Schwab, TD Ameritrade may form DC lobbying duo on fiduciary issue

“We've had discussions with Schwab about how we can put the two of us together to make more impact,” J. Thomas Bradley Jr., president of TD Ameritrade Institutional, said in an interview yesterday at the Financial Planning Association's annual conference in Anaheim, Calif.

The issue is “about consumer choice,” he said. “That is, don't blow up the discount-broker model” by imposing a fiduciary duty on brokerage firms that handle do-it-yourself investors, Mr. Bradley said.

Other discount firms may also be involved in what may turn out to be a coalition of such firms.

Mr. Bradley declined to provide further details.

Although he has been outspoken in supporting a fiduciary duty for advisers who manage client assets — including those who keep client assets under custody at TD Ameritrade — he said imposing a higher duty on discount brokers is unnecessary.

Discount-brokerage customers who value cheap executions don't want to be burdened with sharing unneeded information with their brokerage firms about assets and objectives, Mr. Bradley said.

“We we share a similar point of view with TDA on this issue,” said Sarah Bulgatz, a Schwab spokeswoman, in an email.

“Not all investors want to pay for discretionary portfolio management, or for a financial plan or for comprehensive wealth management, and they shouldn't be forced to do so,” she said.

In recent months, Schwab officials have voiced concerns about pricing small investors out of the market if they have to pay advisorylike fees.

Stephen Austin, a spokesman for Fidelity Investments, another leading custodian for RIA assets, declined to comment about any discussions the firm is having, or its lobbying strategies.

Mr. Austin said Fidelity supports a clear fiduciary standard of care within the context of personalized advice for retail investors but opposes extending a “blanket” fiduciary standard to all brokerage activities.

Drawing a line between giving advice as a fiduciary and offering some support for the do-it-yourselfer may be difficult.

Mr. Bradley said a customer of TD Ameritrade's discount side who comes into a branch and seeks some guidance about various products and services should be treated as a brokerage customer.

In terms of lobbying muscle, TD Ameritrade pales in comparison with its discount-broker rivals.

In the first half of this year, Schwab and Fidelity each spent $1.2 million lobbying policymakers in Washington.

TD Ameritrade spent just $25,000.