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Portfolio > ETFs

LPL Cuts ETF Fees for RIAs

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LPL Financial CEO Dan Arnold speaks at the firm’s national conference in 2016.

A week after LPL Financial said it would add an employee advisor channel to its operations, the independent broker-dealer said it is cutting the transaction costs of some ETFs on its RIA platforms to $4.95 from $9 later this year.

“With Fidelity and Schwab at $4.95, and TD Ameritrade at $6.95 … , LPL is basically saying, ‘Hey, you are an RIA, come and custody with us … ,” said recruiter Jon Henschen. “This can be seen an another option for RIAs looking for similar pricing.”

The move also illustrates how LPL “is making a larger net to capture assets” from areas that it has not fully tapped, Henschen adds, such as adding wirehouse advisors with its employee model and now more RIA assets. “Pricing is a good way to do this, and $4.95 is attractive,” he said.  

Along with Fidelity and Schwab, TD Ameritrade Institutional gives RIAs and investors access to a large number of commission-free ETFs.

In June, the number of TD Ameritrade Institutional’s commission-free ETFs will nearly double, jumping to 569 exchange-traded funds from 314; the funds will come from 21 providers and cover about 90 Morningstar categories.

LPL Plans

In the second half of 2019, transaction costs for State Street, Invesco and WisdomTree ETFs will drop to $4.95 from $9 on LPL’s Strategic Asset Management (SAM) and Strategic Wealth Management (SWM) platforms.

The IBD says it is “pursuing similar partnerships with other sponsors.”

“We are committed to helping our advisors thrive in today’s complex and challenging business environment. We can do that by using our scale to provide competitive, industry-leading programs that give advisors choice and flexibility to address the needs of their clients and their business,” according to Rob Pettman, LPL executive vice president, Products and Platforms.

“The firm remains committed to leveraging our scale to invest in advisors’ businesses with price reductions and new capabilities,” Pettman added.

LPL’s SWM platform include a no-transaction fee network of 66 mutual fund firms. In January, the IBD lowered its administrative fee to 8 basis points for advisors with $25 million to $50 million in assets on the SAM platform.


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