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2019 IA25 Custody and Clearing Winners

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Two custodial and clearing firms are big winners as the 2019 leaders and influencers in this category.

TD Ameritrade CEO Tim Hockey is the top vote-getter, followed by TD Ameritrade Institutional CEO Tom Nally and TD Trust head Skip Schweiss, who also is managing director of advocacy and industry affairs.

From BNY Mellon | Pershing, other top vote getters are Pershing Advisor Solutions CEO Mark Tibergien and BNY Mellon | Pershing CEO Lisa Dolly; Dolly is a new IA25 member in 2019, while the other four VIPs are repeaters. Recently,

Hockey explained that when he was put in charge of 7,000 TD Ameritrade employees in 2016, he decided to write a user’s guide about himself and share it, so that his team had an inside look at what’s shaped him and what he expects of both himself and other people.

The text included “quick hit” bullet points, such as, “I never yell, ever. And that speaking truth to power wins you points every time,” he wrote on Fast Company’s website. Two gripes: He doesn’t like long PowerPoint presentations and when people show up late for meetings.

Hockey continues to “clarify and define” himself for employees and clients. He assured a group of advisors at the firm’s National LINC event that TD Ameritrade is “not going to try and compete in the same space as RIAs.”

The CEO added: “You offer a range of services to clients that quite simply we’re not going to try to emulate. 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.”

The avid bicyclist also told the audience that the firm was a founding member of the Member Exchange, which he hopes will help advisors. “We’re working with eight of the other leading financial institutions to launch this exchange, with the goal to improve transparency, reduce costs and simplify the execution of U.S. equity trading, which will be beneficial for institutional and retail clients.”

TD Institutional’s Tom Nally, who received the second-most votes in this category, also spoke at the National LINC conference in February and highlighted trends in the business. For instance, he pointed out that technology continues to be the biggest investment area for advisory firms followed by marketing and compliance.

Nally warned the audience that advisors must be well trained in how to use the technology. He also cautioned that advisors need to keep attracting clientele: “It’s absolutely critical that you are replacing aging clients with new generations of clients.”

Skip Schweiss focuses on the regulatory aspects of TDAI’s business. In February, he told IA, “While raising the standard of care for investors can’t be a bad thing,” his concern is that the Securities and Exchange Commission’s proposed Regulation Best Interest has “the potential of making brokers and investment advisors look the same when they’re not.

“Or even further blur the line between brokers and investment advisors. We believe there should be brokers and investment advisors — they serve different purposes, they get compensated in different ways, and that’s all fine,” he said.

He added that “consumers should have a relatively easy way of telling the difference and making informed choices.” He says Reg BI’s “proposed four-page disclosure document … has not been viewed by commenters as neither clear nor simplistic.”

BNY Mellon | Pershing’s Mark Tibergien continues to provide advisors with powerful insights on how they can move their businesses and careers forward, making the monthly IA columnist a much sought-after thought leader.

When you look at the advisory marketplace, “You can see [the] evolution toward a fiduciary model, regardless of [the DOL’s court-blocked regulation] or the best-interest contract. It’s behavior, not rules, that’s changing the way in which [RIAs] think, because they have to engage clients differently,” he said.

This, he added, has been highlighted by a recent Cerulli Associates survey, which estimates that the RIA segment of the retail financial services business will be 30% of the marketplace by 2020. Today, it’s about 21%.

A fresh face on this year’s IA25 list, Lisa Dolly serves as CEO of Pershing, as chair of Pershing’s Executive Committee and as a member of BNY Mellon’s Executive Committee. She told the audience at last year’s Insite conference that there are several trends they should prepare for.

These trends include: (1) Bigger is better. “We should expect there will be much greater concentration of assets in fewer broker/dealers and RIAs.” (2) Life management is more important than investment management. That is, investors want “holistic” advising, not just asset management. (3) Technology has yet to be fully exploited.

“Our industry is lagging way behind” in the use of automation, robotics, self-service, artificial intelligence and biometrics. And (4) the talent shortage will become more severe. “We should expect labor costs to increase and a significant need for technology to solve that problem.”