What changed in this filing

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Item 1A. Risk Factors

2026-02-23 compared with 2025-02-20 · 91 added, 74 removed, 475 unchanged (26% of the section changed)

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We believe that competition within our industry will intensify as a result of consolidation and acquisition activity and because new competitors face few barriers to entry, which could adversely affect our ability to recruit new advisors and retain existing advisors.

Additionally, we expect our current and future competitors to continue to invest in, develop and integrate new technologies, including artificial intelligence and machine learning solutions, to reduce costs associated with providing wealth management services.

If we are unable to achieve similar cost reductions our business may become less competitive, which could make it more challenging to retain advisors on our platform or attract new advisors, which could have a material adverse effect on our business.

In addition, while we believe that our business is well-positioned to take advantage of technological development, the perception that novel applications of technology could disrupt our business could cause the price of our common stock to fluctuate substantially and result in losses for our investors.

If we fail to continue to attract highly qualified advisors, or if advisors licensed with us leave us to pursue other opportunities, we could face a significant decline in market share, commission and fee revenue or net income.

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treasury bills, which are generally based on prevailing interest rates.

Our revenue from our client cash programs has declined in the past as a result of a low interest rate environment, and our revenue may decline in the future due to decreases in interest rates, decreases in client cash balances or mix shifts among the current or future deposit sweep vehicles, client cash account or money market accounts that we offer.

Such a decline has occurred, and could occur in the future.

The Federal Reserve steadily increased its target federal funds rate in 2022 and 2023 to combat rising inflation, and while we have experienced a sustained higher interest rate environment, the target federal funds rate was reduced in the second half of 2024, with further reductions anticipated.

Our client cash programs generate a significant portion of our revenue.

Our revenue from our client cash programs has declined in the past as a result of a low interest rate environment and may decline in the future due to decreases in interest rates, decreases in client cash balances or mix shifts among the current or future deposit sweep vehicles, client cash account or money market accounts that we offer.

While the Federal Reserve steadily increased its target federal funds rate in 2022 and 2023 to combat rising inflation, in 2024 and 2025, the Federal Reserve reduced its target federal funds rate, with further reductions possible.

If the Federal Reserve continues to reduce its target federal funds rate from current levels, our revenue will be impacted.

Our revenue from our client cash programs also depends on our success in placing deposits and negotiating favorable terms in agreements with third-party banks and money market fund providers participating in our programs, as well as our success in offering competitive products, program fees and interest rates payable to clients.

The expiration of contracts with favorable pricing terms, less favorable terms in future contracts, the inability to place deposits with third-party sweep banks, or changes in client cash or money market accounts that we offer could result in declines in our revenue.

The expiration of contracts with favorable pricing terms, less favorable terms in future contracts, the inability to place deposits with third-party sweep banks, changes to regulatory rules or interpretations governing the fees we

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

A sustained low interest rate environment may also have a negative impact upon our ability to negotiate contracts with new banks or renegotiate existing contracts on comparable terms with banks participating in our client cash programs.

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As is common in our industry, we have been subjected to and are currently subject to legal and regulatory proceedings arising out of our business operations, including lawsuits, arbitration claims, governmental subpoenas and regulatory, governmental and self-regulatory organization (“SRO”) inquiries, investigations and enforcement proceedings, as well as other actions and claims.

Many of our legal claims are initiated by clients of our advisors and involve the purchase or sale of investment securities, but other claims and proceedings may be, and have been, initiated by state-level and federal regulatory authorities and SROs, including the SEC, FINRA and state securities regulators, as well as clients of Independent RIAs.

Many of these legal claims are initiated by clients of our advisors and involve the purchase or sale of investment securities, but other claims and proceedings may be, and have been, initiated by state-level and federal regulatory authorities and SROs, including the SEC, FINRA and state securities regulators, as well as clients of Independent RIAs.

The outcomes of any such legal or regulatory proceedings, including litigations, arbitrations, inquiries, investigations and enforcement proceedings by the SEC, FINRA, DOL and state securities regulators or attorneys general, are difficult to predict.

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Moreover, new and developing state and federal regulatory requirements with respect to standards of care and other obligations, as discussed under “ Risks Related to Our Regulatory Environment” below, may introduce new grounds for legal claims or enforcement actions against us in the future, in particular with respect to our brokerage services.

