At TD Ameritrade Conference, Tom Bradley Addresses the Fiduciary Issue

The president of TD institutional division talks regulation, growth in wide-ranging interview

TD Ameritrade Institutional president Tom Bradley met with AdvisorOne staff Thursday afternoon to discuss a wide range of topics including regulation, technology, the company’s growth aspirations and his success in attracting breakaway brokers.

“We should only permit reps to provide financial advice under a fiduciary standard; period, end of story,” the outspoken Bradley (left), said. “We don’t need to change the standard. We just need to say, 'Here is the line. If you cross it, you’re held to a fiduciary standard. If you don’t cross it, then you’re not.'"

By way of example, he noted TD Ameritrade retail representatives, located in the company’s branches, do not provide financial advice, and therefore should not be held to the standard.

When asked to comment on the two recently released SEC studies, Bradley acknowledged the SEC’s lack of resources, especially in the examination process.

“The number of SEC examiners has declined while the number of advisors has increased,” he said. “Not only that, but what is the skill set of the examiners? What is their training? Who, in essence, is examining the examiners? A standard operating procedure has to be put in place to address these issues.”

He believes some sort of user fee structure is inevitable, because even though Congress has authorized more funds for the SEC as a whole, most has been slated for enforcement, rather than examination.

When asked how many TD Ameritrade-affiliated advisors were moving to state supervision (for those under $100 million in assets), he said the number was not insignificant, but could not specify the amount.

The interview focus then moved to the company’s growth aspirations and service levels.

“Smaller firms with under $50 million have a team focus,” he explained. “Those with $50-$500 million, which are our core advisors, have a dedicated team of four to six people. Those with over $500 million are assigned an individual as a single point of contact.”

Bradley said he and his senior team review service scores “with a fine tooth comb” and respond to verbatim comments directly.

When asked about growth, Bradley says the company attracts new business in two ways; organic growth through new assets brought in from existing client relationships and what he referred to as “fresh chunks” from breakaway brokers. He noted 40% of new business is organic, with the other 60% coming from new advisor relationships.

“We brought on 288 new breakaway brokers in our last fiscal year, which represents a 40% year-over-year increase,” he said. “We have 70 new relationships in our first quarter of this year, which represent a 9% increase from the same quarter last year.”

He said the number one motivator for those making the switch is a desire to do the absolute best for their clients with complete freedom of choice.

“We have 14,000 mutual funds on our platform,” he noted. “Not one begins with TD Ameritrade.”

The second motivator is the ability to make more money and build greater wealth in their firm, but he says this is a side benefit from the freedom of product choice they enjoy in doing what’s best for their clients.

“I always ask breakaway brokers about why they broke away and why they chose us,” he said. “One guy in Boston recently said he loves to fish. He took some clients out on a charter and they all had a good day. He wanted to post the pictures on his website. It took him months to get pictures of his fish approved. This is what it’s come to. We don’t need more regulation, we simply need better regulation.”

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