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Rating:Mutual Funds Only? Fundsters Explain LPL's New Platform Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, August 04, 2017

Mutual Funds Only? Fundsters Explain LPL's New Platform

Reported by Jennifer Qiao

Big fund firms are teaming up with LPL for a new platform. MFWire talked to some distribution fundsters about LPL's Mutual Fund Only platform that is rolling out in January 2018.

Rob Pettman
Executive Vice President
LPL Financial

On July 13th LPL revealed the 20 fund firms that would be on LPL's Mutual Fund Only (MFO) platform. Rob Pettman, executive vice president of product and platform management, tells MFWire that this is the "first of its kind."

When asked on whether they will add more fund firms to the platform in the future, Pettman responded saying that they are "continuing to evaluate and research" and as of now there are "20 fund firms that represent over 80 percent of the business."

John Moninger, MD and head of retail sales at Eaton Vance, tells MFWire that this "platform gives greater diversification and strategy for brokerage firms."

"While other firms are building different variations of this concept, and versions that begin to look like this, in this platform there is one pricing mechanism to get access to 20 firms."

Moninger says "This is a robust platform that opens up brokerage options as well."

There are 1,500 mutual funds available across the 20 fund firms. Joe Devico, head of the national wealth manager business at BlackRock, tells MFWire that they are "thrilled to be part of this platform."

"We have a very longstanding relationship with LPL and believe it's just one more feature of LPL that is great and works in the best interest of clients in terms of pricing, transparency, lower fees, and innovation," Devico says.

Jeff Masom, head of US sales at Legg Mason, tells MFWire that "The MFO platform provides LPL with a solution for the evolving regulatory environment, while providing their advisors and clients flexibility to purchase mutual funds in a brokerage account." From January 1, 2018 LPL advisors will only be able to access mutual funds within a brokerage account through the MFO platform.

"We expect that there will be a large pool of assets in motion given LPL's sizable Direct to Fund business, where future purchases into mutual funds will be prohibited, and that this is the only way to access mutual funds in a brokerage account," Masom tells MFWire. "We think it will appeal to advisors and consumers who want to purchase mutual funds in a brokerage account, rather than an advisory or other account. This preference could be due to fees, length of holding the investment or for other reasons."

Bill Brady, senior vice president of wealth management at American Funds, tells MFWire that "We want to ensure our investment offerings are accessible to all people and that we are easy to do business with. The LPL MFO platform supports our ability to do this. We do participate in other platforms and continually evaluate additional opportunities. We are using our A share class with the load waived."  

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