v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:    
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
There have been no transfers of assets or liabilities between these fair value measurement classifications during the six months ended June 30, 2025 or 2024.
The Company’s fair value measurements are evaluated within the fair value hierarchy, based on the nature of inputs used to determine the fair value at the measurement date. At June 30, 2025 and December 31, 2024, the Company had the following financial assets and liabilities that are measured at fair value on a recurring basis:
Cash Equivalents — The Company’s cash equivalents primarily include money market funds and U.S. government obligations, which are short term in nature with readily determinable values derived from active markets.
Cash Equivalents Segregated Under Federal or Other Regulations — The Company’s cash equivalents segregated under federal or other regulations include U.S. treasury bills, which are short term in nature with readily determinable values derived from active markets.
Restricted Cash — The Company’s restricted cash is primarily composed of U.S. government obligations and money market funds which are short term in nature with readily determinable values derived from active markets.
Trading Securities and Securities Sold, But Not Yet Purchased — The Company’s trading securities consist of house account model portfolios established and managed for the purpose of benchmarking the performance of its fee-based advisory platforms and temporary positions resulting from the processing of client transactions.
The Company uses prices obtained from independent third-party pricing services to measure the fair value of its trading securities. Prices received from the pricing services are validated when security prices move beyond a certain deviation threshold using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices and review of other relevant market data including implied yields of major categories of securities. In general, these quoted prices are derived from active markets for identical assets or liabilities. When quoted prices in active markets for identical assets and liabilities are not available, the quoted prices are based on similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. For negotiable certificates of deposit and treasury securities, the Company utilizes market-based inputs, including observable market interest rates that correspond to the remaining maturities or the next interest reset dates. At June 30, 2025 and December 31, 2024, the Company did not adjust prices received from the independent third-party pricing services.
Other Assets — The Company’s other assets include: (1) deferred compensation plan assets that are invested in life insurance, money market and other mutual funds, which are actively traded and valued based on quoted market prices; and (2) certain non-traded real estate investment trusts, which are valued using quoted prices for identical or similar securities and other inputs that are observable or can be corroborated by observable market data.
Fractional Shares — The Company’s investment in fractional shares held by customers is reflected in other assets while the related purchase obligation for such shares is reflected in other liabilities. The Company uses prices obtained from independent third-party pricing services to measure the fair value of its investment in fractional shares held by customers and the related repurchase obligation. Prices received from the pricing services are validated when security prices move beyond a certain deviation threshold using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices and review of other relevant market data including implied yields of major categories of securities. At June 30, 2025 and December 31, 2024, the Company did not adjust prices received from the independent third-party pricing services.
Contingent Consideration — The Company measures contingent consideration liabilities at fair value at the acquisition date, as applicable, and thereafter on a recurring basis using unobservable (Level 3) inputs. These contingent consideration liabilities are reflected in other liabilities. See Note 4 - Acquisitions for additional information.
Level 3 Recurring Fair Value Measurements
The Company determines the fair value for its contingent consideration obligations using probability weighted and Monte-Carlo simulation models. Contingent payments are estimated by applying significant unobservable inputs, including forecasted growth rates applied to project future revenue or asset growth, conversion or retention rates, and discount rates which are based on the cost of debt and equity. These projections are measured against the
performance targets specified in each respective acquisition agreement, which may include growth in assets under management, net new assets, asset conversion or retention, or revenue growth. Significant increases or decreases in the Company’s forecasted growth rates over the measurement period or discount rates would result in a higher or lower fair value measurement.
The following tables summarize inputs used in the measurement of contingent consideration (dollars in thousands):
Quantitative Information About Level 3 Fair Value Measurements
June 30, 2025TypeValuation TechniquesUnobservable InputsRange
$106,034 Contingent Consideration
Monte-Carlo Simulation Model
Forecasted Growth Rates3.0 %-26.0 %
Discount Rate12.0 %-19.1 %
Equivalency Rate(1)
4.8 %-6.1 %
18,815 
Contingent Consideration
Probability Weighted Expected Return Method
Equivalency Rate(1)
5.3 %-5.3 %
Conversion Rate
— %-100.0 %
$124,849 
____________________
(1)Equivalency rate is defined as the prevailing market interest rate used to discount future payments.
Quantitative Information About Level 3 Fair Value Measurements
December 31, 2024TypeValuation TechniquesUnobservable InputsRange
$170,343 Contingent Consideration
Monte-Carlo Simulation Model
Forecasted Growth Rates2.0 %-29.5 %
Discount Rate10.5 %-18.0 %
Equivalency Rate(1)
4.9 %-5.8 %
26,555 
Contingent Consideration
Probability Weighted Expected Return Method
Equivalency Rate(1)
5.7 %-5.7 %
Conversion Rate
— %-100.0 %
$196,898 
____________________
(1)Equivalency rate is defined as the prevailing market interest rate used to discount future payments.

