TD Ameritrade executives kicked off their annual RIA conference with an assurance that they are not in the business of competing for advisors’ clients.
Head of a company that itself has roots in serving retail investors fresh off its acquisition of discount brokerage Scottrade, Tim Hockey, TD Ameritrade’s president and CEO, promised in San Diego on Thursday that his company was not seeking to compete with the RIAs.
“We have an unmatched set of tools to empower individual investors, but for those who want to hand over the reins, that’s where you come in,” said Hockey. “We believe RIAs are the best solution for individuals and families who want and need a comprehensive relationship. Bottom line: We are not going to try and compete in the same space as RIAs.”
Hockey was perhaps taking a lesson from a competitor. At Charles Schwab’s most recent Schwab IMPACT conference, executives were pelted with questions about marketing and strategies that appeared to target the same clients and prospects that advisors desired to serve and retain.
Hockey said that in discussions with RIAs, in addition to a desire for more support and better technology from custodians, advisors also expressed a concern that the very firms they looked to for custodial services would also be their direct competition.
“We’re going to refer to our growing network of RIAs,” said Tom Nally, president of TD Ameritrade Institutional. “I want to make sure that everyone understands that this is not just about referrals. It’s also about the critical strategic importance of the institutional business to TD Ameritrade. ... We can serve millions of clients across a full spectrum of services.”
Hockey added that TD Ameritrade’s institutional business was responsible for about 70 percent of its revenues.
According to Nally, the market turmoil of late 2018 took a sizable bite out of those revenues.
“2018 was a year of uncertainty and you could even say quite a bit of turbulence,” said Nally. “It’s compelling more investors to seek out the steadying hand of an RIA,” and the RIA channel grew assets and clients by about 18 percent for the year."
Yet between December 3 and January 3, the S&P 500 was down more than 12 percent, said Nally, and dragged advisors’ asset levels down with it. Between the S&P 500’s peak on Sept. 20 to its floor on Dec. 24, total RIA assets declined by $550 billion.