TD Ameritrade CEO Tim Hockey received a roaring round of applause from advisors attending the recent National LINC event in San Diego when he explained that the brokerage firm is “not going to try and compete in the same space as RIAs.” Noting that TD’s leadership has been setting “a new course to clarify and define” a new strategy, Hockey shared where the institutional business and RIAs fit in.
The firm’s legacy in the retail space “has been to enable self-directed investors through technology. We have an unmatched set of tools for the investor who is empowered to manage their own money and trade and invest on their own, and for those who want to hand over the reins, that’s where you come in,” Hockey said.
TD believes “RIAs are the best solution for those individuals and families who want and need a comprehensive relationship. The bottom line: we’re not going to try and compete in the same space as RIAs,” Hockey said.
“You offer a range of services to clients that quite simply we’re not going to try to emulate,” he explained. “We’re not on a path the build the capabilities that you do. Rather than competing for the same clients, we’re focusing on accelerating your ability to serve more clients, better.”
Stated Hockey: “If someone walks into one of our branches and is looking for the holistic services and relationships that you provide, we’ll refer that client to an RIA — full stop.”
TD will “continue to empower investors to take control of their financial lives,” Hockey continued. “We are going to build tools for the investor who wants to stay in the driver’s seat. When we play to our strengths and you play to yours, we both win. Your success is our success.”
Edelman News Ric Edelman, the founder of the registered investment advisor Edelman Financial Engines, is no longer going to be an advisor to or investor in Bitwise. During an interview at TD Ameritrade Institutional’s National LINC conference in San Diego, the chairman of financial education and client experience at the popular RIA said he “is in process” of severing his ties to Bitwise.
The reason? Bitwise “is planning to launch a bitcoin ETF, and if we provide that to our clients, we don’t want that to be a conflict of interest,” Edelman said.
Bitwise filed to offer a bitcoin ETF with the Securities and Exchange Commission, and the application is pending, Edelman said. “There’s no assurance that the SEC will approve it; the SEC has rejected every application [for a bitcoin ETF] so far. I’m convinced the SEC’s objections will eventually be overcome and that the agency will ultimately approve a bitcoin ETF.”
As he explained, the SEC has expressed two primary concerns with bitcoin ETFs: custody and price manipulation. “I believe both of those concerns will be resolved to their satisfaction, and probably sooner rather than later.”
He added: “many advisors are no more knowledgeable about this subject than their clients, and many of them are getting questions from clients and they are unable to answer.”
Edelman stated that his session on the topic at the LINC event aimed to serve as an “introductory course on blockchain and crypto assets, to help advisors understand the technologies and help them decide whether they should be recommending crypto — whether or not crypto belongs in your portfolio.”
Generally speaking, he said, “Advisors know very little about the subject and they have a knee-jerk reaction, they are equating it to Beanie Babies and tulip bulbs.”
Are advisors’ fears about crypto justified? “No, it’s not justified at all,” Edelman said. “The whole reason that they’re feeling that way is because of the rapid rise in price in 2017 followed by the crash in 2018, and they’re using that as evidence to support their theory that it’s a fad or a scam. It demonstrates a complete lack of understanding of the technology. The mere fact that an asset rises significantly in value and crashes has nothing to do with whether that asset is legitimate or not.”
Tips for New Advisors Generation Next “is all about bringing that new generation into your offices as both advisors and clients,” said Kate Healy, managing director of Generation Next at TD Ameritrade Institutional, as she kicked off a session on business building ideas for emerging advisors during the firm’s recent National LINC event.
Healy said that she uses a “broad umbrella” when defining GenNext — which she said includes Gen Z, more women and diversity, those returning to the workforce and people in the military. The executive was joined on the panel by Alan Moore, co-founder of XY Planning Network, based in Bozeman, Montana; Marjorie Wentz, a retirement plan advisor at Trinity Wealth Management of Berwyn, Pennsylvania; and Kelly Bradley, a financial planning specialist at Trinity Wealth.
As Healy noted, this year is the 10th that students majoring in financial planning at various universities are attending LINC. Wentz met Bradley two years ago at the conference.
“Kelly did such a great job of reaching out and connecting with me on LinkedIn. She was bold enough to ask me if I had any internships … we decided to develop an internship because I met Kelly and she helped me,” Wentz said. “It was so great for us as a firm. I encourage you to speak to the students and you can find a real gem like we did.”
Temple University “sent me here” to LINC, Bradley, 23, said. She joined Trinity Wealth as an intern in May 2017. Bradley went on to receive her degree in financial planning from Temple and joined Trinity Wealth full time in May 2018.
Thirty universities with financial planning majors were represented at LINC.
“For students in the room,” Wentz said, “Kelly was willing to do anything” even filling in when the firm’s operations manager left. “Kelly was so good that we didn’t fill the spot for six months … she was a sponge, young people are very good at technology,” she continued.
“Don’t sell [interns] short, they’re amazing.”
Added Moore: “We underestimate how talented these young people are … it’s a shame.”
Relaying a job experience at 24, Moore said he was fired from a planning firm after being asked “to go find $1 million clients. So, I sucked at my job. … what did I know” about $1 million prospects? he asked. Moore urged advisors to let interns work with “their peers or put them on a non-rainmaker track. Figure out their skill sets.”
Trinity Wealth doesn’t “have young people come into our firm and expect them to be rainmakers,” Wentz said. “We will have to teach them how to rain-make. But the more that they can take off our plate, the more time we have to rain-make.”
Another piece of advice, Moore said: “Variable comp for young people will not work. Outside of this room, most firms are ‘eat what you kill.’ It has to be a salaried position coming out of school.”
Washington Bureau Chief Melanie Waddell can be reached at firstname.lastname@example.org.