We may also become subject to claims, allegations and legal proceedings related to employment matters, including wage and hour, discrimination or harassment claims, or matters involving others’ intellectual property or other proprietary rights, including infringement or misappropriation claims.

We may also become subject to claims, allegations and legal proceedings related to employment matters, including wage and

hour, discrimination or harassment claims, or matters involving others’ intellectual property or other proprietary rights, including infringement or misappropriation claims.

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

Compared to wirehouses and other employee model broker-dealers, we generally offer advisors wider choice in operating their businesses with regard to product offerings, outside business activities, office technology and supervisory models.

Our approach may make it more challenging for us to comply with our supervisory and

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

Our approach may make it more challenging for us to comply with our supervisory and regulatory compliance obligations, particularly in light of our limited on-site supervision and the complexity of certain advisor business models.

Misconduct and errors by our employees, advisors or Independent RIAs could be difficult for us to detect and could result in actual or alleged violations of law by us, investigations, litigation, regulatory sanctions, or serious reputational or financial harm.

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In addition, we cannot predict the costs or time that would be required to find an alternative service provider.

We have transitioned certain business and technology processes to off-shore providers, which has increased the related risks described above.

2 certain business and technology processes off-shore, which has increased the related risks described above.

For example, we rely on several off-shore service providers, operating in multiple locations, for functions related to cash management, account transfers, information technology infrastructure and support and document indexing, among others.

To the extent third-party service providers are located in foreign jurisdictions, we are exposed to risks inherent in such providers conducting business outside of the United States, including international economic and political conditions as well as natural disasters, and the additional costs associated with complying with foreign laws and fluctuations in currency values.

In addition, we have limited international operations in Hyderabad, India.

To the extent we or our third-party service providers operate in foreign jurisdictions, we are exposed to risks inherent in conducting business outside of the United States, including international economic and political conditions as well as natural disasters, and the additional costs associated with complying with foreign laws and fluctuations in currency values.

We expect that our regulators would hold us responsible for any deficiencies in our oversight and control of our third-party relationships and for the performance of such third parties.

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In the event of such failure or interruption, there is no guarantee that we would be able to find adequate and cost-effective replacements on a timely basis, if at all.

Like us, these intermediaries are exposed to risks related to fluctuations and volatility in the financial markets and broader economy, as well as specific operational risks related to their business, such as those related to technology,

security and the prevailing regulatory environment.

Because we rely on these intermediaries, we share indirect exposure to these risks.

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

We have made acquisitions and investments and entered into strategic relationships in the past and plan to pursue further acquisitions, investments and strategic relationships in the future, including in connection with our institution offering and Liquidity & Succession solution.

These transactions are accompanied by risks.

For instance, an acquisition could have a negative effect on our financial and strategic position and reputation, the synergies expected to result from a business combination could fail to materialize, or the acquired business could fail to further our strategic or financial goals.

We can provide no assurances that advisors who join LPL Financial through acquisitions or investments in advisor practices will remain at LPL Financial.

Moreover, we may not be able to successfully integrate acquired businesses

into ours, and therefore we may not be able to realize the intended benefits from an acquisition.

We can provide no assurances that advisors or institutions that join LPL Financial through acquisitions, investments in advisor practices or strategic relationships will remain at LPL Financial.

As a general matter, when such advisors and institutions join LPL Financial, their assets under management will transition to our platform, supporting our growth.

If such advisors or institutions then separate from LPL Financial, their assets will transition away from our platform, and our business will lose their benefit.

Depending on the size and number of the practices or institutions that separate, the offboarding of assets from our platform could be significant, and our financial condition and results of operations may be adversely affected.

Moreover, we may not be able to successfully integrate acquired businesses into ours, and therefore we may not be able to realize the intended benefits from an acquisition.

For example, we may have a lack of experience in new markets, products or technologies brought on by the acquisition, we may have an initial dependence on unfamiliar supply or distribution partners, or the resources necessary to integrate an acquired business may exceed our expectations or the resources we have available.

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Our level of indebtedness could increase our vulnerability to general adverse economic and industry conditions.

It could also require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and

other general corporate purposes.

