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Friday, August 4, 2017

TD Ameritrade "therapist" commercials

     If you watch any of the cable news shows you have undoubtedly seen the commercials for TD Ameritrade where the advisor talks about everything but your stock portfolio.  He comes across as a therapist or close confidant.   I think that is why he has a beard and a sweater.  I almost wait for him to say "so how was your relationship with your parents."
     If you wonder why these companies are taking this tack in their commercials you only have to understand that index fund investing is eating into the financial advisor investing business.  Now that we know that advisors charging us substantial amounts for advice that can't beat index funds the financial advisor companies are having to give us another reason to have an advisor.  Think of your financial advisor as a life coach.

      The Obama Administration proposed a rule to require advisors to tell you if they are a fiduciary.   Simply the "fiduciary rule" was a consumer protection rule that:

  "...... demands that advisors act in the best interests of their clients, and to put their clients' interests above their own. It leaves no room for advisors to conceal any potential conflict of interest, and states that all fees and commissions must be clearly disclosed in dollar form to 

    So it is not surprising that the pro business/anti consumer Trump Administration is trying to stop this rule from going into operation.  I guess financial advisors winning is more important than consumers winning.


Ox said...

This is an example of a very misguided post where someone tries to inject politics into a subject they know nothing about. I hope after reading my response you will consider possibly retracting this post.

1) TD Ameritrade is a deep discount platform that consumers can use directly to trade or use advisors to trade on. The majority of trading on this platform is indexed based trading. Advisors serve as modeling experts helping clients tie their portfolios to their risk tolerance and financial plan. Some advisors even use a "robo" system which uses AI to maximize portfolio results. You have made some very bad assumptions about TD's model and the advisors who work with TD.

2) The fiduciary rule which you just chose to politicize to fit your political agenda is very complex and has little to do with Obama and Trump. Advisors like myself who are asset based and non-transactional are actually already fiduciaries and support most of this rule. Advisors who are commission based/transactional are the ones against the rule. This isn't Obama vs. Trump. And to further this point the industry is strongly moving away from transactional advisors anyway. The problem with the DOL rule actually has to do with jurisdiction more than anything else and actually highlights the central problem with our government. The problem at hand is the DOL stepping on the toes of the SEC and having two bureaucratic organizations doing the exact same things. The American taxpayer is basically footing the bill for the DOL to oversee advisors in the same capacity as the SEC is for fee based advisors already. The more prudent thing would be to have a fiduciary rule where its overseen by the SEC not the DOL. Why you ask? The SEC knows our business, they can spot fraud better, they understand the markets better, and they are on the ground floor of the industry. The DOL has already made several rookie mistakes during this process.

This was a very misinforming blog post and I hope you think twice before spreading false information in the future.

duanestclair said...

Thanks for the info. Always willing to post responses from people willing to post with their name attached to post.