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LPL Financial's Fiduciary Rule Memo to Reps Implies Deeper Message: Become an RIA or Stand Down on Giving Rollover Advice

"LPL Financial is taking steps to avoid accusations of placing big DOL pitfalls in the path of its brokers -- but in doing so could also be creating two categories under its roof: haves and have-nots.... [The] firm last week sent a memo to its 14,000 advisors with a bare-bones directive regarding the [DOL's] dictates about brokers recommending 401(k) rollovers to clients. The move comes as the IBD announces a massive structural change that brings its 401(k) business more under the purview of its main retail business."

LPL Financial CEO Floats Idea of Orphaning 3% of Its Brokerage Business in Prelude to DOL 'Travesty'

"LPL Financial ... aired out the possibility of orphaning a vast swath of its own clients and their billions-of-dollars of assets as a worst-case scenario unless the [DOL] backs off heightened fiduciary rules. The ... independent broker-dealer could cut loose brokerage retirement client accounts with $15,000 or fewer in assets, which could amount to about 3% of LPL's retirement brokerage assets."

FINRA Orders Wells Fargo, Raymond James, and LPL Financial to Pay More Than $30 Million in Restitution to Retirement Accounts and Charities Overcharged for Mutual Funds

"Many mutual funds waive their upfront sales charges on Class A shares for certain types of retirement accounts, and some waive these charges for charities. Mutual funds available on the retail platforms of Wells Fargo, Raymond James, and LPL offered these waivers to charitable and retirement plan accounts under limited circumstances and disclosed them in their prospectuses. However, at various times since at least July 2009, Wells Fargo, Raymond James and LPL did not waive the sales charges for affected customers when they offered Class A shares. As a result, more than 50,000 eligible retirement accounts and charitable organizations at these firms either paid sales charges when purchasing Class A shares, or purchased other share classes that unnecessarily subjected them to higher ongoing fees and expenses."

LPL Bars Brokers from 401(k) Rollover Advice

"LPL Financial's hybrid advisors will no longer be able to make 401(k) rollover recommendations when acting as brokers, InvestmentNews reports. The move will expose advisors and LPL to less risk under the [DOL's] fiduciary rule, which treats rollover recommendations as fiduciary advice and went into partial effect June 9, according to the publication. LPL's hybrid advisors will still be able to recommend rollovers if that advice is limited to their company's advice side of the business and meets certain conditions, according to an internal memo seen by InvestmentNews."

DOL Retirement Advice Rule Opponents Press Congress, Agency

"[M]ost experts expect a lawsuit to challenge the rule in court, in an identical move out of the playbook of the industry trade groups that successfully got Labor's last attempt at a similar rule vacated in 2018. In another echo of earlier rulemakings or legislative efforts, opponents such as the Financial Services Institute, Ameriprise and LPL Financial helped advisors flood the agency with thousands of form letters."

The Small Business Retirement Savings Challenge (PDF)

"91% of small employers without a plan would be at least somewhat more likely to start a plan if the cap on the current tax credit for starting a plan were increased to $5,000 ... and adjusted to cover all initial costs.... 86% of small employers with a plan would be at least somewhat more likely to offer automatic enrollment if they were eligible for a $500 credit for doing so[.]"

Three Myths and a Fact about Public Pension Systems

"Myth 1: Public pension systems are about to run out of money.... Myth 2: A few good years in a bull market will bring the fund back to health.... Myth 3: Since the states are going to dramatically increase their contributions over the next few years, this should take care of the underfunding problem, as happened in the 1980's.... Which leads us to a cold hard fact: the fix which worked in the past is unlikely to succeed in the future. Putting public pension systems on firm footing is going to require significant and unpopular changes to current policy."