In addition, our level of indebtedness may limit our flexibility in planning for changes in our business and the industry in which we operate and limit our ability to borrow additional funds.

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Our Credit Agreement contains customary restrictions on our activities, including covenants that may restrict us from:

• creating liens;

• selling assets;

• engaging in certain transactions with affiliates;

• consolidating, merging or transferring all or substantially all of our assets.

In addition, our Credit Agreement contains covenants that are currently suspended but become effective if we or our subsidiaries incur or guarantee secured indebtedness in an aggregate principal amount in excess of $350 million.

Such covenants would restrict us from:

• incurring additional indebtedness or issuing disqualified stock or preferred stock;

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• making investments or acquisitions;

• creating liens;

• selling assets;

• guaranteeing indebtedness;

• engaging in certain transactions with affiliates;

• entering into agreements that restrict dividends or other payments from subsidiaries.

• consolidating, merging or transferring all or substantially all of our assets.

These restrictions may prevent us from taking actions that we believe would be in the best interest of our business.

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Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us.

If our indebtedness is in default for any

reason, our business could be materially and adversely affected.

If our indebtedness is in default for any reason, our business could be materially and adversely affected.

In addition, complying with these covenants may also cause us to take actions that are not favorable to holders of our common stock and may make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.

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available defenses;

the progress of fact discovery;

progress of fact discovery;

the opinions of counsel and experts;

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In addition, we must monitor the pricing of our services and financial products in relation to competitors and periodically may need to adjust commission and fee rates, interest rates on deposits and margin loans and other fee structures to remain competitive.

Competition from other financial services firms, such as reduced or zero commissions to attract clients or trading volume, direct-to-investor online financial services, including so-called “robo” advice, or higher deposit rates to attract client cash balances, could result in pricing pressure or otherwise adversely impact our business.

Competition from other financial services firms, such as reduced or zero commissions to attract clients or trading volume, direct-to-investor online financial services, including so-called “robo” advice, wealth management services augmented by artificial intelligence,

or higher deposit rates to attract client cash balances, could result in pricing pressure or otherwise adversely impact our business.

The decrease in revenue that could result from such an event could have a material adverse effect on our business.

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• subject to oversight by the DOL relative to its servicing of retirement plan accounts subject to ERISA and the Code.

In addition, another subsidiary, LPL Enterprise, is an introducing broker-dealer to LPL Financial.

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.

LPL Enterprise is:

• registered as an introducing broker-dealer with the SEC, each of the 50 states, the District of Columbia, Puerto Rico and the U.S.

In March 2025, LPL Holdings, Inc.

entered into a definitive purchase agreement to acquire Commonwealth.

The transaction closed on August 1, 2025, and, as a result, Commonwealth’s broker-dealer subsidiary, CES, became an indirect wholly owned subsidiary of LPL Holdings, Inc.

and an affiliate of LPL Financial and LPL Enterprise.

Following receipt of FINRA regulatory approval for integration, LPL Holdings, Inc.

will convert assets and transfer registered representative licenses from CES to LPL Financial, which is expected to occur in the fourth quarter of 2026.

Following conversion, the broker-dealer and RIA operations of Commonwealth will be wound down.

Both CES and LPL Enterprise are:

• registered as introducing broker-dealers with the SEC, each of the 50 states, the District of Columbia, Puerto Rico and the U.S.

Virgin Islands;

• registered as an investment adviser with the SEC;

• a member of FINRA;

• subject to oversight by the DOL relative to its servicing of retirement plan accounts subject to ERISA and the Code.

The primary SRO of LPL Financial’s and LPL Enterprise’s broker-dealer activity is FINRA, and the primary regulator of LPL Financial’s and LPL Enterprise’s investment advisory activity is the SEC.

LPL Financial and LPL Enterprise are also subject to state laws, including state “blue sky” laws, and the rules of the Municipal Securities Rulemaking Board for its municipal securities activities.

• registered as investment advisers with the SEC;

• members of FINRA;

• subject to oversight by the DOL relative to their servicing of retirement plan accounts subject to ERISA and the Code.

The primary SRO of LPL Financial’s, LPL Enterprise’s and Commonwealth’s broker-dealer activity is FINRA, and the primary regulator of LPL Financial’s, LPL Enterprise’s and Commonwealth’s investment advisory activity is the SEC.

