investor need for advice and enabled by our robust offerings, advisors have been able to effectively expand the capacity of their practice to manage more assets,” LPL Financial's chief financial officer, Dan Arnold, said in the statement. “Notably, much of this growth is driven by the momentum in our higher-margin fee-based business, which generated a record $4.4 billion in net new advisory assets this quarter."

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