TD Ameritrade Institutional: Elite LINC 2015: Advisers must brace for volatility

It's nice to be one of TD Ameritrade Institutional's "elite" financial advisers. I know because I am hanging out with 168 of them at TDAI's Elite Adviser Summit at the uber swank Grand Del Mar Resort in San Diego, Calif. Not only are they getting treated like adviser royalty, but they get to mix and mingle with one another and TDAI's top brass, including president Tom Nally, and TD Ameritrade chief executive Fred Tomczyk. The three-day gathering brings together financial advisers from 150 firms representing $170 billion in assets under management. My back-of-the-napkin calculations puts that at about $1.13 billion per firm . . . hence the word "elite" in the name of the meeting. Among the firms represented are Beacon Pointe Wealth Advisors, Savant Capital, Abacus Wealth Partners, The Colony Group, Regent Atlantic Capital, Modera Wealth Management and Brookstone Capital Management.

VOLATILITY COMING

The summit started Tuesday afternoon with a conversation with Mr. Tomczyk and Mr. Nally. The conversation, which was was moderated by Yahoo Finance senior columnist and CNBC contributor Michael Santoli, touched on a wide range of topics, including the economy, the markets, breakaway brokers and investment adviser regulation. But Mr. Tomczyk set the tone right at the beginning when he warned advisers to brace for more volatility in the markets as central banks around the world begin to unwind the fiscal stimulus they put into the markets. "There is no way Federal Reserve, or the banks around the world, are going to be able to unwind this and not be increasing volatility in the makets," he said. "We should all expect choppy markets." Mr. Nally picked up the baton by noting that financial advisers are "all in" the markets right now. A recent survey of advisers on TDAI's custodial platform found that the average adviser was only 7% invested in cash, marking a record low. Mr. Nally also opined on the debate in Washington over a uniform fiduciary standard. Without using the word "hog wash," he called the debate hog wash. That's because the rules and regulations are already in place to prevent brokers from positioning themselves financial advisers. "The regulations that exist today are perfectly fine," he said. "They are just not being properly enforced. They are allowing people that fall under broker-dealer rules to act as advisers."

ROBO-OPPORTUNITY

And, of course, no conversation among adviser big wigs would be complete with mention of robo-advisers. Both Mr. Nally and Mr. Tomczyk conveyed the message to attendees that robo-advisers present more opportunity than challenge. They urged advisers to up their game when it comes to the digital offerings they make available to clients to seize the opportunity to use robos to attract and retain nascent wealth accumulators.