LPL Financial, LPL Enterprise and Commonwealth are also subject to state laws, including state “blue sky” laws, and the rules of the Municipal Securities Rulemaking Board for its municipal securities activities.

The CFTC has designated the NFA as LPL Financial’s primary regulator for futures and commodities trading activities.

The SEC, FINRA, DOL, CFTC, NFA, OCC, various securities and futures exchanges and other United States and state-level governmental or regulatory authorities continuously review legislative and regulatory initiatives and may

adopt new or revised laws, regulations or interpretations.

There can be no assurance that other federal or state agencies will not attempt to further regulate our business or that specific interactions with foreign countries or foreign nationals will not trigger regulation in non-U.S.

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We cannot assure you that our systems and procedures are, or have been, effective in complying with all applicable laws, rules and regulations and interpretations.

In particular, the diversity of information security environments in which our services are offered makes it difficult to ensure a uniformly robust level of compliance.

In particular, the diversity of information security regulatory environments in which our services are offered makes it difficult to ensure a uniformly robust level of compliance.

Regulators have in the past raised, and may in the future raise, concerns with respect to the quality, consistency or oversight of certain aspects of our compliance systems and programs and our past or future compliance with applicable laws, rules and regulations.

As of the date of this Annual Report on Form 10-K, we have a number of pending regulatory matters.

For example, in August 2024, the Company received a request for information from the SEC regarding certain elements of the Company’s cash management program for corporate advisory accounts, which based on the nature of the request, we believe is part of an industry-wide inquiry.

The Company has been cooperating with the request.

For more information, see Note 14 - Commitments and Contingencies within the notes to the consolidated financial statements in this Annual Report on Form 10-K.

Violations of laws, rules or regulations and settlements in respect of alleged violations have in the past resulted in, and could in the future result in, legal liability, censures, penalties and fines, disgorgement of profits, restitution to customers, remediation, the issuance of cease-and-desist orders or injunctive or other equitable relief against us, which individually or in the aggregate could negatively impact our financial results or adversely affect our ability to attract or retain financial advisors and institutions.

In August 2024, the Company received a request for information from the SEC regarding certain elements of the Company’s cash management program for corporate advisory accounts.

On January 23, 2026, the SEC informed us that it had concluded its investigation and did not intend to recommend an enforcement action.

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.

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This includes overlapping state and federal rules and guidance that impose requirements on varying segments of our business, such as interpretations regarding standards of care.

For example, the North American Securities Administrators Association (“NASAA”) has proposed a model conduct rule for broker-dealers for state securities regulators to review and propose for adoption as a statute.

To the extent any state adopts such a rule and in the event the rule differs from the federal standard, we would be subject to various standards of care throughout multiple jurisdictions.

These developments could negatively impact our results, including by increasing our expenditures related to legal, compliance, and information technology and could result in other costs, including greater risks of client lawsuits and enforcement activity by regulators.

These changes may also affect the array of

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

These changes may also affect the array of products and services we offer to clients and the compensation that we and our advisors receive in connection with such products and services.

It is unclear how and whether other regulators, including the SEC, FINRA, DOL, banking regulators and other state securities and insurance regulators may respond to, or enforce elements of, these new regulations, or develop their own similar laws and regulations.

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The business activities that we may conduct are limited by various regulatory agencies.

Our membership agreement with FINRA may be amended by application to include additional business activities, as it was in 2024.

Our membership agreement with FINRA may be amended by application to include additional business activities or a material change in business operations, as it was in 2024.

This application process is time-consuming and may not be successful.

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In addition, the SEC, FINRA, CFTC, OCC and NFA have extensive rules and regulations with respect to capital requirements.

Our registered broker-dealer subsidiaries, including LPL Financial, are subject to Rule 15c3-1 (“Net Capital Rule”) under the Exchange Act, and related requirements of SROs.

Our registered broker-dealer subsidiaries, including LPL Financial, are subject to the Uniform Net Capital Rule under the Exchange Act, and related requirements of SROs.

The CFTC and NFA also impose net capital requirements.

The Net Capital Rule specifies minimum capital requirements that are intended to ensure the general soundness and liquidity of broker-dealers.

