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July 13, 2017 at 11:14 AM
LPL Financial’s fiduciary-friendly platform for affiliated advisors is still about six months from being launched, but the independent broker-dealer shared the names of its 20 mutual fund partners on Thursday.
The mutual-fund-only platform, or MFO, does not include fund behemoth Vanguard. Nor does bond shop Pimco make the list. (ETFs are not part of the new platform, but are sold via general brokerage account and fee-based accounts.)
It does offer clients reduced fees, while advisors get standardizing compensation. The no-load funds do, though, bring advisors upfront onboarding commissions of up to 3.5% and a “consistent” trail of up to 0.25%.
The onboarding charge, though, is waived for investors already holding assets in these funds. About of 80% of client assets in mutual funds now on the brokerage platform are invested in these 20 fund families, according to a memo sent out to advisors.
LPL also says investors can easily move between fund families, rather than sticking with a particular one year after year. Plus, clients may get discounts based on the total amount of brokerage assets invested in MFO-eligible mutual funds. The IBD has also eliminated certain annual account and trading fees.
