In the wake of the recent TD-Schwab merger on September 5th, a meaningful issue has come to light for clients with IRAs, specifically concerning Required Minimum Distribution (RMD) records not seamlessly transitioning to Schwab’s platform. This InvestmentNews Article highlights it well. This oversight serves as a stark reminder of the crucial role that well-established processes and highly trained employees play in the financial advisory sector. Custodians will tell you it is not their job to track client RMDs, and they are correct.
The issue underscores why a financial advisory firm must have robust processes in place to identify and rectify such discrepancies swiftly. Well-trained employees are the first line of defense in recognizing anomalies of any sorts, not just RMD amounts. The ability to recognize something that “just doesn’t look right” can save an advisor the major headache that could arise from something out of their control such as incomplete or erroneous RMD data on a custodian’s platform. The consequence of overlooking these details is not merely administrative; it directly impacts clients’ financial well-being. Incorrect RMD amounts can lead to unnecessary tax implications and erode client confidence in your team. Conversely, having a team member pro-actively bring an issue such as this to the clients attention, along with a remediation plan, strengthens client trust and re-enforces the clients decision to chose you as their advisor.
Ultimately clients put their faith that their advisory team is keeping track of important information such as progress toward annual RMD amounts, relying on custodians to do this for them is risking a problem as this current issue demonstrates. This incident serves as a call to action for financial advisory firms to invest in comprehensive training programs and establish foolproof processes that can withstand the complexities of something like a custodial acquisition. The success of such endeavors not only safeguards the interests of clients but also upholds the credibility and trust that clients place in their chosen financial advisors. If you would like to learn more about how Advisory Education Partners resources can help you build a high performing team schedule an exploratory call by clicking here and picking a day and time that is convenient.
The Employee Education And Training Partners For Independent Financial Advisory Firms