As the Department of Labor’s fiduciary rule takes effect, the nation’s largest independent broker-dealer will roll out a new mutual fund platform intended to remove conflicts of interest in advisor compensation.

Charlotte-based LPL Financial has announced that beginning in 2018 it will offer a “mutual fund only” (MFO) platform with standardized commissions.

“With this platform, LPL is striving to preserve choice for investors while managing the evolving regulatory environment,” said Rob Pettman, LPL executive vice president of product and platform management, in released comments. “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 company said that the new platform is designed to improve the way advisors offer mutual funds in brokerage accounts with participating fund companies, reduce fees for investors and standardize compensation across the industry.

The new platform uses load-waived shares to decouple commissions from products. MFO gives advisors a one-time 3.5 percent commission when clients are onboarded into an institutional money market fund managed by Goldman Sachs. The commission will be assessed by LPL. Investors with positions in MFO-eligible mutual funds on the LPL platform will be permitted to move into an MFO account without paying the onboarding commission.

After they’re onboarded, clients may transfer assets between 1,500 mutual funds offered by 20 different asset managers for no additional charge, and advisors will receive 0.25 percent annual trailing commissions regardless of fund selection.

In addition, MFO will eliminate certain annual account and trading fees.


The asset managers on the MFO platform at launch are:

  • AB
  • American Century Investments
  • American Funds
  • BlackRock
  • Columbia Threadneedle Investments
  • Eaton Vance Investment Managers
  • Fidelity Investments (pending final approval)
  • Franklin-Templeton Investments
  • Goldman Sachs Asset Management
  • Invesco
  • J.P. Morgan Asset Management
  • John Hancock Investments
  • Legg Mason Global Asset Management
  • Lord Abbett
  • Delaware & Optimum Funds
  • MFS Investment Management
  • New York Life MainStay Investments
  • Oppenheimer Funds
  • Principal Global Investors
  • Putnam Investments

LPL says that the funds were selected via an analysis of the funds used by the company’s advisors and the quality of the lineups. Thus, the new platform will include the majority of funds used by LPL advisors today.

The DOL’s fiduciary rule implements a best-interest standard of conduct for financial advisors making recommendations within retirement accounts, establishing strict rules for the disclosure of conflicts of interest in compensation and requiring broker-dealers to reconsider the products offered to retirement clients and their sales procedures.

In anticipation of the rule, LPL last month changed its pricing on certain annuities and unit investment trusts. Other broker-dealers have implemented new platforms or processes as well, most recently Raymond James, which announced that it would standardize compensation by moving to a single payout grid.


The MFO platform will undergo beta tests with a small group of advisors this year, with a goal of going live in early 2018.