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LPL to Limit Fees on Non-Traded REITs and BDCs

LPL Financial, the nation’s largest independent broker-dealer, is limiting sales commissions on certain illiquid investments in preparation for the Department of Labor’s fiduciary rule that is scheduled to take effect on June 9th.

According to a letter sent to brokers, the new policy will cap upfront commissions on non-traded real estate investment trusts, business development companies, and real estate limited partnerships at 3 percent and annual trailing commissions at 1 percent. Total commissions will be limited to 6 percent.

LPL said that it is working with sponsors to lower investor fees and is moving to make commissions uniform for all non-traded direct investment products.

LPL recently named Michelle Oroschakoff as the managing director and chief risk officer of the company, effective June 9.

She will oversee the firm’s legal and government relations functions as the chief legal and risk officer, and is taking over general counsel duties following the departure of David Bergers.

Oroschakoff joined LPL in 2013 from Morgan Stanley, where she was the global chief risk officer for Morgan Stanley Wealth Management. She is responsible for company-wide risk management processes and controls, managing compliance and governance and enhancing the corporate risk profile as chair of LPL’s risk oversight committee.

LPL Financial, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), served approximately $535 billion in brokerage and advisory assets as of April 30, 2017. LPL is the nation’s largest independent broker-dealer based on total revenues. The company provides technology, clearing and compliance services, practice management programs and training, and independent research to more than 14,000 independent financial advisors and more than 700 financial institutions.

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