v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
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, 2026 or 2025.
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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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, 2026TypeValuation TechniquesUnobservable InputsRange
$105,432 Contingent Consideration
Monte-Carlo Simulation Model
Forecasted Growth Rates2.5 %-14.4 %
Discount Rate11.0 %-14.5 %
Equivalency Rate(1)
4.6 %-5.1 %
2,200 Contingent ConsiderationProbability Weighted Expected Return MethodConversion Rate— %-100.0 %
$107,632 
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(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, 2025TypeValuation TechniquesUnobservable InputsRange
$115,464 Contingent Consideration
Monte-Carlo Simulation Model
Forecasted Growth Rates1.3 %-26.0 %
Discount Rate12.0 %-17.9 %
Equivalency Rate(1)
4.7 %-5.9 %
8,574 
Contingent Consideration
Probability Weighted Expected Return Method
Equivalency Rate(1)
5.3 %-5.3 %
Conversion Rate
— %-100.0 %
$124,038 
____________________
(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,
2026202520262025
Balance - Beginning of period
$134,277 $161,372 $124,038 $196,898 
Additions and purchase accounting adjustments
9,844 (9,374)26,599 (9,245)
Payments
(33,695)(27,458)(47,734)(69,707)
Fair value adjustments
(2,794)309 4,729 6,903 
Balance - End of period
$107,632 $124,849 $107,632 $124,849 
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, 2026Level 1Level 2Level 3Total
Assets
Cash equivalents$55,840 $— $— $55,840 
Cash equivalents segregated under federal or other regulations523,157 — — 523,157 
Restricted cash
138,459 — — 138,459 
Investment securities — trading:
U.S. treasury obligations140,031 — — 140,031 
Mutual funds45,194 — — 45,194 
Equity securities2,742 — — 2,742 
Debt securities— 39 — 39 
Total investment securities — trading187,967 39 — 188,006 
Other assets:
Deferred compensation plan1,247,873 — — 1,247,873 
Fractional shares — investment(1)
421,762 — — 421,762 
Other investments— 1,926 — 1,926 
Total other assets:1,669,635 1,926 — 1,671,561 
Total assets at fair value$2,575,058 $1,965 $— $2,577,023 
Liabilities
Other liabilities:
Securities sold, but not yet purchased:
Equity securities$42 $— $— $42 
Debt securities
— 250 — 250 
Total securities sold, but not yet purchased42 250 — 292 
Fractional shares — repurchase obligation(1)
421,762 — — 421,762 
Contingent consideration
— — 107,632 107,632 
Total other liabilities421,804 250 107,632 529,686 
Total liabilities at fair value$421,804 $250 $107,632 $529,686 
____________________
(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, 2025Level 1Level 2Level 3Total
Assets
Cash equivalents$104,377 $— $— $104,377 
Cash equivalents segregated under federal or other regulations821,334 — — 821,334 
Restricted cash
127,585 — — 127,585 
Investment securities — trading:
U.S. treasury obligations40,029 — — 40,029 
Mutual funds33,559 — — 33,559 
Equity securities2,505 — — 2,505 
Debt securities— 15 — 15 
Total investment securities — trading76,093 15 — 76,108 
Other assets:
Deferred compensation plan1,097,514 — — 1,097,514 
Fractional shares — investment(1)
371,683 — — 371,683 
Other investments— 2,423 — 2,423 
Total other assets1,469,197 2,423 — 1,471,620 
Total assets at fair value$2,598,586 $2,438 $— $2,601,024 
Liabilities
Other liabilities:
Securities sold, but not yet purchased:
Equity securities$174 $— $— $174 
Total securities sold, but not yet purchased174 — — 174 
Fractional shares — repurchase obligation(1)
371,683 — — 371,683 
    Contingent consideration
— — 124,038 124,038 
Total other liabilities371,857 — 124,038 495,895 
Total liabilities at fair value$371,857 $— $124,038 $495,895 
____________________
(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, 2026Carrying ValueLevel 1Level 2Level 3Total Fair Value
Assets
Cash$1,219,850 $1,219,850 $— $— $1,219,850 
Cash segregated under federal or other regulations897,010 897,010 — — 897,010 
Restricted cash94,430 94,430 — — 94,430 
Receivables from clients, net994,139 — 994,139 — 994,139 
Receivables from brokers, dealers and clearing organizations244,302 — 244,302 — 244,302 
Advisor repayable loans, net(1)
387,626 — — 310,764 310,764 
Other receivables, net1,427,985 — 1,427,985 — 1,427,985 
Investment securities — held-to-maturity securities15,493 — 15,442 — 15,442 
Other assets:
Securities borrowed3,506 — 3,506 — 3,506 
Deferred compensation plan(2)
13,481 13,481 — — 13,481 
Other investments(3)
7,259 — 7,259 — 7,259 
Total other assets24,246 13,481 10,765 — 24,246 
Liabilities
Client payables$2,256,333 $— $2,256,333 $— $2,256,333 
Payables to brokers, dealers and clearing organizations599,397 — 599,397 — 599,397 
Corporate debt and other borrowings, net7,460,510 — 7,497,955 — 7,497,955 
December 31, 2025Carrying ValueLevel 1Level 2Level 3Total Fair Value
Assets
Cash$933,001 $933,001 $— $— $933,001 
Cash segregated under federal or other regulations970,730 970,730 — — 970,730 
Restricted cash97,713 97,713 — — 97,713 
Receivables from clients, net803,206 — 803,206 — 803,206 
Receivables from brokers, dealers and clearing organizations70,897 — 70,897 — 70,897 
Advisor repayable loans, net(1)
406,793 — — 335,050 335,050 
Other receivables, net1,203,539 — 1,203,539 — 1,203,539 
Investment securities - held-to-maturity securities15,420 — 15,520 — 15,520 
Other assets:
Deferred compensation plan(2)
10,038 10,038 — — 10,038 
Securities borrowed1,789 — 1,789 — 1,789 
Other investments(3)
7,874 — 7,874 — 7,874 
Total other assets19,701 10,038 9,663 — 19,701 
Liabilities
Client payables$2,308,275 $— $2,308,275 $— $2,308,275 
Payables to brokers, dealers and clearing organizations150,520 — 150,520 — 150,520 
Corporate debt and other borrowings, net7,258,694 — 7,420,447 — 7,420,447 
__________________
(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.