TD Ameritrade Offers Rebates on Managed Account Program

On the heels of a GAO report on issues with managed accounts and the offer nine months ago by Schwab to rebate fees to unhappy clients, TD Ameritrade made an interesting guarantee to rebate losses to investors in their managed account program. 

After receiving an “approval” from regulators in a no-action letter, TD will provide refunds to any investors in their Amerivest program who have suffered losses for two consecutive quarters. The costs of their managed account program varies from 30-125 BPs.

Sound too good to be true? Schwab’s offer to rebate fees to unhappy clients resulted in less than 1% of the applicable group actually making the request. Some critics say that the TD offer sounds too gimmicky, but it might push people who are skittish about losses to try their managed account program. 

Though they are considered a robo-advisor — using a risk-based questionnaire to help investors make portfolio decisions — TD also offers help through their call center, like Vanguard does. Plus, they have clients, credibility and marketing clout. Could this offer apply to DC plans?