Scottrade Advisor Services has been a custodian for registered investment advisors since 2005, and while its profile is more low-key than that of some of its larger competitors, the St. Louis-based company has been successful by focusing on the state-registered advisor market. Today, Scottrade serves about 1,000 financial advisors, which ranks it roughly in the middle of the pack in the custodian space.
Brian Stimpfl, senior vice president and head of Scottrade Advisor Services, discussed with Financial Advisor his company’s efforts to broaden its services and the client base it serves.
FA: What’s your company’s value proposition?
Stimpfl: We excel in our service model both on the retail and institutional side. That model extends to a much lower threshold on the advisor side. For example, our top service tier that entails a personalized, one-to-one service team experience, starts at $50 million under custody. With the other competitors that I know of in our space, you would be hard-pressed to get that level of service anywhere below $250 million or $500 million under custody.
We can do this because we’ve mainly been focused on smaller advisory firms. Now that we’re looking more at what I’d call emerging SEC [-registered] advisors with between $100 million to $500 million in assets under custody, we can offer a higher level of service to a lower number of advisors because we’re not servicing as many advisors as our larger competition does. In addition, we’re employing call center technologies within our service group to provide our custodial services in a very efficient and optimized way with those service levels.
FA: So you’re changing the focus on the types of advisors you serve?
Stimpfl: The word I’d use is “broadening.” We’re still very interested in servicing state-registered advisors, and they remain the greatest number of advisors we have on our platform. We have clients with assets ranging from a few million dollars to up to billions of dollars.
I think the industry does itself a bit of a disservice in trying to bucket things in terms of assets under management. The bigger opportunity for custodians and clients is where can I place my assets and get all of the things I need to do business. It’s a capability set, so when we look at advisor firms with hundreds of millions, if not billions, of dollars under management, the first question we ask is, can we service that advisor? Are they looking to do things that Scottrade can do well? If the answer is yes, we’ll seek to do business with that firm. The same goes for an advisor who manages just a few million dollars.
FA: In recent years, Scottrade has bolstered its platform with products from the likes of Redtail Technology, MoneyGuidePro and Laser App Software. What have you done lately to strengthen your platform?
Stimpfl: The newest thing is a growth program we launched with ActiFi in 2015. We asked our advisors where would you spend on your business if you had an extra dollar to spend? The top answer was “growth.” We got the survey results by August, but we made the decision in the beginning of the year to double down to help our advisors grow, so we brought on board ActiFi, who we think are some of the best experts on practice management in the space, for engagement with advisors, and we did a four-city tour where we did full-day seminars on how advisors can utilize different tactics, strategies and tools to help position their firms for growth. That’s the latest partnership we have, and I expect to continue that partnership on other practice management opportunities. I think there are a lot of opportunities for us to be better partners for practice management initiatives for our advisor base.