TCA by E*Trade lures Edelman Financial Engines with promise of client referrals

Access to clients through E*Trade's 30 branch offices drew the attention of RIA Edelman Financial Engines

Nov 13, 2018 @ 3:06 pm

By Jeff Benjamin

TCA by E*Trade is claiming to have hit the jackpot with its pending adviser referral program attracting Edelman Financial Engines, one of the nation's largest RIAs.

While both the $20 billion custodian and the $200 billion advisory behemoth aren't saying how many, if any, of Edelman's advisory assets will be moving to the custodial platform, the custodian is calling the Edelman connection evidence of the success of the April combination of E*Trade and Trust Company of America.

"This is the proof of whether the brand of E*Trade will provide the liftoff for TCA," said Josh Pace, TCA by E*Trade president. "Edelman is a validation of what makes TCA by E*Trade great."

Since the $275 million acquisition of TCA by discount broker E*Trade, Mr. Pace generally avoids specifics, but he said Edelman's assets are part of the $12 billion that is currently committed to the custodian by various RIAs.

Edelman declined to comment beyond a statement from chief operating officer John Bunch that focused on the soon-to-be-launched referral network.

But two sources familiar with the situation said Edelman is not planning to move assets to the custodial platform, which suggests TCA by E*Trade might be relying on new Edelman account assets coming through the referral network.

Edelman's current primary custodial relationship is with TD Ameritrade.

A TD Ameritrade spokesman declined to comment for this story.

According to Mr. Bunch, the connection to TCA by E*Trade is related to the E*Trade Advisor Network, which is expected to launch later this year and refer clients from E*Trade's 30 branch locations to advisers in the program.

"Joining the E*Trade adviser referral network expands our access to investors who are looking for a more comprehensive financial planning experience that includes budgeting, estate planning, Social Security guidance, dedicated planners and more, to really help them bring together all the financial pieces of their lives," said Mr. Bunch in an emailed statement.

"We want investors to feel more confident about their financial futures," the statement continued. "Our network of 325 planners in 180+ offices nationwide provides E*TRADE referrals with a unique personal financial plan and portfolio to help them reach their goals."

Mr. Pace said there will be "substantial details" about the new referral program by the end of the year.

In the meantime, he confirmed that not all registered investment advisers working with TCA by E*Trade will qualify for the referral program.

"E*Trade has a commitment to do-it-yourselfers, but the piece missing was the notion of an end client of E*Trade seeking to work with an adviser," Mr. Pace said. "The branch advisers are aware of clients that might need a full-blown adviser."

Regarding the criteria for qualifying as an RIA to participate in the referral program, Mr. Pace would only say, "some legacy TCA advisers may qualify, and some may not."

Mr. Pace sees the relationship with Edelman Financial Engines as momentum that will push the custodian to the next level.

"We stood before the people at Edelman with great technology, great service and a growth engine that supports both of us," he said. "Our sweet spot used to be advisers with $150 million or $200 million, but we've been onboarding at a steady clip, and of bigger size since the acquisition."

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