The following table summarizes the changes in fair value for the Company’s Level 3 liabilities during the periods presented (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Balance - Beginning of period
$161,372 $87,262 $196,898 $118,844 
Additions and purchase accounting adjustments
(9,374)20,462 (9,245)40,380 
Payments
(27,458)(2,500)(69,707)(54,000)
Fair value adjustments
309 24,624 6,903 24,624 
Balance - End of period
$124,849 $129,848 $124,849 $129,848 
Recurring Fair Value Measurements
The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):
June 30, 2025Level 1Level 2Level 3Total
Assets    
Cash equivalents$802,440 $— $— $802,440 
Cash equivalents segregated under federal or other regulations647,455 — — 647,455 
Restricted cash
111,713 — — 111,713 
Investment securities — trading:    
U.S. treasury obligations109,419 — — 109,419 
Mutual funds14,900 — — 14,900 
Money market funds123 — — 123 
Equity securities168 — — 168 
Debt securities— 29 — 29 
Total investment securities — trading124,610 29 — 124,639 
Other assets:
Deferred compensation plan956,489 — — 956,489 
Fractional shares — investment(1)
313,399 — — 313,399 
Other investments— 2,313 — 2,313 
Total other assets:1,269,888 2,313 — 1,272,201 
Total assets at fair value$2,956,106 $2,342 $— $2,958,448 
Liabilities    
Other liabilities:
Securities sold, but not yet purchased:    
Equity securities$181 $— $— $181 
Mutual funds
17 — — 17 
Debt securities
— 12 — 12 
Total securities sold, but not yet purchased198 12 — 210 
Fractional shares — repurchase obligation(1)
313,399 — — 313,399 
Contingent consideration
— — 124,849 124,849 
Total other liabilities313,597 12 124,849 438,458 
Total liabilities at fair value$313,597 $12 $124,849 $438,458 
____________________
(1)Investment in and related repurchase obligation for fractional shares resulting from the Company’s dividend reinvestment program (“DRIP”).
The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):
December 31, 2024Level 1Level 2Level 3Total
Assets
Cash equivalents$53,672 $— $— $53,672 
Cash equivalents segregated under federal or other regulations672,164 — — 672,164 
Restricted cash
100,368 — — 100,368 
Investment securities — trading:
Mutual funds13,627 — — 13,627 
U.S. treasury obligations28,511 — — 28,511 
Money market funds110 — — 110 
Equity securities8 — — 8 
Debt securities— 11 — 11 
Total investment securities — trading42,256 11 — 42,267 
Other assets:
Deferred compensation plan856,843 — — 856,843 
Fractional shares — investment(1)
278,683 — — 278,683 
Other investments— 3,989 — 3,989 
Total other assets1,135,526 3,989 — 1,139,515 
Total assets at fair value$2,003,986 $4,000 $— $2,007,986 
Liabilities
Other liabilities:
Securities sold, but not yet purchased:
Equity securities$151 $— $— $151 
Debt Securities
— 18— 18
Total securities sold, but not yet purchased151 18 — 169 
Fractional shares — repurchase obligation(1)
278,683 — — 278,683 
    Contingent consideration
— — 196,898 196,898 
Total other liabilities278,834 18 196,898 475,750 
Total liabilities at fair value$278,834 $18 $196,898 $475,750 
____________________
(1)Investment in and related repurchase obligation for fractional shares resulting from the Company’s DRIP.
Fair Value of Financial Instruments Not Measured at Fair Value
The following tables summarize the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not measured at fair value (in thousands):
June 30, 2025Carrying ValueLevel 1Level 2Level 3Total Fair Value
Assets    
Cash$3,382,897 $3,382,897 $— $— $3,382,897 
Cash segregated under federal or other regulations963,745 963,745 — — 963,745 
Restricted cash4,962 4,962 — — 4,962 
Receivables from clients, net710,463 — 710,463 — 710,463 
Receivables from brokers, dealers and clearing organizations129,490 — 129,490 — 129,490 
Advisor repayable loans, net(1)
374,346 — — 300,384 300,384 
Other receivables, net951,063 — 951,063 — 951,063 
Investment securities — held-to-maturity securities15,323 — 15,395 — 15,395 
Other assets:
Securities borrowed8,146 — 8,146 — 8,146 
Deferred compensation plan(2)
10,404 10,404 — — 10,404 
Other investments(3)
8,332 — 8,332 — 8,332 
Total other assets26,882 10,404 16,478 — 26,882 
Liabilities
Client payables$2,090,520 $— $2,090,520 $— $2,090,520 
Payables to brokers, dealers and clearing organizations273,593 — 273,593 — 273,593 
Corporate debt and other borrowings, net7,175,032 — 7,284,719 — 7,284,719 
December 31, 2024Carrying ValueLevel 1Level 2Level 3Total Fair Value
Assets
Cash$913,407 $913,407 $— $— $913,407 
Cash segregated under federal or other regulations925,085 925,085 — — 925,085 
Restricted cash19,356 19,356 — — 19,356 
Receivables from clients, net633,834 — 633,834 — 633,834 
Receivables from brokers, dealers and clearing organizations76,545 — 76,545 — 76,545 
Advisor repayable loans, net(1)
360,760 — — 281,146 281,146 
Other receivables, net902,777 — 902,777 — 902,777 
Investment securities - held-to-maturity securities15,214 — 15,190 — 15,190 
Other assets:
Deferred compensation plan(2)
8,742 8,742 — — 8,742 
Securities borrowed4,811 — 4,811 — 4,811 
Other investments(3)
7,706 — 7,706 — 7,706 
Total other assets21,259 8,742 12,517 — 21,259 
Liabilities
Client payables$1,898,665 $— $1,898,665 $— $1,898,665 
Payables to brokers, dealers and clearing organizations129,228 — 129,228 — 129,228 
Corporate debt and other borrowings, net5,494,724 — 5,480,389 — 5,480,389 
__________________
(1)Includes repayable loans and forgivable loans which have converted to repayable upon advisor termination or change in agreed upon terms.
(2)Includes cash balances awaiting investment or distribution to plan participants.
(3)Other investments include Depository Trust Company common shares and Federal Reserve stock.