TD Ameritrade stock-trading suit allowed to proceed
Published: September 24, 2018 / Author: The Wall Street Journal
Some academic research has found incentives for order flow may complicate brokers’ ability to obtain best executions for their clients. A 2013 study by finance professors at the University of Notre Dame and Indiana University found that TD Ameritrade and three of its competitors routed orders in a manner that seemed to maximize such payments, and that such behavior hurt their ability to obtain best execution for clients.
The study, also cited by plaintiffs, concluded that brokers who seek to maximize incentive payments and customer best execution “cannot have it all.”