Percolating: RIA custody roundup for 2010
New faces, new programs, new technology and new assets
Serveral areas to querry these firms on their industry leadership in advisory services:
1. Like brokerage firms, custodians have not provided access to the enabling resources which would make fiduciary standing scalable, safe and easy to execute. The fear of fidiciary liability is only managed by providing the necessary enabling resources with an audit path to objective fiduciary criteria of statue, case law and regulatory opinion letters and expert opinion letter to prove fiduciary standing. Will any of these firms actually make fiduciary counsel safe and easy to exectute?
2. Do any custodians plan to offer expert advisory services support for each of the ten major market segments (Mass, Retail, HNW, Ultra HNW, DC.DB, Foundations and Endowments, Public Funds, Profit Sharing)advisors serve?
3. Scale is terribly important for RIAs as it determines profit margins, the level of counsel provided and the capacity to grow. Are any of these custodians effective in offering practice management services that actually enhanse service yet reduce cost.
4. Unlike brokers, RIAs offer accountability. Do any of these custodians help advisors in portfolio construction, improving the client experience, if so how?
5. A functional division of labor is essential in managing clients and internal human resources and require extraordinary skill and operational insight. Do any of these custodians help advisors optimize practice operations and staff effectiveness?
6. Advisory services sales and marketing are materially different from product sales, do any of these custodians have an advisory services sales and marketing function by market segment which would help the advisor develop and articulate a preemptive advisor value proposition relative to the predominant brokerage business model?
7. Do any of these custodians provide a prudent investment process (asset/liability study, investment policy, strategic asset allocation, performance monitor, tactical asset allocation) with an audit path the the necessary statutory documentation to prove fiduciary standing for each of the ten major market segments in which advisors are active?
8. Do any of the custodians provide an objective assessment of enabling technology?
9. In managing conflicts of interests, do any of the custodians provide omnibus block trading to advisors which drive down trade execution cost, reframe from principle trades, minimize fixed income spreads, fully disclose 12(b)1 fee compensation and/or waive 12(b)1 fees, disclose and/or reframe from keeping the interestr earnings on the float between execution and settlement? All of which are prohibited transactions in fiduciary accounts.
The questions are endless, but these would be a good start.
My survey of several months ago established that custodians have little understanding of any of thes questions.
TD Ameritrade's board suddenly pushes out Tim Hockey after his big misread of RIAs; Tom Bradley name-dropped as successor
The CEO broke the TD promise never to compete with RIAs, took it back and got sent packing
July 23, 2019 at 4:30 AM
A canary in the coal mine, Amy Richardson left Charles Schwab & Co. for an RIA -- before the 2,000 layoffs -- now a robust job market is saving the Schwab diaspora, she says
The former Schwab director wants former colleagues to know life exists after Schwab and good job opportunities are plentiful in the financial services sector.
December 20, 2023 at 1:52 AM
Joanna Rotenberg is departing Fidelity Investments after only two years, writing that she traveled 20,000 miles and successfully split her retail division into wealth and brokerage units
At her hire, analysts were adamant the head of Fidelity retail had 'big shoes to fill' to replace legendary Kathleen Murphy and her task of 'digitiizing' retail was no small ask
December 16, 2023 at 2:22 AM
Schwab 2,000-layoff aftershocks roil the industry as it's revealed top tech talent -- led by widely regarded veteran Kartik Srinivasan -- were axed, raising questions about future of Schwab innovation
Behind every layoff a human story as pink slip to an 'unbelievable talent' epitomizes company's determination to cut $500 million in expenses.
November 3, 2023 at 3:49 AM
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