Rounding out a series of fee increase announcements,
LPL Financial LLC has informed its registered representatives and financial advisers that it is increasing the cost of errors and omissions insurance per rep next year by $200, for an annual charge of $3,200, according to two LPL advisers.
Managers of large offices known as offices of supervisory jurisdiction also face a new fee. Next year, larger OSJs will pay $500 per branch for the LPL home office to perform mandatory audits of each branch operating under that manager.
LPL will charge the OSJ manager $500 per non-OSJ branch exam only if the OSJ manager has more than two such branches.
If the OSJ manager has less than two of those branches, than LPL will perform the exams for no additional fee. LPL will not charge for any non-OSJ branch exams performed prior to July 1, 2014, even though the exams will begin Jan. 1, company spokeswoman Betsy Weinberger wrote in an e-mail.
“
LPL Financial annually assesses its fee structures to ensure they fairly represent the services and support we provide,” she wrote. “The fee adjustments we are announcing thoughtfully balance our firm’s need and cost structure with our advisers’ goal to keep the costs of running their business affordable, reaffirming the value of affiliation with
LPL Financial.”
Typically,
LPL Financial has typically waited until the fall to announce changes to its fees all at once, thus rankling advisers, who will now face an increase for the third consecutive year.
This year, LPL announced the fee increases incrementally, perhaps lessoning the sting for some advisers.
The two advisers who provided
InvestmentNews with information about the fee hikes declined to be identified.
Last month, the largest independent broker-dealer, with more than 13,000 affiliated advisers, informed advisers about fee increases for its third-party money management platform, called Model Wealth Portfolios.
In January, LPL will begin charging 15 or 20 basis points on new accounts in the MWP platform for advisers who choose the firm's internal research to create model portfolios. Advisers have paid for a variety of choices of money managers in the MWP platform, including
BlackRock Inc. and JPMorgan Chase & Co., but until now there had been no charge for model portfolios created internally by LPL.
And in July, the firm informed reps who had been responsible for supervising themselves of a $4,800 fee increase in 2015 for those one-person, one-office reps who choose to be supervised by LPL's home office.
A coming rule revision by the
Financial Industry Regulatory Authority Inc. is one of the factors pushing LPL to make changes in supervision, the company said at the time.
