Having spent nearly 20 years serving registered investment advisors in TD Ameritrade’s RIA segment, Tom Nally is ready to face what may be his greatest challenge — assuming the role of TD Ameritrade Institutional president that his storied successor, Tom Bradley, left behind in February. When Bradley became the parent company’s new president of retail distribution, Nally took over as head of the RIA business.
It’s a position that Nally is prepared to take over, considering that he and Bradley worked closely together for years and that during his career he has been responsible for trading, fixed income, advisor relations, customer service, advisor technology, account services and operations for more than 4,000 independent RIAs who custody assets with TDAI.
“In working with Tom in this organization for a long time, we definitely have a lot of similarities,” Nally says. “We both place emphasis on the culture here and building strong teams and making sure that we’re always putting the client first. We’re obviously different people, so we do things differently, but it’s all about making sure you have good people with common goals working together.”
Nally considers his company fortunate to be in “the sweet spot” of financial services, where the RIA business is growing significantly. Not only does TDAI see existing advisors enjoying strong asset growth, but it also sees many new breakaway entrants coming into the space. Indeed, more advisors are bringing assets to TDAI than ever before. Last year, the business brought in 348 breakaway brokers, up about 20% year over year, and TDAI now comprises 60% of the overall company’s net new assets and 40% of its total assets. As of Feb. 29, TD Ameritrade has $441.8 billion in total assets.
Asked to name the most pressing issues that advisors will encounter in the year to come, Nally focuses on four essential trends.
First, advisors are running their firms more like a business than a practice, he says. “We’re seeing more and more advisors hiring chief operating officers and trying to create enterprise value to build out their business,” Nally says. Second, a significant demographic trend is taking place, with advisors more focused on the wealth transfer of assets from boomers to Gen X and Gen Y — a $20 trillion opportunity.
Third, the breakaway broker trend is not slowing down. The RIA space has grown by about 45% in the last five years or so, while the wirehouses have grown only 6% because “their model is broken,” Nally asserts. Fourth, since the average age of advisors is about 55, more RIAs are getting serious about succession planning.