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Rating:ETF Providers Gain Another 401k Portal Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, April 21, 2011

ETF Providers Gain Another 401k Portal

News summary by MFWire's editors

Fundsters pondering how to get ETFs inside of 401(k) plans may want to take a look at TD Ameritrade's latest offering. Yesterday the discount brokerage giant's trust company officially launched its ETF 401(k) platform, giving retirement plan sponsors access to 201 ETFs for only two basis points extra (beyond regular custody costs) and with TD covering the trading costs.

Skip Schweiss
TD Ameritrade Trust Company
President
Our sister publication, The 401kWire, interviewed TD Ameritrade Trust Company president Skip Schweiss about the new platform [see The 401kWire, 4/20/2011]. PlanSponsor's Rebecca Moore also covered the news release.

Schweiss confirmed that the new platform includes ETFs from BlackRock's iShares, Invesco's PowerShares, Rydex, Vanguard and WisdomTree.

TD's program, which features non-proprietary ETFs and is designed for use by outside retirement plan advisors, recordkeepers and third-party administrators, contrasts with the planned ETF 401(k) platform coming from Schwab, which will be run directly by Schwab and feature Schwab's own ETFs. The TD program effectively trades ETFs like mutual funds, while the Schwab platform will allow participants to trade ETFs in real-time as it's powered by Schwab's brokerage platform. (TD already offers 401(k) participants access to ETFs in real-time through its own self-directed brokerage platform.)


Company Press Release

Jersey City, N.J. - April. 20, 2011 – TD Ameritrade Trust Company, a non-depository trust company subsidiary of TD Ameritrade Holding Corporation (NASDAQ: AMTD), announced today the availability of a new investment program that allows plan sponsors and independent registered investment advisors (RIAs) to offer exchange traded funds (ETFs) to 401(k) plan participants alongside other plan investment options such as mutual funds, collective investment funds, and employer stocks.

“With this 401(k) solution, we’ve made adding ETFs as an investment option to a retirement plan easy and affordable,” said Skip Schweiss, president, TD Ameritrade Trust Company. “We offer a wide selection of non-proprietary investment choices at a low cost so advisors and their plan sponsor clients have the tools they need to help workers pursue their retirement goals. By including ETFs in retirement plans, plan sponsors and advisors can deliver valuable choices to their clients and differentiate themselves in the marketplace.”

The popularity of ETFs as an investment option has been growing steadily with independent RIAs and TD Ameritrade clients looking for low and transparent fees and diversification. TD Ameritrade client usage of ETFs has increased more than 30% annually for the past two years. Even with the increasing popularity of ETFs, adoption of ETFs in 401(k) retirement plans has been low, mainly due to technical challenges.

Legacy 401(k) recordkeeping and accounting systems are not designed to accommodate ETFs which trade throughout the day and can only be traded in whole shares. To overcome these hurdles, TD Ameritrade Trust Company has simplified operations for recordkeepers by developing a trading process that mirrors mutual fund trading and is consistent with their current procedures. This process also includes the ability to trade fractional shares of ETFs. In addition, per-share fees and transaction fees are eliminated for 401(k) plans on the TD Ameritrade Trust Company platform, which can provide potential cost savings to plan participants and eliminate the reconciling component for recordkeepers. Another key feature of the TD Ameritrade Trust Company platform is its open architecture, which allows advisors and plans sponsors to select ETFs from multiple providers.

“We expect the ETF market will continue to grow and by facilitating their use in retirement plans, TD Ameritrade Trust Company aims to drive down costs in the industry and further our commitment to providing advisors, plan sponsors and participants the choice and flexibility they need to help their clients achieve their retirement investing goals,” noted Schweiss.

For more information, please visit www.tdacorporateservices.com, or call 866-827-5894.

About TD Ameritrade Trust Company

TD Ameritrade Trust Company is a leading provider of unbundled trust and custodial services to retirement plans for independent Third Party Administrators (TPAs), Retirement Plan Advisors (RPAs), Recordkeepers and Plan Sponsors.1 Through our commitment to personal service and our open architecture approach, TPAs and RPAs have an ally in helping grow their retirement plan business. We offer TPAs, RPAs and their clients flexibility, full fee transparency, the ability to choose the best capabilities and service providers and access to a referral network of independent advisors, allowing TPAs and RPAs to realize the full advantages of an unbundled solution. TD Ameritrade Trust Company offers asset custody, directed trustee and comprehensive back-office support for a wide range of retirement plans. For more information, please visit www.tdacorporateservices.com.

About TD Ameritrade Holding Corporation

For more than 36 years, TD Ameritrade Holding Corporation (NASDAQ: AMTD) has been in the business of serving individual investors – either directly or through a network of independent registered investment advisors. Through its brokerage2and education3 subsidiaries, TD Ameritrade combines innovative trading technology, easy-to-use trading tools, investment services and education, and superior client service to create a market-leading financial services experience. Home to Kiplinger's #1 online broker4and Barron’s #1 online broker for “Options Traders”,5 TD Ameritrade provides millions of retail investors, traders and independent registered investment advisors with the tools, service and support they need to help build confidence in today's rapidly changing market environment. For more information and resources for journalists, please visit the TD Ameritrade newsroomat www.amtd.com.

1 TD Ameritrade Trust Company is a non-depository trust company, acts as a custodian and/or directed trustee and is not a member of FINRA, SIPC or NFA. TD Ameritrade Trust Company is a subsidiary of TD Ameritrade Holding Corporation.

2 TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org) /NFA (www.nfa.futures.org), and TD Ameritrade Clearing, Inc., member FINRA/SIPC.

3 Investools, Inc. is an education subsidiary of TD Ameritrade Holding Corporation. Investools, Inc. does not provide financial advice and is not in the business of transacting trades. Investools, Inc. and TD Ameritrade, Inc. are separate but affiliated companies that are not responsible for each other's services or policies.

4 TD Ameritrade was ranked #1 and received an overall score of 5 stars (tied for first place with one other broker), in the Kiplinger's Online Broker Ratings, Kiplinger's Personal Finance, 02/2011. Fourteen brokers were ratedin the categories: Costs, Web site usability, Investment choices, Customer service, and Research and tools.

5 TD Ameritrade was awarded an overall 4 ½ out of 5 Stars and was named "Best for Option Traders" in Barron's2011 Online Broker Survey, 03/2011. TD Ameritrade also received the highest rating, 4 ½ out of 5 stars, in the "Best for Long-term Investing" category, sharing that rating with only one other broker. TD Ameritrade was evaluated versus 23 other online brokers in eight total categories, including trade experience, trading technology, usability, range of offerings, research amenities, portfolio analysis and reporting, customer service and education and costs. Barron'sis a registered trademark of Dow Jones & Company ©2006-2011. 

Edited by: Neil Anderson, Managing Editor


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