Bill and I recently embarked on a journey to “sunny” Orlando, Florida for the TD Ameritrade National Conference. Though we dreamed of sunshine and palm trees, we experienced a week of rain and colder than expected temperatures. The clutches of the Polar Vortex reached further than we thought possible; however, the real purpose of our trip extended far beyond the hope of a nice tan.
The conference was highlighted by speakers such as Mitt Romney, Sugar Ray Leonard, Simon Sinek, as well as several financial services “big wigs”. In addition to the keynote speakers, there were many other sessions we attended to learn about TD Ameritrade’s platform, as well as educational sessions to help our clients.
As part of our due diligence process, we wanted to explore what TD Ameritrade had to offer compared to our current custodian, Schwab. (A “custodian”, simply stated, is the financial institution that actually holds our clients’ money. We interact with the custodian and direct them on how we want the funds invested). Our goal in taking this trip was to determine if their offerings were superior to Schwab’s and if our clients would have a better overall experience with TD. You may be asking, “Is NorthWest Financial unhappy with Schwab?” No, we’re not unhappy – but we need to know what else is out there. Without a comparison, we don’t really know how well, or poorly, Schwab is doing. This is an instance where ignorance is certainly not bliss.
Cost, integration with existing programs, customer support, online presence, use of technology, and paperwork requirements are just a few of the areas that need to be explored when investigating a new custodian. Each part must be considered and looked at holistically without giving too much weight to any one area. Just as you wouldn’t buy a car solely because it had heated seats, we wouldn’t add/remove a custodian based on one feature.
Though TD Ameritrade has many intriguing offerings, for now we have decided not to add them as an additional custodian alongside Schwab. We believe Schwab provides excellent client service, program integration, back-office support, online client portals, banking features, and technology solutions. Additionally, client feedback on their experiences with Schwab has been very positive. While TD Ameritrade may have had some isolated advantages, we feel that the overall package offered by Schwab is superior at the moment.
As custodians inevitably change and develop, we will continue to periodically investigate what else is out there. While we are pleased with Schwab, we are not blindly allegiant to them. We are committed to continued due diligence in our search for the most suitable custodian for our clients. We believe that Schwab currently fits that description, but what the future holds is unknown – just as the reach of the Polar Vortex.
Matt Yeiter, CFP®