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The RIA-ification intrinsic to LPL’s preemptive DOL policy changes — yet how tightly to revenue sharing in IRAs it is hanging

Mar. 22, 2016 (RIABiz) — LPL’s super-clients like Private Advisor Group see a clear ‘advisory’ future but LPL is walking a more shrub-choked hybrid path.

LPL Financial is prepared to make a giant leap toward a more RIA-like future — but only if it can hopscotch to new ways to earn commissions along the way.

The Boston-based broker-dealer last week announced a series of price cuts and structural changes impacting its nearly 15,000 advisors — changes that are somewhat baffling as to exact intent. What is hard to tell is whether LPL Financial meets anticipated new Department of Labor rules or if it’s a preemptive reaction to what advisors and consumers will see in broad daylight once new disclosures are required.

Brain Hamburger, CEO of MarketCounsel, supposes it’s more of the latter, pointing out the many advisors presume that because they are, for instance, getting a 95% payout that that means they receive 95% of revenues, when in fact the broker-dealers get paid by funds for shelf space.

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