LPL Adds Strategists and Builds Towards a UMA Platform
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Thursday, September 14, 2017

LPL Adds Strategists and Builds Towards a UMA Platform

The largest independent broker-dealer in the business is expanding and transforming a flagship platform in several key ways. And they're still adding strategists to the platform.

Rob Pettman, executive vice president of products and platforms at LPL, confirms that the firm continues to amp up its Model Wealth Portfolios (MWP) managed account platform where advisors outsource trading and investment management.

"We're in the process of installing an advisor sleeve within MWP ... kind of the coup de gras," Pettman told LPL's FAs at the B-D's giant Focus conference last month in Boston.

MWP is the baby of LPL chief investment officer Burt White. FAs can now choose from about 120 different strategies (some strategic, some tactical) from eight different institutional managers. They can blend up to three of those models together (say, to use a core-satellite approach), and the advisor has full authority to switch between models. Most strategies on MWP are now down to a $25,000 account minimum.

The plan, the LPL team is telling their FAs, is to start incorporating an advisor-driven MWP sleeve in the first half of next year. FAs will start out being able to use ETFs and other mutual funds in the sleeve, alongside strategies from the institutional managers already on the platform, with LPL handling the investment operations. Yet eventually FAs will be able to use SMAs and direct equities inside their sleeve, too.

"We're changing the identity of MWP," Pettman said. "It's the beginning of a UMA [unified managed account]."

LPL also continues to add strategists to MWP, too, most recently American Funds and Franklin Templeton. And they're looking for more models. Pettman confirmed to MFWire that they have a "12-month plan of adding additional strategist models inside the platform."

MWP is one of LPL's four centrally managed investment platforms. The first, Optimum Market Portfolios (OMP), debuted in 2003 and offers models built out of mutual funds, with a $10,000 account minimum. MWP, the LPL staff say, is like "OMP on steroids." Personal Wealth Portfolios (PWP) is LPL's existing UMA platform, which has a $250,000 account minimum (10 times that of MWP). And then there's the new Guided Wealth Portfolios (GWP), LPL's just-launched cyborg advisor program, powered by BlackRock's FutureAdvisor, that has a $5,000 account minimum and offers portfolios built entirely out of ETFs.

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