Why TD Ameritrade?

Because we are a Registered Investment Advisor, we do not maintain any physical custody of a client’s assets. This is a very important safeguard for clients. In fact, here is some free advice: Don’t ever allow your investment advisor to also have physical custody of your assets! Those are two functions that should always be separated, for your protection.

Picking the right custodian was time consuming but not difficult. We looked at Charles Schwab, Raymond James, Bank of America, SunTrust, and Ameritrade. We met with many of the individuals involved and spent many hours using their online capabilities.

After a lengthy due diligence process, we selected Ameritrade to serve as our independent, third-party client custodian. We think Ameritrade offers the best combination of service, technology and value for our clients and Bay Capital Advisors.

Ameritrade was founded in 1975 and has been a pioneer in the discount brokerage industry for 30 years. Based in Omaha, Nebraska, Ameritrade had revenues of over $1.8 billion in 2006.

It was named “Top Choice” among internet brokers by The Wall Street Journal. Forbes named it “Best of the Web” in both 2003 and 2005. Barron's gave it a four-star rating in 2006, and the #1 rating among Best Online Brokers in their 2007 12th annual survey.

Ameritrade serves over 6 million clients and holds over $280 billion in client assets. Accounts are protected by the Securities Investor Protection Corporation (SIPC) which protects securities in your account up to $500,000, of which $100,000 may be applied to cash. Up to an aggregate of $100 million of additional securities protection (of which $900,000 may be applied to cash) is provided by London Insurers.

In 2006 Ameritrade completed a merger with competitor TD Waterhouse and became TD Ameritrade, with almost 150 offices nationwide. The agreement created the world’s largest online retail broker, as determined by average number of retail trades per day, averaging 238,000 each day.

We think TD Ameritrade will be able to utilize the scale and financial strength of the new combined entity to continue its technological innovation and to provide a broad platform for investors.

Our obligation is to our clients, not any corporate custodian. We will continue to review their performance. If we ever become concerned, each client will be notified promptly. If appropriate, we will ask clients to move their assets to another custodian.