TD Ameritrade Leadership Charts Course for RIA Custodian’s Future

Roundtable discussion among TD Ameritrade leadership is punctuated by good humor, mild ribbing

TD Ameritrade Institutional’s leadership took to the stage Thursday morning at the company’s 2013 annual conference in San Diego. Participants included president and CEO of TD Ameritrade Fred Tomczyk, COO of TD Ameritrade Marv Adams, president of TDAI Tom Nally, and Tom Bradley, currently the president of TD Ameritrade’s retail distribution and former CEO of TDAI. The panel discussion was moderated by Mandy Drury, anchor of CNBC’s Street Signs.

Fred TomczykTomczyk (left) began by noting the wirehouse exodus to the independent channel is a “long-term secular trend.”

“The RIA channel is the fastest growing channel and has been for some time,” Tomczyk said. “In our own company, we were able to recently gather $16 billion in one quarter. A few years ago, we didn’t gather $16 billion in an entire year.”

In response to a question from Drury about the current state of the market and whether investors are now getting in at the top, Bradley noted that retail investors follow trends, but follow or lack behind those trends only slightly. He added that he did not believe investors are getting in at the top.

Drury followed up by asking Tomczyk to comment on the overall economy.

“From a macro environment perspective, the economy is improving; there’s no doubt that it is slowly getting better,” Tomczyk explained. Corporations are healthier than ever. Europe as well as other economies around the globe are talking about growing their economies, and they realize we can’t save our way to success. "I am concerned about the risk/reward ratio with long-term bonds. Investors don’t understand what will happen if rates change.”

Drury then turned to technology, asking Adams about upgrades the company recently made.

“We continue to invest technology when times are good and when times are tough,” Adams said.  “Our platform is completely open architecture and we continue to open it up to the third-party market in order to get the best products. From a next-generation standpoint we are doing great things with mobile technology and social media.”

Bradley interjected that social media will not go away; it is an efficient and effective communication and marketing tool. “But advisors need to proceed with caution around compliance,” he added.

Noting the difference between the retail business and the institutional business, Bradley noted that the company’s RIA direct referral program increased by 58% over the past year and Amerivest increased by 110%.

Drury asked the panel about some of the recent changes made at the executive level.

“I always say to Tom Bradley that the institutional business is doing well now that we have a real leader in place,” Tomczyk said to much laughter from the audience. (Bradley moved to the retail side of TD Ameritrade a year ago, with Nally taking the reins at TDAI.)

Picking up on the good natured ribbing, Bradley noted that Nally called when the division hit $200 billion in assets.

“I told him if I was still there we would be at $250 billion,” Bradley chided.

“I told Nally not to make a big splash, which is what many new executives look to do,” Tomczyk added.  “I told him things are going well and to make sure they continue to do so. What he heard was 'Don’t screw it up.'”

The conversation wrapped with a discussion of the lean concept of production and process.  The concept was developed by Toyota 85 years ago, and it was something Adams began implementing at TD Ameritrade when he joined the firm two years ago.

“Lean is a culture that identifies issues immediately to ensure they are dealt with right away,” Adams explained. “Problems don’t age well. A mistake that too many companies make is that they encourage individual departments to work in isolation, not in a collaborative fashion. Also, they are constantly changing strategies, which burns resources unnecessarily and demoralizes staff. It’s better to pick two or three initiatives and stick with them.”

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