White paper tackles investor confusion about the terms fiduciary and suitability
TD AMERITRADE Institutional, a division of TD AMERITRADE, Inc. has issued a white paper to inform financial services professionals and consumers about the impact of proposed regulatory reform on investors and financial advisors. The white paper, titled "The Standard of Care for Investment Advice: Drawing a Clear Line of Distinction Between Fiduciary and Suitability", brings focus to the blurring line between brokers and advisors. It recommends better defining industry standards for investors to help clear up confusion about the differences between various types of investment services and providers.
The release of this white paper comes at a critical time. President Obama and Congress have made commitments to reform financial services regulation to improve investor protection. Pending legislation in Congress provides the opportunity to redefine the financial regulatory landscape. Few would argue against the need for financial regulatory reform given the events of the past 18 months and the changing landscape of financial services. However, much needs to be considered regarding the reshaping of the standard of care for financial advice to ensure greater investor protection while still preserving investor choice.
"We need to draw a clear line between the broker and the advisor, with proper upfront disclosures and education, so investors can easily understand the difference between them," said Tom Bradley, president, TD AMERITRADE Institutional. "We support upholding the fiduciary standard independent registered investment advisors are currently held to today. Policy makers need to carefully consider the unintended consequences of blanketing a universal fiduciary standard across all brokerage business models. Not all investors want to pay for or need ongoing investment advice."
The paper highlights the need to:
- Provide a clearer definition of the types of services offered by the various types of financial professionals so investors can make informed decisions;
- Clearly differentiate among non-advisory broker-dealer activities like clearing, the sale of products to retail clients by broker-dealers and the provision of ongoing and personalized investment advice; and
- Deliver an appropriate standard of care for investors dependent on the type of professional relationship and the services they request.
"It is an exciting time to be in financial services, as we have the opportunity to reshape our industry. How we respond to this challenge will determine our collective success. TD AMERITRADE Institutional can be counted on to be part of the solution and serve as a voice for advisors and their clients," said Bradley. "Care must be taken to remake our industry in ways that restore investor trust; ensure regulators and legislators develop rules and laws appropriate for the different needs of investors; and make it clear to all that we are acting in the best interests of consumers."
Visit maximizemyriabusiness.com to download a copy of the white paper: "The Standard of Care for Investment Advice: Drawing a Clear Line of Distinction Between Fiduciary and Suitability."
AMTD-G
About TD AMERITRADE Institutional
TD AMERITRADE
Institutional is a leading provider of comprehensive brokerage and
custody services to over 4,000 fee-based, independent Registered
Investment Advisors and their clients.1 Our advanced
technology platform, coupled with personal support from our dedicated
service teams, allows investment advisors to run their practices more
efficiently and effectively while optimizing time with clients. www.tdainstitutional.com
About TD AMERITRADE Holding Corporation (NASDAQ: AMTD)
TD
AMERITRADE Holding Corporation, through its brokerage subsidiaries,2
combines innovative trading technology, easy-to-use and understand
trading tools, investment services, investor education and superior
client service to create a market-leading financial services experience.
Now home to the award-winning thinkorswim brokerage and dynamic trading
platform3 and the Investools investor education program, TD
AMERITRADE provides millions of retail investors, traders and
independent registered investment advisors with the tools, service and
support they need to help build confidence in today's rapidly-changing
market environment. For more information and resources for journalists,
please visit the TD AMERITRADE newsroom at www.amtd.com.
1 TD AMERITRADE Institutional, Division of TD AMERITRADE, Inc., member FINRA (www.finra.org) / SIPC
(www.sipc.org).
2TD AMERITRADE, Inc., member FINRA (www.finra.org)
/SIPC (www.sipc.org),
TD AMERITRADE Clearing, Inc., member FINRA/SIPC, and thinkorswim, Inc.,
member FINRA(www.finra.org)/SIPC(www.sipc.org)/NFA
(www.nfa.futures.org).
3thinkorswim was rated #1 overall online broker, "best for frequent
traders," and "best for options traders" in Barron's ranking of
online brokers, 3/16/2009. thinkorswim was evaluated versus others in
eight total categories, including tradeexperience/execution,
trading technology, usability, range of offerings, research amenities,
portfolio analysis & reporting,customer service & access and
costs. thinkorswim topped the list in 2009 with the highest
weighted-average score.
Barron's is a registered trademark
of Dow Jones & Company ©2009.
Contacts:
TD AMERITRADE Holding Corporation
Kristin Petrick,
402-574-6569
Communications and Public Affairs
kristin.petrick@tdameritrade.com