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More LPL FAs Can Now Serve as 401(k) Fiduciaries

August 30, 2018

LPL Financial is making it easier for more advisors to be eligible to manage 401(k) plans as fiduciaries, InvestmentNews writes.

Brokers who want to be fiduciaries on 401(k)s will still need to have a designation and internal training and use LPL’s software suite or an approved alternative, Christina Marschinke, LPL’s senior vice president of retirement plan services, tells the publication.

But at the end of July, the company removed several requirements for joining LPL’s fiduciary 401(k) group, which currently has about 800 advisors, according to InvestmentNews.

To serve as a fiduciary, LPL’s brokers will no longer have to work with at least five defined-contribution plans, oversee a minimum of $5 million in defined-contribution assets and have at least five years of experience, the publication writes.

"We have about 6,000 advisors at LPL who do plan business in some way, shape or form," Marschinke tells InvestmentNews. "For those who wouldn’t have qualified for [the firm’s fiduciary 401(k) group] but wanted to engage in a deeper relationship with their client, there were not a lot of options."

Marschinke declined to tell the publication how many advisors have joined the group but says there has been an uptick.

LPL isn’t aiming at a particular growth rate for the program, she says, according to InvestmentNews. Marschinke also tells the publication the firm doesn’t intend to focus any less on retirement plan specialists in favor of generalists.

LPL’s plans to expand the number of advisors who can service 401(k)s comes more than a year after Merrill Lynch and Morgan Stanley took similar steps.

The wirehouses’ expansion of eligibility was in part aimed at helping its brokers servicing 401(k) plans under the Department of Labor’s fiduciary rule -- the Obama-era regulation that purported to require retirement account advisors to put clients’ interests first which was officially vacated this summer. Industry observers tell InvestmentNews LPL’s move is smart regardless, as the retirement market moves more toward a fiduciary focus.

By Alex Padalka
  • To read the Investment News article cited in this story, click here.