At TD Ameritrade Gathering, Technology, Trusts, Diversity—and Blue Jeans

TD Ameritrade Institutional’s annual advisor gathering featured well-received addresses by people like Leon Panetta and Magic Johnson and a last-night party headlined by the Steve Miller Band. During the show, held in San Diego in late January, TD made a number of announcements, including four major initiatives.

There was another noticeable change at LINC: All the TDAI executives wore blue jeans at the conference, including TD Ameritrade CEO Fred Tomczyk. Why the sartorial shift? In an interview during the conference, TDAI President Tom Nally said the intent was for the executives to reflect the more casual clothing favored by advisors themselves, and to make those TD leaders “a little more approachable.”

That more casual approachability was reflected in the opening session at the Manchester Hyatt in San Diego with a first for an advisor conference. A packed roomful of attendees (3,300 registrants, TDAI said) using pairs of thunder sticks or drumsticks played along with a drum line on stage that spelled out “LINC,” the conference’s new name (for Learn, Inspire, Network and Collaborate). The attendees enthusiastically participated, so it was appropriate when Nally began his welcoming speech by saying the drumbeat opening was “like an RIA pep rally.” Nally kept in the spirit by first denigrating wirehouses—“their executives want to downplay your success”—while praising the RIA channel as the “only one to gain numbers,” citing Cerulli research.

Nally then announced TD’s four major initiatives, which he and executives like Jim Dario expanded upon in personal conversations.

Diversity by Age and Gender

Following up on his request to have all the advisors in the audience under the age of 30 stand up—there were about 35 of them—Nally said, “We’ve got work to do to promote diversity” and add to the ranks of younger advisors and those studying to be advisors. Only 6% of advisors, he lamented, are under 30.

TD is putting its diversity money where its mouth is by providing two new scholarships for university financial planning students. It’s also providing university grants, notably to Texas A&M University, to develop what Nally called a “top-tier financial planning program” at A&M.

Secondly, the company launched during the conference the RIA NextGen Career Exchange, a free job and resume posting site for RIA firms and job seekers.

Jim Dario, managing director of product management for TDAI, said in an interview that TDAI’s next-gen initiatives are meant to help them “move from student to advisor” and to take advantage of younger advisors’ particular skills that complement older advisors’. “These new folks are trained first” in technology tools and financial planning, while “older folks were trained first in sales.”

Since becoming president of the RIA custodian in 2012, Nally has talked about the importance of diversifying the advisor work force in terms of gender, age, ethnicity and race. “Advisors are starting to understand” the importance of diversity, he said in a private interview. “Years ago, advisors were resistant; they had bad experiences” with younger advisors, but he pointed out that “millennials are the largest living generation—and 40% of them are ethnically diverse.” As for women, “the industry is starting to catch up,” but warned that “big macro trends take time to develop.”

Dario said TD is helping to “create an industry that looks more like the country,” noting that “people want to work with people who look like them and connect to them.”

As for the RIA channel itself, Nally said “it’s the only one to add head count. By 2018, Cerulli says the independent channel will exceed wirehouse” advisors. He cited a McKinsey study showing that while RIAs have only 10% of managed money as of 2014, “they’ll gain 28% over the next four years.” What about the independent broker-dealers? “IBDs are losing their top producers. They’re defensive, fighting this secular trend” toward full independence, and instead are “building closed” systems.