Schwab, TD Ameritrade may form DC lobbying duo on fiduciary issue
Two archrivals in the discount-brokerage and custodial business, Charles Schwab & Co. Inc. and TD Ameritrade Holding Corp., may be teaming up to lobby Washington over the fiduciary issue.
Two archrivals in the discount-brokerage and custodial business, Charles Schwab & Co. Inc. and TD Ameritrade Holding Corp., may be teaming up to lobby Washington over the fiduciary issue.
“We’ve had discussions with Schwab about how we can put the two of us together to make more impact,” J. Thomas Bradley Jr., president of TD Ameritrade Institutional, said in an interview last week at the Financial Planning Association’s annual conference in Anaheim, Calif.
The issue is “about consumer choice,” he said. “That is, don’t blow up the discount-broker model” by imposing a fiduciary duty on brokerage firms that handle do-it-yourself investors, Mr. Bradley said.
Other discount firms may also be involved in what may turn out to be a coalition of such firms.
Mr. Bradley declined to provide further details.
Although he has been outspoken in supporting a fiduciary duty for advisers who manage client assets — including those who keep client assets under custody at TD Ameritrade — he said that imposing a higher duty on discount brokers is unnecessary.
Discount-brokerage customers who value cheap executions don’t want to be burdened with sharing unneeded information with their brokerage firms about assets and objectives, Mr. Bradley said.
“We share a similar point of view with TDA on this issue,” Sarah Bulgatz, a Schwab spokeswoman, wrote in an e-mail.
“Not all investors want to pay for discretionary portfolio management, or for a financial plan, or for comprehensive wealth management, and they shouldn’t be forced to do so,” she said.
Stephen Austin, a spokesman for Fidelity Investments, de-clined to comment about the firm’s lobbying strategies.
He said that Fidelity supports a clear fiduciary standard of care within the context of personalized advice for retail investors but opposes extending a “blanket” fiduciary standard to all brokerage activities.
Drawing a line between giving advice as a fiduciary and offering some support for the do-it-yourselfer may be difficult.
Mr. Bradley said a TD Ameritrade discount customer who comes into a branch and seeks guidance about products and services should be treated as a brokerage customer.
In terms of lobbying muscle, TD Ameritrade pales in comparison with its discount-broker rivals.
In the first half this year, Schwab and Fidelity each spent $1.2 million lobbying policymakers in Washington.
TD Ameritrade spent just $25,000.
E-mail Dan Jamieson at [email protected].
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