Ameritrade’s Bradley: Pick a hat. Either hat.

TOM BRADLEY’ s point, to a disinterested outsider at least, probably would not seem all that controversial. But on the issue of a universal standard of care for investment advisers and brokers, most insiders are not disinterested.
In an interview last week at a meeting of his company’s affiliated advisers in San Francisco, the president of TD Ameritrade Institutional said that advisers should pick one hat — adviser or broker — and stick with it.
“I don’t think it’s OK to have the same client under two different business models. That’s wearing two hats,” Mr. Bradley said. “You’re either a fiduciary or not. Pick one.”
Anyone giving investment advice “should register … as an adviser,” he said.
Brokers who sell proprietary products and are compensated by commissions pose an “inherent conflict of interest,” Mr. Bradley said.
His comments prompted heated responses.
“—He’s not that far off; but he’s off!

First of all, if you are selling the proprietary product, then you are an agent, not a broker. “Broker’ needs to be defined as an unrelated intermediary representing the interests of one side (buy side or sell side) of a transaction. This means he cannot represent the interest of both sides of the transaction (as in sell from -inventory).

If he does represent both sides, then he is obligated to represent the interests of the seller, and as such, he is an agent.

If Mr. Bradley wants the standard he has promoted, then what he needs to be willing to do is forgo all “assets under management” and adopt a business paradigm where advisers have no AUM but only [assets under advisory influence]. Got AUM? You’re a product salesman, period!”

— Dredpiraterobts






“Once again, Tom Bradley stepping up and calling it -correctly.”
— Chippewa Partners
“Like sheep to the slaughter … BAAAHHH. Yes, master, we will look out for our clients’ best interest …
What horse cr@p! Don’t you idiots get it? What’s best for the client in this socialist garb is for you not to charge them one thin dime! Wait until they make this standard for everybody, then they start winnowing away at what you are allowed to charge, and always with the cry: “You mean, evil, overcharging b@st@rd!’ But you won’t fight it, because you might look like the bad guy. Good God! Grow a set for a change!”
— Scott_Williams
“Tom Bradley’s company has $120 billion under advisory management. His discount brokerage doesn’t give advice. Do you think his answers are skewed against commission brokers?”
— John_Schlegel
“What a load of cr*p. Everyone should have a fiduciary responsibility but retain the right to get paid in a manner that is best for the client. Sometimes that means a commission, and sometimes that means a fee.”
— Andrew_T
“Andrew_T, I could not agree more. I hold myself to a fiduciary standard whenever I work with a client, but sometimes a commission is better for the client than an annual fee. Mr. Bradley is not living in the real world.”
— Shantom
“It is a simple argument. Terribly high commission costs, no accountability for investment recommendations, no transparency in compensation nor in terribly high packaged-product investment cost and a plethora of conflicts of interest — versus reasonable advisory services cost (at a fraction of the cost of packaged products), accountability in investment recommendations, total transparency in investment product cost, and compensation with no conflicts of interest, not to mention a far superior adviser/client value proposition.”
— Stephen_Winks