Because our holding companies are not registered broker-

dealers, they are not subject to the Net Capital Rule.

The Uniform Net Capital Rule specifies minimum capital requirements that are intended to ensure the general soundness and liquidity of broker-dealers.

Because our holding companies are not registered broker-dealers, they are not subject to the Uniform Net Capital Rule.

However, the ability of our holding companies to withdraw capital from our broker-dealer subsidiaries, including LPL Financial, could be restricted in the event they experience a net capital shortfall, which in turn could limit our ability to repay debt, redeem or repurchase shares of our outstanding stock or pay dividends.

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Even if no interruption occurs, these updates may not result in the benefits to our systems that we contemplate.

For example, we are upgrading our technology systems in connection with our current and future business development opportunities, pending acquisitions, investments and strategic relationships.

For example, we are upgrading our technology systems in connection with our current and future business development opportunities, acquisitions, investments and strategic relationships.

These efforts involve a significant investment of financial and personnel resources and we cannot guarantee that these upgrades or the investments that support them will be completed successfully, on time or at all, or that they will not result in interruptions to the availability of our technology systems or business operations.

More generally, our failure to upgrade our systems successfully could have a material adverse effect on our business, financial condition and results of operations, as well as our

ability to achieve our growth objectives.

More generally, our failure to upgrade our systems successfully could have a material adverse effect on our business, financial condition and results of operations, as well as our ability to achieve our growth objectives.

For more information about risks related to upgrading our technology platform, see “Failure to maintain technological capabilities, flaws in existing technology, difficulties in upgrading our technology platform or the introduction of a competitive platform could have material adverse effect on our business” below.

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Although we take protective measures and endeavor to strengthen the security and resiliency of these systems, our computer systems, software and networks are vulnerable to information breaches, unauthorized access, human error, computer viruses, denial-of-service attacks, malicious code, spam attacks, phishing, ransomware or other forms of social engineering and other events that could impact the security, reliability, confidentiality, integrity and availability of our systems (collectively, “Security Events”).

To the extent third parties, such as product sponsors, also retain similarly sensitive information about our advisors, their clients or our employees, their systems may face similar vulnerabilities that could result in Security Events for us.

To the extent third parties, such as product sponsors and financial institutions, also retain similarly sensitive information about our advisors, their clients or our employees, their systems may face similar vulnerabilities that could result in Security Events for us.

We are not able to protect against these Security Events completely given the rapid evolution of new vulnerabilities, the complex and distributed nature of our systems, our interdependence on the systems of other companies and the increased sophistication of potential attack vectors and methods against our systems.

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If one or more of these Security Events occur, they could jeopardize our own, our advisors’ or their clients’, or our counterparties’ confidential and other proprietary information processed, stored in and transmitted through our computer systems and networks, or otherwise cause interruptions or malfunctions in our own, our advisors’ or their clients’, our counterparties’, or third parties’ operations.

As a result, we could be subject to litigation, client loss, reputational harm, regulatory sanctions and financial losses that are either not insured or are not fully covered through any insurance we maintain.

If any person, including any of our employees or advisors, negligently disregards or intentionally breaches our established controls with respect to confidential client data or other confidential information, or otherwise mismanages or misappropriates that data or information, we could also be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.

As a result, we could be

subject to litigation, client loss, reputational harm, regulatory sanctions and financial losses that are either not insured or are not fully covered through any insurance we maintain.

If any person, including any of our employees or advisors, negligently disregards or intentionally breaches our established controls with respect to confidential client data or other confidential information or non-public personal information, or otherwise mismanages or misappropriates that data or information, we could also be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.

We currently, and may in the future use, develop and incorporate systems and tools that leverage artificial intelligence and other machine learning and large language models, including generative artificial intelligence (collectively, “AI”), within our technology platform and services.

AI presents risks and challenges that could adversely impact our business.

The development, adoption, and application of AI technologies are still in their early stages, and ineffective or inadequate AI governance, development or deployment practices by us or by third-party developers or vendors could result in unintended consequences.

For example, AI algorithms that we use may be flawed or may be based on datasets that are biased or insufficient.

In addition, any latency, disruption, or failure in our AI and related systems or infrastructure could result in delays or errors in our products and services.

