The Role of a Custodian in Asset Management
Many client prospects since Brecken Capital Advisors, LLC (BCA) is a RIA (Registered Investment Advisor) ask where do their account reside, how is it managed and who's name is it in. Clients open a TD Ameritrade Institutional account using their platform. We assist in filling out this paperwork. TD acts as the custodian & service agent (gate keeper of account) and BCA manages the assets within the account through the client granting us discretion to make asset allocations. Accounts opened are in CLIENTS name and its their account not BCAs as we only manage it. Clients have full access to their accounts online and have the ability to not only see whats in it, but see changes in it and move money in and out. BCA has authorization to manage the assets within the account, not move money in or out of the account unless with written approval by the client. That's the role of TD Ameritrade to assure this is enforced as well as provide account services such access and reports (ie tax reports). TD Ameritrade, like other Custodians, has a dedicated team that supports advisors in a range of client services.
Client accounts, since they are in their name can be moved anywhere they wish if they chose another advisor at another firm. The new firm they have chosen files a transfer form with their new Custodian which is affiliated with the new advisor and the account is moved.
This is no different with other advisors (big or small, independent or who work for a bank/brokerage firm/insurance company) all have a custodian assigned to manage the accounts. Larger companies have an affiliate company serve as the Custodian others have third party firms (like TD Ameritrade). This is as per regulation to assure your money is secure in that the Custodian acts as the gatekeeper of client's money. So whether its RIA where my name is on the "door" and is independently owned or part of a larger company the management of accounts is essentially the same.
At Brecken Capital Advisors we actively manage clients assets through the use of 7 proprietary model portfolios designed to match each client's risk tolerance with our views of the market & economy. We use a combination of ETFs and individual stocks with TD Ameritrade Insitutional as our Custodian who does not charge trading fees. Additionally, we transparently measure both cost & performance for our clients. For more insights see our website and disclosures found there at BCA.