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Selecting Your Custodian


Cardiff Park generally recommends that all investment management accounts be maintained at the institutional wing of TD Ameritrade, Fidelity, or Charles Schwab. Prior to engaging Cardiff Park to provide investment management services, new clients are required to enter into a formal agreement with Cardiff Park setting forth the terms and conditions under which Cardiff Park will manage the client assets, and a separate custodial agreement with the designated custodian(s).

Each custodian provides Cardiff Park with access to institutional trading and custody services. The designated brokers charge brokerage commissions and/or transaction fees for certain securities transactions (i.e., transaction fees are charged for certain no-load mutual funds, commissions are charged for individual equity/debt securities transactions).

There is no direct affiliation or fee sharing arrangement between Schwab, TD Ameritrade or Fidelity and Cardiff Park for participation in their institutional services. We receive benefits that we would not otherwise receive if we did not have an established relationship with Schwab, TD Ameritrade, and Fidelity. These benefits include: dedicated trading desk that services our clients, a dedicated service group and client service managers dedicated to our account, electronic download of trades, duplicate and batched client statements, confirmations, year-end summaries, and the ability to have other fees waived for our clients.

Cardiff Park considers a variety of factors in recommending custodians to clients. These include the broker's financial strength, execution capability, research availability, quality of service and reputation. The designated brokers enable Cardiff Park to obtain many no-load mutual funds without transaction charges and other no-load and load-waived funds at nominal transaction fees. The designated brokers charge commission rates that are discounted from customary retail commission rates. The commissions and/or transaction fees charged by the designated broker may be higher or lower than those charged by other broker-dealers.

While we work to act in your best interest, our desire that you consolidate assets in accounts at Charles Schwab, TD Ameritrade and Fidelity is based in part on the availability of certain products and services at no cost to clients, or at reduced cost to Cardiff Park, and not solely on the cost or quality of custody and brokerage services provided by the brokers. Clients may, therefore, pay higher transactions fees, commissions (for individual stock and EFT trades) and principal mark-ups and mark-downs (relating to purchases and sales on a principal, as opposed to agency, basis), than those charged by other discount brokers. That said, we have negotiated fees with the custodians we recommend, and selected these custodians for their generally low fees. It’s important to note that we prefer custodians who possess significant size and financial resources for enhanced safety of client funds. For all of these reasons, we may not recommend the lowest cost custodian.