Regulations are changing the way that wealth advisors and investment firms deal with clients and each other. A new offering plays into this landscape.

LPL Financial, the broker/dealer arm of US-listed LPL Financial Holdings, has put some flesh on the bones of plans for its Mutual Funds Only platform, an offering coming at a time when wealth managers must tune their services to new regulatory requirements.

The firm said the platform is shaped to improve how advisors offer mutual funds in brokerage accounts with participating fund companies. The platform is slated to be ready for LPL advisors and organizations early next year.

With the new Department of Labor Fiduciary Rule starting to bite, with the effect of encouraging advisors to move to charging fees rather than collecting trail commissions, the way that investment products are offered to clients is also changing.

“With this platform, LPL is striving to preserve choice for investors while managing the evolving regulatory environment,” Rob Pettman, LPL executive vice president, Product and Platform Management, said. 

The company said the platform gives investors “enhanced value” in brokerage through reduced fees while standardizing compensation for financial advisors. Features include load-waived shares from 20 mutual fund companies; standardized mutual fund compensation to the financial advisor through a uniform upfront on-boarding commission and other features, and elimination of certain annual account and trading fees.

Initially, when investors add cash to their MFO accounts, the funds will be routed through an institutional money market fund offered by Goldman Sachs Asset Management and then assessed a one-time on-boarding commission by LPL. Investors who hold positions on LPL’s brokerage platform of MFO-eligible mutual funds will be permitted to avoid the on-boarding commission if they transfer those positions into an MFO account. 

The 20 fund companies that are expected to be available on LPL’s MFO platform when it launches include: AB (formerly Alliance Bernstein), 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, OppenheimerFunds, Principal Global Investors and Putnam Investments.