1397911--3/31/2008--LPL_Investment_Holdings

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{debt, indebtedness, cash}

{personnel, key, retain}

{financial, litigation, operation}

{loss, insurance, financial}

{system, service, information}

{regulation, change, law}

{provision, law, control}

{condition, economic, financial}

{operation, natural, condition}

{stock, price, operating}

{regulation, government, change}

{cost, contract, operation}

{competitive, industry, competition}

{customer, product, revenue}

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{acquisition, growth, future}

We depend on our ability to attract and retain experienced and productive IFAs and Financial Institutions. We depend on FAs' ability to grow their businesses. The performance of our business is correlated with the economy and financial markets, and a slowdown or downturn in the economy or financial markets could adversely affect our business, results of operations, cash flows or financial condition. Because clients can withdraw their assets on short notice, poor performance of the investment products and services may have a material adverse effect on our business, results of operations, cash flows or financial condition. Our business is competitive and, if we are unable to compete effectively, our business, results of operations, cash flows or financial condition may be adversely affected. Our business is highly regulated and the failure to comply with applicable regulations could result in penalties, temporary or permanent prohibitions on our activities and reputational harm, any of which could have a material adverse effect on our business, results of operations, cash flows or financial condition. We are subject to various regulatory capital requirements, which, if not complied with, could result in the restriction of the ongoing conduct, growth, or even liquidation of parts of our business. Our business is subject to risks related to litigation and arbitration actions. Our errors and omissions insurance coverage may be inadequate or expensive. Misconduct and errors by our employees and our IFAs could harm our business, results of operations, cash flows or financial condition. The securities settlement process exposes us to risks that may impact our liquidity and profitability. Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments. Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types or risks. If the counterparties to the derivative instruments we use to hedge our business risks default, we may be exposed to risks we had sought to mitigate, which could adversely affect our results of operations, cash flows or financial condition. Our networks may be vulnerable to security risks. Failure to maintain technological capabilities, flaws in existing technology, difficulties in upgrading our technology platform, or the introduction of a competitive platform could have a material adverse effect on our business, results of operations, cash flows or financial condition. Disruption of our disaster recovery plans and procedures in the event of a catastrophe could adversely affect our business, results of operations, cash flows or financial condition. Our future success depends on our ability to recruit and retain qualified employees. We depend on key senior management personnel. A loss of our marketing relationships with a variety of leading manufacturers of investment products could harm our business, results of operations, cash flows or financial condition. A change in our clearing service bureau relationships could adversely affect our business, results of operations, cash flows or financial condition. Changes in U.S. federal income tax law could make some of the products distributed by our IFAs less attractive to clients. Failure to comply with ERISA regulations could result in penalties against us. Our substantial indebtedness could adversely affect our financial health and may limit our ability to use debt to fund future capital needs. We will be able to incur additional indebtedness or other obligations in the future, which would exacerbate the risks discussed above. Restrictions under certain of our indebtednesses may prevent us from taking actions that we believe would be in the best interest of our business. The Majority Holders control us and may have conflicts of interest with us. Our performance is affected by many factors, some of which are beyond our control. Provisions of our senior secured credit agreement could discourage an acquisition of us by a third party. Anti-takeover provisions of our certificate of incorporation and bylaws may reduce the likelihood of any potential change of control or unsolicited acquisition proposal that we might consider favorable.

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1397911--3/31/2008--LPL_Investment_Holdings_Inc.