Displaying items by tag: td ameritrade

(New York)

When Schwab announced its acquisition of TD Ameritrade in November 2019, there was a big and sustained surge of consternation among RIAs. TDA had long been known as specializing in RIAs, especially on the smaller end of the spectrum. Schwab had exactly the opposite reputation. That has left a general void for the smaller advisor looking to go independent for the first time. However, Goldman is apparently ramping up its new custody unit and clearing platform for RIAs. The move is still in its early stages, but the firm is hiring several executives to lead the charge and seems to be aiming to compete with Schwab, Fidelity, BNY Mellon etc.

FINSUM: Advisors may recall that Goldman acquired United Capital in 2019. United was an RIA consolidator, so this seems like a natural step for the bank. In our view, it would be great for the industry to have more competition on the custodial front.

(New York)

Ever since the announcement of the Schwab-TDA merger, RIAs have been nervous about their future with the combined custodian. TDA was known for working hard for smaller RIAs, whereas Schwab was not at all. Now, with the combined entity, RIAs are worried about being neglected, or dumped altogether. However, Schwab has just put out a public pledge, saying “When it comes to independent advisors, we’re all in … Today, over half of the firms we serve have under $100 million in AUM. You are the future of this industry”. Schwab also promised no AUM minimums or custody fees, saying they have “no intention to raise them. Because we believe that every firm of every size deserves world-class support”.

FINSUM: This was a more specific pledge, but it will likely do little to calm small RIAs.

(New York)

We became concerned for our advisor readers today when we read an article in the FT warning that many trading platforms are at serious risk of hacking. The article says that many trading platforms, such Charles Schwab, TD Ameritrade, and Interactive Brokers, secure data in an unencrypted or partially unencrypted format, leaving them highly vulnerable to hacking. If a hacker got your password, they would be able to do anything you could on the platform. Generally speaking larger brokers had safer platforms than smaller ones, and both Schwab and TD Ameritrade emphasize that they are making progress on the issue.

FINSUM: This seems like a major risk that has gone ignored. We wanted to make sure to warn our readers as we are aware that many of you use Charles Schwab and TD Ameritrade.

(Washington)

In what will surely go down as a landmark case, the state of Massachusetts is going after Scottrade in the first prosecution of misconduct under the fiduciary rule. Massachusetts says the broker held sales contests for its reps, before the acquisition by TD Ameritrade in September, which violated fiduciary standards. The state said about the prosecution that “If the Department of Labor will not enforce its own laws and rules, then the states must do what they can to protect retirees from firms who believe they can play with peoples’ life savings by conducting sophomoric contests”.

FINSUM: The developing role of states in both creating and enforcing the fiduciary rule/s is quite interesting. We are afraid the leadership vacuum currently surrounding the federal law might lead to a patchwork nightmare.

(New York)

InvestmentNews has run a very ominous article. The piece cites recent evidence published by the Wall Street Journal showing that large discount broker-dealers often mislead clients by saying they do not have incentive fees when they do. Firms like Charles Schwab and TD Ameritrade often brand themselves in a very positive light, saying things like being “champions of investors" and putting clients first etc. However, such misleading behavior may lead to the current or future fiduciary rules being extended to cover broker-dealers entirely, not just regarding disclosing conflicts of interest.

FINSUM: We don’t think the current DOL rule is going to be extended in any way, but it does seem likely that the SEC might take this into account as it creates a new, more comprehensive rule.