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Selecting Your Custodian

 

Where should your money be housed? We generally recommend that all investment management accounts be maintained at the institutional wing of TD Ameritrade, Fidelity, or Charles Schwab. Before offering our investment management services, new clients must sign two formal agreements: one that sets forth terms and conditions under which Cardiff Park will manage assets, and another that establishes terms and conditions with the designated custodian.


Each of our recommended custodians gives Cardiff Park access to institutional trading and custody services. The designated brokers charge brokerage commissions and/or transaction fees for certain securities transactions (for instance, transaction fees for certain no-load mutual funds, and commissions for individual equity/debt securities transactions).


There is no direct affiliation or fee sharing arrangement between Cardiff Park and Schwab, TD Ameritrade or Fidelity for participation in their institutional services. However, we do receive some benefits that we would not otherwise receive without these established relationships, including a dedicated trading desk that services our clients, a service group and client service managers dedicated to our account, electronic download of trades, duplicate and batched client statements, confirmations, year-end summaries, and the ability to have some fees waived for our clients.


We consider a variety of factors when recommending custodians to clients. These include the broker's financial strength, execution capability, research availability, quality of service and reputation. The designated brokers enable Cardiff Park to obtain many no-load mutual funds without transaction charges and other no-load and load-waived funds at nominal transaction fees. The designated brokers charge commission rates that are discounted from customary retail commission rates.


While we work in our clients’ best interests, here are a few legal disclosures about the custodian relationship:


  • Our preference that you consolidate assets in accounts at Charles Schwab, TD Ameritrade and Fidelity is based in part on the availability of certain products and services at no cost to clients, or at reduced cost to Cardiff Park, and not solely on the cost or quality of custody and brokerage services provided by the brokers. As a result, clients may pay higher transaction fees, commissions (for individual stock and EFT trades) and principal mark-ups and mark-downs (relating to purchases and sales on a principal, as opposed to agency, basis), than those charged by other discount brokers. That said, we have negotiated fees with the custodians we recommend, and selected these custodians for their generally low fees.

  • It’s important to note that we prefer custodians who possess significant size and financial resources for enhanced safety of client funds. For all of these reasons, the custodians we recommend may not be the lowest cost option.