LPL Financial LLC
expects 20 big fund firms to be part of its new mini-mart, which will launch
next year. Today Rob Pettman
, LPL executive and Vice President of product and platform management, disclosed
details of its "Mutual Fund Only (MFO)" platform. The platform is expected to be available to LPL advisors and institutions in early 2018. It is currently being tested with each fund firm and will be beta-tested with a group of advisors later this year.
The 20 fund companies that will be available on LPL's MFO platform when it launches are: AB
(formerly Alliance Bernstein), American Century
, American Funds
, Ameriprise's Columbia Threadneedle
, Eaton Vance Investment Managers
, Fidelity Investments
(pending final approval), Franklin Templeton Investments
, Goldman Sachs Asset Management
, J.P. Morgan Asset Management
, John Hancock Investments
, Legg Mason Global Asset Management
, Lord Abbett
, Macquarie's Delaware & Optimum Funds
, New York Life MainStay Investments
, Principal Global Investors,
and Putnam Investments
"With this platform, LPL is striving to preserve choice for investors while managing the evolving regulatory environment," Pettman states. "We will be delivering a price competitive solution with the benefit of free exchanges across participating fund companies to help our advisors differentiate their practices in the market and serve a broad range of investors."
The platform is intended to give investors increased value in brokerage through reduced fees and a standardized compensation for financial advisors. In addition, LPL intends to expand investor choice by removing barriers that have restrained investors to stay within a single fund family; the platform will offer exchangeability across fund families. MFO's features will also include load-waived shares, standardized compensation to the advisor including a uniform upfront onboard commission of 350 basis points and a 25 bps trail payment, and "elimination of certain annual account and trading fees."
The participating fund companies collectively include the majority of funds that LPL's advisors use regularly today.
"Having our funds readily available on LPL's innovative brokerage platform will allow more people to easily include them in their portfolio as they save for retirement and other long-term objectives," states Bill Brady
, senior vice president of wealth management, American Funds.
"Goldman Sachs Asset Management is pleased to be working with LPL Financial on the development of its Mutual Fund Only brokerage platform, which will feature the GS Financial Square Government Money Market Fund
as a vehicle to access the platform," states Matt Hostasa
, managing director, Goldman Sachs Asset Management. "We believe this arrangement will help provide clients with unique investment opportunities for today's markets."
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