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LPL Rolls Out Mutual Fund-Only Platform

By Alex Padalka July 14, 2017

As brokerages adjust to the Department of Labor’s fiduciary rule, LPL Financial has released details on a mutual fund-only platform aimed at cutting fees for investors in brokerage accounts and standardizing compensation for its advisors.

The platform will include more than 1,500 mutual funds from 20 fund companies, including American Funds, BlackRock, Goldman Sachs Asset Management, Invesco, JPMorgan Asset Management, OppenheimerFunds and Putnam Investments, according to a press release from LPL. The fund firms were chosen based on the quality of their fund offerings as well as their popularity among LPL advisors, the company says in the press release. Notably missing from the list are funds from Vanguard.

The mutual fund-only platform will set a maximum onboarding commission of 3.5% plus a 0.25% trailing fee, with discounts available to investors based on brokerage assets with LPL, according to the press release. Furthermore, LPL brokerage clients who own mutual funds approved for the platform will be able to transfer them into the new platform without paying the onboarding fee, the firm says. The platform also does away with some trading and annual account fees, the firm says, without offering more detail.

The new platform will become available to LPL’s advisors in early 2018, with beta-testing scheduled for later this year with a small set of advisors, according to LPL. The company’s goal with the platform is “to preserve choice for investors while managing the evolving regulatory environment,” said Rob Pettman, the company’s executive vice president in product and platform management.

The DOL’s fiduciary rule, which purports to force retirement account advisors to put clients’ interest first while reducing conflicts of interest, went into partial effect last month. But the rule is currently under review and faces calls for a repeal from GOP lawmakers and industry groups.