Registered investment advisors are a fragmented, diverse group, and often that’s fine with them. Most value their independence, and are more focused on finding better ways to work with their clients than with each other.
But that makes it hard to present a united front and unified message when it comes to advocating for policy issues that are important to them. So custodian TD Ameritrade Institutional stepped into the arena on their behalf.
Born out of a need to take a public stand against the controversial “Merrill Lynch Rule” in 2005, which allowed brokers to give financial advice to clients without operating under the strictures of the Investment Advisor Act of 1940, TD Ameritrade Institutional has made it their mission to press for the kind of recognition and collective influence afforded other professional industries. It is the only custodian with a dedicated office of Advisor Advocacy.
With more than 5,000 fee-based, independent RIAs using TD Ameritrade’s brokerage and custody service, the firm is in a solid position to push for recognition of the transparent and objective business practices that lets those advisors stay on the same side of the table as their clients. It’s a crucial topic, as the Dept. of Labor seems set to alter the investment advice business by passing new rules around best interest standards for advisors to retirement accounts.
Skip Schweiss, Managing Director, Advisor Advocacy and Industry Affairs, extolls these virtues, noting “we believe very, very strongly in the fiduciary standard of care for investors.”
The firm’s efforts are far from bombastic and never pandering; Schweiss has helped foster dialogue around the topic with all sides of the debate; the firm hosts a regular Advocacy Summit, and helps raise awareness among both industry practitioners and regulators to help find consensus where needed, while still drawing guardrails around crucial points.
The most recent development in this area is the launch of TD Ameritrade’s online RIA Advocacy Action Tool, which provides regulatory updates and comment letters and features a portal for RIAs to send messages directly to their local representatives.
“Our challenge is to raise awareness and educate RIAs about the key issues, and make advisors care enough to take action. We also needed to give RIAs a fast and easy way to participate in an advocacy effort. The new tool offers these small business owners a way to effectively amplify their collective voice when there is a need to educate lawmakers on important issues,” said firm spokeswoman Kristen Petrick.
Petrick predicts future endeavors for the advocacy office will be in areas that “are poised to have a significant impact on RIAs, such as the need to bring more talent and diversity to the industry and prepare advisors to serve the next generation of investors.”