The use of AI could exacerbate existing risks or create new and unpredictable risks to our business, which could impact the markets in which we operate or subject us to increased competition and regulation.

The development, adoption and application of AI technologies are still in their early stages, and ineffective or inadequate AI governance, development or deployment practices by us or by third-party developers or vendors could result in unintended consequences, and may not yield the benefits, insights and efficiencies that we or others anticipate.

For example, AI algorithms that we use may be flawed or may be based on datasets that are biased or insufficient and could produce inaccurate, incomplete, or ineffective results, any of which could result in operational and reputational harm.

While we aim to develop and use AI responsibly and attempt to identify and mitigate technological, ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving such issues before they arise.

Any latency, disruption, or failure in our AI and related systems or infrastructure could result in delays or errors in our products and services that rely on AI.

Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs.

There also may be real or perceived social harm, unfairness, or other outcomes that undermine public confidence in the use and deployment of AI.

Further, our external third-party service providers may fail to use AI appropriately.

Although we conduct diligence on our external service providers and, when appropriate, seek contractual protections from them to mitigate AI-related risks, we are not able to control how our advisors or external service providers develop, maintain or use their AI systems, nor do we have control over their use or disclosure of data with such AI systems, which can include material non-public information or personal identifiable information.

Any of the foregoing may result in harm to our business, results of operations, or reputation.

The legal and regulatory landscape surrounding AI is rapidly evolving and remains uncertain, including in the areas of intellectual property, cybersecurity, privacy and data protection.

The legal and regulatory landscape surrounding AI is rapidly evolving and remains uncertain, including in the areas of intellectual property, cybersecurity, privacy and data protection, as well as consumer protection, competition and equal opportunity laws.

For example, there is uncertainty around the validity and enforceability of intellectual property rights related to use, development and deployment of AI.

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As part of our normal operations, we maintain and transmit confidential information about clients of our advisors, our advisors and our employees, as well as proprietary information relating to our business operations.

The risks related to transmitting data and using service providers outside of and storing or processing data within our network are increasing based on escalating and complex malicious cyber activity, including activity that originates outside of the United States from criminal elements and hostile nation-states.

Cybersecurity requires ongoing investment and diligence against evolving threats and is subject to federal and state regulation relating to the protection of confidential information.

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We rely on our advisors and employees to comply with our policies and procedures and to implement controls to safeguard confidential data, but we remain exposed to the risk of malicious or negligent acts by insiders.

The failure of our advisors and employees to comply with such policies and procedures, either intentionally or unintentionally, could result in the loss or wrongful use of their clients’ confidential information or other sensitive information, as well as result in aspects of our technology systems malfunctioning, being disabled or failing to work as designed.

The failure of our advisors and employees to comply with such policies and procedures, either intentionally or unintentionally, could result in the loss or wrongful use of their clients’ confidential information or other sensitive information, as well as infiltration of our systems, system failures or outages or loss of confidential or proprietary information.

In addition, even if we and our advisors comply with our policies and procedures, persons who circumvent security measures or bypass authentication controls could infiltrate or damage our systems or facilities and wrongfully use our confidential information or clients’ confidential information or cause interruptions or malfunctions in our operations.

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As malicious cyber activity becomes more complex and escalates, including activity that originates outside of the United States, the risks we face relating to transmission of data and our use of service providers outside of our network, as well as the storing or processing of data within our network, intensify.

While we maintain cyber liability

insurance, this insurance does not cover certain types of potential losses and, for covered losses, may not be sufficient in amount to protect us against all such losses.

While we maintain cyber liability insurance, this insurance does not cover certain types of potential losses and, for covered losses, may not be sufficient in amount to protect us against all such losses.

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.

We cannot be certain that our systems and networks will not be subject to successful attacks, despite the measures we have taken and may take in the future to address and mitigate cybersecurity, privacy and technology risks.

Additionally, in the course of operations, we rely upon the technology systems of, and share sensitive proprietary information and personal data with, vendors, third parties and other financial institutions.

Storing data off-shore can lead to increased cybersecurity risks, as international jurisdictions have varying cybersecurity laws, regulations and practices which can result in lower security standards.

