RMD data, Schwab communications roil indie advisors post-TD
One of the latest wrinkles in the Charles Schwab custody transition from TD Ameritrade’s system involves RMDs, and a lack of records for any that were taken this year before Sept. 5.
That has left advisors who were part of the move double-checking to ensure that their clients who are 72 or older don’t take higher distributions from tax-qualified retirement accounts than necessary before the end of the year.
Several advisors who spoke with InvestmentNews on condition of anonymity said that because required minimum distribution data did not transfer from TD Ameritrade’s VEO One system to Schwab’s, there will be a considerable headache for advisors who rely exclusively on records from the custodian.
“This is going to cause major problems if people take them twice,” one advisor said. “I don’t think they will realize the problem till December. Then it’s going to be a major crunch for advisors or not seen at all … The problem is that many advisors will depend on the information on the Schwab site and send out RMDs twice.”
Advisors did not want to be quoted by name because of their ongoing relationships with Schwab.
Another said that compared with other post-transition issues, the RMD data problem is minor. Advisors can look up that information in customer relationship management programs – if they use one – the advisor said. But if they don’t, going through individual account statements is the next best option, albeit time-consuming, they said. “Schwab will tell you, ‘That’s your responsibility’” to keep track of RMDs.
A related issue that advisor noted was that the taxes on RMDs were set to default levels after the move, even though some states don’t tax retirement income. A client in Iowa, for example, has money being set
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