LPL Financial has unveiled a new mutual fund platform designed to adhere to the fiduciary rule, though the rule’s uncertain fate poses an impact on a key aspect of the plan.
The platform would feature load-waived shares in more than 1,500 funds from 20 sponsors, the country’s largest independent broker-dealer announced this week. LPL also plans to limit upfront commissions to 3.5% and set trailing fees at 0.25% on the platform, which is slated to launch early next year.
The lower, standardized fees reflect the mandate on firms to rein in conflicts of interest under the Department of Labor’s rule and its best interest contract exemption, which governs commissions on retirement clients’ accounts.
The rule has upended offerings throughout the industry, particularly with respect to mutual funds. President Trump’s administration may try to rescind or revise the rule before its full implementation Jan. 1, but LPL joined other firms in changing its product lineup to comply with it.
“At launch, [the platform] will be a price-competitive solution that not only preserves investor choice — but amplifies it,” according to a company memo to advisers obtained by Financial Planning.
“As you know, other financial firms have limited or even fully removed brokerage options for retirement investors. But when brokerage is in the best interest of your client, we’re providing a solution.”
WHO’S ON THE PLATFORM?
Company executives expect the platform to keep more than 80% of LPL’s mutual fund products for brokerage clients while eliminating trading fees and annual account fees, according to…