Additionally, data being stored off-shore can mean that we and the third parties have reduced visibility and control over the security of the data.

Transfers of personal data internationally can also trigger certain data protection legal requirements, including to ensure that safeguards are in place in relation to such transfers.

We also rely upon software and data feeds from various third parties.

Although we have a third party risk management program and conduct due diligence regarding cybersecurity and data protection practices before integrating our systems or sharing sensitive data with third-party vendors, this due diligence may not uncover administrative, technical or electronic gaps or flaws in their processes or systems.

Although we have a third-party risk management program and conduct due diligence regarding cybersecurity and data protection

practices before integrating our systems or sharing sensitive data with third-party vendors, this due diligence may not uncover administrative, technical or electronic gaps or flaws in their processes or systems.

In the past, we and third parties on whose systems we rely have experienced Security Events that have resulted in the temporary interruption of our operations, breach notification costs and reputational harm with regulators, current and potential advisors, and advisors’ clients, and we may experience similar or more significant events in the future.

Future Security Events involving individual and regulatory notifications could lead to litigation involving other financial institutions, class actions, regulatory investigations or other harm.

Security Events within the financial services industry are increasing, and threat actors continue to find novel ways to attack technology platforms and services.

Future Security Events involving individual and regulatory notifications could lead to litigation involving other financial institutions, class actions, regulatory investigations or other harm, both financial and reputational.

Security Events within the financial services industry are increasing, and threat actors continue to find novel ways to attack technology platforms and services, including our information systems and those of our advisors and third-party vendors.

The use of AI by malicious third parties may also increase the sophistication and effectiveness of cybersecurity attacks that we experience in the future.

In light of the diversity of our advisors’ security environments and the increasing sophistication of malicious actors, a Security Event could occur and persist for an extended period of time without detection.

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Many aspects of our business are subject to comprehensive legal requirements concerning the collection, use and sharing of personal information, including advisor, client and employee information.

This includes rules adopted pursuant to the Gramm-Leach-Bliley Act and an ever-increasing number of state laws and regulations, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act.

Similar laws are in force in several other states, and other such laws will go into force over the next few years.

Similar laws are in force in several other states, and other such laws are expected to go into force over the next few years.

This also includes the DOJ’s Data Security program that restricts, and in some cases prohibits, access by certain countries of concern or foreign entities to certain data, even if those data are de-identified, anonymized, or encrypted.

We continue our efforts to safeguard the personal information entrusted to us in accordance with applicable law and our internal data protection policies, including taking steps to reduce the potential for the improper use or disclosure of personal information.

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The evolving patchwork of differing state and federal privacy and data security laws increases the cost and complexity of operating our business and our exposure to regulatory investigations, enforcement, fines, and penalties, any of which could negatively impact our business and operations.

Failure to comply with these obligations could result in damage to our reputation and legal liability, censures, penalties and fines, disgorgement of profits, restitution to customers, remediation, the issuance of cease-and-desist orders, or injunctive or other equitable relief against us, which individually or in the aggregate could negatively impact our financial results or adversely affect our ability to attract

or retain financial advisors and institutions.

Failure to comply with these obligations could result in damage to our reputation and legal liability, censures, penalties and fines, disgorgement of profits, restitution to customers, remediation, the issuance of cease-and-desist orders, or injunctive or other equitable relief against us, as well as the need to continually invest significant management time and expense to improve compliance, which individually or in the aggregate could negatively impact our financial results or adversely affect our ability to 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.

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Our Board declared quarterly cash dividends on our outstanding common stock in 2025 and has authorized us to repurchase shares of the Company’s issued and outstanding shares of common stock;

however, the Company paused share repurchases in early 2025 as a result of the Commonwealth acquisition.

The declaration and payment of any future quarterly cash dividend or any additional repurchase authorizations will be subject to the Board’s continuing determination that the declaration of future dividends or repurchase of our shares are in the best interests of our stockholders and are in compliance with our Credit Agreement, the Indentures and applicable law.

Such determinations will depend upon a number of factors that the Board deems relevant, including future earnings,

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.

Such determinations will depend upon a number of factors that the Board deems relevant, including future earnings, 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.

The future payment of dividends or repurchases of shares will also depend on our ability to generate earnings and cash flows.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors