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Industry Spotlight > RIAs

TD Ameritrade Draws 441 Breakaway Brokers in FY2012

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TD Ameritrade Institutional had 441 breakaway brokers join its platform in fiscal 2012, a 27% increase from fiscal 2011, according to the company. It also reported 112 breakaway brokers joined in the fourth quarter alone.

TD Ameritrade Logo“We’ve seen the momentum increase from 2011 to 2012, and while we don’t know what will happen in the first quarter of our upcoming fiscal year, it’s definitely trending in the right direction,” Pete Dorsey, TDAI’s managing director of sales, told AdvisorOne following the company’s fourth quarter and fiscal year 2012 earnings call on Monday.

TD Ameritrade Holding Corp. (AMTD) announced last week that although it saw a 13% drop in earnings for the fourth quarter due to a decline in commissions and transaction fees, it nonetheless beat analyst expectations. The brokerage’s quarterly net income was $143 million, with earnings per share of $0.26, down from $164 million, or EPS of $0.29, at this time a year ago.

Profits for the full year fell 8%, totaling $586 million, or EPS of $1.06. This compared with $638 million a year ago, or EPS of $1.11. Net revenues fell 4% to $2.64 billion for the fiscal year ended on Sept. 30 versus $2.76 billion for fiscal 2011. Quarterly revenues came to $647 million compared with $667 million for the quarter ended June 30.

For his part, Dorsey said issues driving breakaway brokers to the custodian include “an ongoing crisis of confidence with Wall Street, in which clients are voting with their feet.”

“Very often, advisors are being pulled to the independent channel by demand form their clients,” he said. “They want their advisors to make the move, or are at the very least asking why they haven’t.”

As to what TD Ameritrade offers breakaway brokers that its competitors don’t, Dorsey named superior technology, customer service (as evidenced by the service metrics they routinely release) and transition support for advisors making the move.

“We’ve helped more than 1,000 advisors become RIAs since 2010, which is more than any other custodian,” Dorsey said. “Once they get here, they realize the offerings we have to help them be more efficient. Most have never been exposed to a full-time job of running a business in addition to the investment portion. So we have abundant resources in that area.”

The company specifically noted its Bridge to Independence program, which “serves to simplify and ease the transition for financial advisors looking to start their own RIA firm, join an established RIA or operate as a hybrid advisor.”


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