The TD Ameritrade Asset Protection Guarantee [Annotated]
If you lose cash or securities from your account due to unauthorized activity [such as someone opening new trades in your account without your knowledge or consent], we’ll reimburse you for the cash or shares of securities you lost [but not for anything that WE lost]. We’re promising you this protection, which adds to the provisions that already govern your account, if unauthorized activity ever occurs and we determine it was through no fault of your own [but since we are making that determination, we will almost always determine that it was your fault]. Of course, unauthorized activity does not include actions or transactions undertaken by or at the request of you, your investment advisors or family members, or anyone else whom you have allowed access to your account or to your account information for any purpose, such as trading securities, writing checks, or making withdrawals or transfers. [And we remind you that your Client Agreement authorizes us to access your accounts at any time for any purpose.]
We promise this protection if you work with us in four ways:
1. Keep your personal identifying information and account information secure and confidential — because sharing your UserID, password, PIN, account number, or other standard means of authentication with other people means you authorize them to take action in your account [remember we already have access to that information].
2. Keep your contact information up-to-date with us, so that we can contact you in case of suspected fraud [by you, as we never do anything fraudulent].
3. Review your account frequently and your statements promptly and report any suspicious or unauthorized activity to us immediately in accordance with your Client Agreement. [This way we know which transactions to conceal from the transaction logs we send to our regulators].
4. Take the actions we request [such as sending in additional funds overnight] and cooperate with our investigation.
If you help us protect you in these basic ways, we’ll promise no fine print and no footnotes…[because our employees do not know how to do that fancy stuff in Word].
Sarcasm aside, it appears that TD AMERITRADE’s Asset Protection Guarantee does have fine print, in that it does not cover losses resulting from unauthorized trades that originated from within the firm.
There is no FDIC insurance for funds in investment accounts, you are at the mercy of the brokerage firm. And if that firm is “too big to regulate”, and it permits (and supports!) its employees to falsify reports, alter telephone recordings, and perpetrate fraud, your funds are certainly at risk.