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These are not the best of times to be running live events, but at TD Ameritrade’s Partnership 2009 national conference in Las Vegas in the first week of February, however, some 900 advisors gathered to commiserate and be educated over three days. In his welcoming address, Tom Bradley, the head of TD Ameritrade Institutional, recounted for the audience the changes since the last TDA gathering. In a separate interview with Editorial Director Jamie Green, Bradley was all business as he discussed the changing role of the custodian and the expectations of advisors.

You’ve been working with advisors since 1992 and have seen multiple business cycles. Is it different this time?

What’s changed is advisors’ desire for more information to share with their clients. They’re also looking for leadership–we have this long tenure which helps. What’s made it tough this time is that even well-diversified portfolios have been down. These advisors appreciate knowing that they’re not the only ones who are struggling.

They have a much greater appreciation for TD Ameritrade as their custodian. It used to be that advisors would refer to their custodian as a “necessary evil.” They’re not saying that now.

There are many brokers leaving wirehouses to go RIA. Are their expectations different?

Their expectations are very different. But one thing we’ve started, called AdvisorMatch, is to match our existing advisors with these breakaway brokers. It’s not a true M&A, but like adding a partner to your firm. Many of our RIAs like it.

You’re a big advocate for the registered investment advisors, but are you worried that regulators in Washington won’t have the same appreciation for the RIA model?

Change in the regulation of financial services is inevitable. We have to make sure the regulators know that all the problems that have occurred were not with RIAs; Bernie Madoff was a broker/dealer! We have to make sure they don’t over-regulate a business that doesn’t need it, and that they don’t lose sight of the RIA differentiator that protects the investing public as enshrined in the Investment Advisers Act: You’re a fiduciary; so your first responsibility is to the client.

As these discussions take place, we need to have a seat–or seats–at the table. If anything, there might be more pressure on the other model to take a fiduciary approach.

We need a major post-mortem on these Ponzi schemes to determine how they were possible and how to keep them from happening again. Investor education is necessary: [consumers must learn] to trust but verify. I expect there will be a requirement that advisors have a third-party custodian. Also, regulators have to analyze why the wirehouses imploded. We have to tweak the system to make it better.

What worries you at night?

Things I can’t control; things that might happen in Washington. I like the fact that we’re a bit of an underdog. But I worry about the people who are losing their jobs, and the people who are in or near retirement. We’ve got to figure out how to help those people.


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