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Serving two masters: How TD’s Schweiss plans to manage his conflicts of interest at the FPA

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When Skip Schweiss sought the 2021 FPA presidency, he knew that, even if he won the board’s vote, he could face unusual challenges in executing his responsibilities.

“When I decided to throw my hat in the ring ... I was very clear to the board that, ‘Let’s call out the elephant in the room,’ if you will. I’m not a CFP. I’m not a practicing financial planner. I also work for a key vendor of FPA’s and you at the board need to consider all those things,” says Schweiss, the head of retirement plan solutions at TD Ameritrade Institutional.

Schweiss’ role at TD presents potential conflicts because, while many FPA members support the expansion of fiduciary protections for investors around the country, his employer has opposed one state-level effort. Earlier this year, Schweiss’ firm joined with several other brokerages to threaten the state of Nevada that they might discontinue services in the state if it adopts new fiduciary standards the firms deem too strict.

Advisor and co-founder of XY Planning Network Michael Kitces raised alarms over the issue. “TD Ameritrade now has one of its executives in a position to strongly influence the direction of FPA’s advocacy efforts that have a history of conflicting with TD Ameritrade’s own business interests,” Kitces wrote in a blog post. “If the future CEO of TD Ameritrade someday calls Skip Schweiss and asks him to dissuade FPA from advocacy for a fiduciary standard that harms TD Ameritrade’s retail business interests, how exactly is Schweiss supposed to handle that conflict if his job is on the line?”

In the past decade, TD has contributed between $1 million and $2 million to the FPA, Kitces wrote -- a range that Schweiss told Financial Planning is accurate, though he did not provide a precise figure.

In response, Schweiss says he realizes he must balance his conflicts of interest in leading the FPA much in the same way that advisors must balance the ones they face when serving their clients.

“We all agree a conflict could arise in the future,” says Schweiss, adding that he discussed the role with TD and FPA leaders before pursuing it. “There are ways of potentially dealing with that, whether that’s me recusing myself from a vote or whether I’m speaking on behalf of TDA or whether I’m speaking on behalf of the FPA.”

“I don’t think Michael’s wrong [in] identifying the potential conflict of interest,” he added, “but, just as in all of financial advice, there are ways of dealing with them.”

A spokesman for TD Ameritrade did not immediately respond to a request for the custodian’s position on conflicts arising from Schweiss’ new role.

Schweiss says that earlier drafts of the Nevada rule could be “difficult to comply with.” For example, even the seemingly straightforward act of giving a client a Morningstar research report could have been considered advice and, therefore, subject to heightened fiduciary legal standards there.

Schweiss may be right about the proposed Nevada legislation, says Benjamin Edwards, a professor of law and director of the Investor Protection Clinic at the University of Nevada in Las Vegas.

“There’s a possibility that the way the rule is drafted may be difficult to comply with,” Edwards says.

While the state passed a statute in 2017 that expands investor fiduciary protections from RIAs to brokers, it is still in the process of writing the legislation that would stipulate exactly what this protection will mean, according to Edwards.

FPA leaders, one former and one current, expressed support for Schweiss, adding that they trust he would discuss any potential conflicts and address them appropriately.

Frank Paré, this year’s FPA chairman and last year’s president, says all members of the FPA have had ample opportunity to watch Schweiss in the trenches, particularly when they’ve gone to lobby members of Congress on the FPA’s advocacy days on Capitol Hill.

“Skip has been on our board for the last three years,” Paré says. “Not once during our advocacy days was there a situation where individuals felt Skip was falling short in terms of representing what the FPA believed.”

Furthermore, Schweiss is aware that it’s his duty not to express his own views as president, nor that of any outside entity, but only the views of the FPA leadership itself, according to Paré. Failing that, Schweiss would be violating the terms of the nonprofit’s tax-free status as a 501(c )6.

“It’s not TD’s board. It is not Skip’s board. It is the FPA board,” Paré says. “It’s not the FPA now following the lead of TDA. We have an obligation to our members.”

Given TD’s long history of supporting RIAs, he says, the FPA is fortunate to have a leader who works for the custodian.

Dan Moisand, a CFP who served as FPA president and chairman more than a decade ago, said he was happy when he heard that Schweiss would become president.

“He’s a very capable executive. He’s even-keeled. He’s thoughtful. He listens extremely well. He’s articulate. He’s likeable. He’s a very powerful package for a person,” Moisand says. “I think the biggest benefit potential with Skip is if it the FPA is faced with a difficult choice then Skip will make it authoritatively.”

The way Schweiss already has openly discussed the conflict with his employer is evidence of the way he will lead, and manage two masters, going forward, he says. He added that TD itself deserves praise in the matter.

“I’m thankful to TDA to even allow him to even entertain the idea of running for that office,” he said.

In the end, Paré said the FPA’s board will serve as the strongest bulwark against any outside interest trying to unduly influence its decisions.

“This is not a role that we will allow to be coopted by any organization or any corporation or we would not be fulfilling our obligation under the 501(c) 6,” he says.

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