Schwab Rolls Out All-ETF 401(k) Plan

Last week, the trust unit of TD Ameritrade (AMTD) rolled out a turnkey program to help its 4,500 affiliated RIAs more easily expand their work in the retirement plan business. The program brings together recordkeeping, custody and third-party administration, as well as thousands of non-proprietary ETFs and mutual funds.

TD Ameritrade says its RIAs have been offering 401(k) investors access to ETFs since March 2011, and its platform includes more than 1,000 ETFs; retirement investors can also buy stocks or pick from a long list of mutual funds. In addition, while Schwab's plan will be marketed directly to plan sponsors as well as through advisors, TD Ameritrade notes that its retirement plan services are sold only through RIAs.

"We've had custodial platform for retirement plans advised by RIAs for 18 years," said Skip Schweiss, president of TD Ameritrade Trust Co., in an interview.

"We found that this model is used by about 8% of our advisors, and the other 92% are not as involved in the business — which is what we see industrywide in terms of RIAs in the retirement space," Schweiss said.

When asked what's holding them back, many of its 4,500 affiliated advisors say the business is too complicated. Plus, it takes too much work and time, and they're too busy already, he says.

"Advisors also said, 'We need the TD Ameritrade brand to be put on these offerings for when we go visit retirement plans that put us in competition with the other big brands,'" Schweiss explained. "That's why we've made it easier with a new tool. The platform gives RIAs a more integrated approach that includes a third-party administrator."

Today, RIAs can call TD Ameritrade to help them generate proposals to retirement-plan sponsors. They will be able to do this online by the end of June at the latest, he adds. This approach will soon be available to reps.

"We are pretty confident, based on the input we're getting and the volume of calls we're received, that we will head north of 8% over the next few weeks, months and years," Schweiss said. "We're determined to help our advisors be in a better position than they've been in the past to succeed in this market."

Competitor LPL Financial (LPLA), which recently tapped Bill Chetney to serve as president of LPL Retirement Partners, says about 5,000 of its 13,500 affiliated FAs are working with the unit. Since Chetney came on board in 2010, the unit has recruited 400-plus advisors, grown its asset base to over $94 billion and begun servicing more than 32,000 retirement plans with about 3 million participants.