Possible fee refunds for poor performance spur debate

TD's proposal to soothe unhappy clients, Morgan Stanley's management shuffle and the rest of this week's must-reads

Aug 29, 2014 @ 11:13 am

By Andrew Leigh

Offering refunds on managed-account fees when portfolios lose value grabbed readers' attention this week in the wake of news that TD Ameritrade Inc.'s retail advisory service had gotten the green light to pursue this approach. The hot-button issue drew strong reactions, though it wasn't the first to take this step. The week also saw some high-level reorganization at Morgan Stanley, a huge ruling against a former LPL Financial broker and new insights on the most tax-friendly states for retirees.

TD to refund managed-accounts customers' fees following losses

Trevor Hunnicutt broke the news that TD Ameritrade's retail advisory arm would offer fee rebates to new clients of its Amerivest managed-accounts service if their investments saw negative returns in two straight quarters. The news stoked much debate in the comments section, as "JGuild" claimed this practice "opens the door for all sorts of portfolio manipulation," so the firm could hypothetically avoid handing out refunds. TD also isn't the first firm to dabble in customer refunds, as Charles Schwab Corp. announced in December that their clients could request refunds.

High-level Morgan Stanley execs depart as firm restructures

Morgan Stanley's management saw some notable departures last month as the firm aims to boost earnings by focusing on efficiency. According to Mason Braswell's piece, many of the departures were tenured managers who had ties to Smith Barney, and the highest-profile personnel left the firm's consulting group.

Ex-LPL broker slammed with hefty disgorgement and penalties

Blake B. Richards, formerly of LPL Financial, has been ordered to pay nearly $2 million in disgorgement and penalties. How did this broker behave badly? He allegedly misappropriated $1.7 million from investors, some of whom were elderly. These were clients' retirement savings or life insurance proceeds from deceased spouses, according to the SEC.

The 10 most tax-friendly states for retirees

A valuable new resource for clients facing retirement: this ranking of the 10 states that have the best tax structures for retirees. The states are ranked based on 10 tax categories, including seven types of income tax; sales tax; real estate tax; and estate, inheritance and gift taxes.

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