TD won't compete with RIAs, execs say

Company won't enter businesses that involve "being all things to all people," such as financial advisory branch offices, Nally says

Feb 8, 2019 @ 9:21 am

By Jeff Benjamin

When TD Ameritrade rolled out its top-level executives Thursday at its annual LINC conference in San Diego, they wasted no time in underscoring the big custodian's commitment to registered investment advisers.

"We believe RIAs are the best solution for families and individuals, and we are not going to try and compete in the same space as RIAs," said TD Ameritrade CEO Tim Hockey.

The statement, which was welcomed with enthusiasm by the audience of several hundred financial advisers, was part of a presentation about the company's effort to determine what the adviser community wanted.

"The message that came through loud and clear from RIAs was, 'Don't compete with us,'" Mr. Hockey said. "You deserve to work with a firm that works with you, not against you. Our strategy is clear, we will not compete with you."

The statement from Mr. Hockey, who was joined on stage by TD Ameritrade Institutional president Tom Nally, was both a slight jab at other custodians that have gone into businesses competing with RIAs, and a kind of final word on the topic.

In a followup interview with Mr. Nally, he said it was important to clarify that TD Ameritrade is not considering business lines that would constitute "being all things to all people," including TD financial advisory branch offices.

"There's been a lot of folks, as we've grown, who were wondering if we were going to start to do what our competitors are doing," he said. "And there was a time over the past few years when we didn't have our strategy crystallized about how we would compete in the retail space."

Mr. Nally acknowledged that, "As we were growing, there was some thought in the organization that we need to go up-market and be all things to all people."

(More: Schwab reassures RIAs its brokerage advertising won't take business away from them)

The concerns over the direction of TD Ameritrade were "bubbling up" even before its acquisition last year of Scottrade, which catered to self-directed investors, he said.

"We've been hearing it for years, and there was a little bit of ambiguity about who we wanted to be when we grow up," Mr. Nally said. "We're not going to build capabilities that compete with RIAs."

For some RIAs attending the annual conference, the news was welcome, even if they weren't fully aware of the original concern.

"It's good news to hear, but I never thought they were considering working against us," said Brian Lock, an adviser at Beam Asset Management.

Carolyn McClanahan, founder and director of financial planning at Life Planning Partners, said TD's declaration that it wouldn't compete with RIAs was "fantastic."

However, Ms. McClanahan said, she had never considered the Scottrade acquisition as a step toward competition.

(More: Don't be afraid to raise advisory firm fees)


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