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Pershing Launches ETFs, Mutual Funds to Help Reps Comply With Fiduciary Rule

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Pershing is joining other broker-dealers in launching mutual fund and exchange-traded fund solutions that not only offer a lower minimum balance, but allow registered reps looking to transition to a fee-based advisory model to meet requirements under the Department of Labor’s fiduciary rule.  

Pershing LLC, a BNY Mellon company, said Monday that it has begun offering through its affiliate Lockwood Advisors Inc. the Lockwood WealthStart Portfolios, solutions for emerging and mass affluent investors, along with new solutions provided by third-party providers. Both feature a diverse range of asset allocation strategies and a minimum balance of $10,000.

The portfolios include asset allocation strategies targeted at investors with varying risk profiles, and can be accessed through diversified risk-based model portfolios from some of the industry’s leading firms, including Lockwood.

“These flexible mutual fund and ETF solutions demonstrate our ongoing commitment to providing financial professionals with the tools they need to navigate the evolving regulatory landscape and grow their business,” said Joel Hempel, Lockwood’s chief operating officer, in a statement. “They may also assist registered reps who are considering a transition from a commission-based brokerage model to fee-based advisory relationships.”

Pershing says the new offering is fully integrated into Pershing’s flagship NetX360 professional platform, and advisors can access them through Lockwood’s turnkey managed account solution, Managed360, or by using Pershing’s managed investments platform.

“Emerging and mass-affluent investors can now have greater access to professionally managed investment solutions,” said Hempel. “These investors represent a large, often underserved market. By offering a suite of diversified risk-based portfolios to this segment, advisors and registered reps can serve new clients and take advantage of cross-generational opportunities.”

Lockwood said that it will continue to evaluate managers to participate in its third-party offerings “to provide more opportunity for financial professionals to grow their business and for investors to accumulate wealth.”

Pershing is not the only firm with new offerings aimed at DOL fiduciary rule compliance.

Mark Casady, chairman and CEO of San Diego-based LPL Financial, said in late August that as part of the largest independent broker-dealer’s “work on the DOL rule, we are planning to introduce the mutual fund-only brokerage account.” LPL said that the new fiduciary standard creates a “heightened need to supervise and surveil all business done in connection with our broker-dealer.”

LPL said that its new type of account, to be offered in the first quarter of 2017, “delivers cost benefits of direct business but with the ability to supervise that comes with LPL custody,” by having no IRA custodial fees or trading costs, an upload charge of 3% to 3.5% with a trail payment and is set to include a selection of products offered by mutual fund families.

— Check out Will Smith’s 8 Life Lessons for Advisors on ThinkAdvisor.