Tom Bradley, president and chief executive of TD Ameritrade Institutional, is still hopping mad that Sallie Krawcheck, president of global wealth and investment management at
Bank of America Corp., dissed independent registered investment advisers during an appearance on CNBC last month. To boot, he's a little ticked at CNBC too.
Without referring to Ms. Krawcheck or her company by name, Mr. Bradley, went through the transcript of what she said sentence by sentence in a presentation he made to advisers at TD Ameritrade's annual conference today.
Particularly offensive, he said, was the way “the executive,” as he called Ms. Krawcheck, said that registered representatives at a firm such as BofA have the backing of a strong financial institution — even though, he pointed out, both BofA and Merrill Lynch & Co. Inc. took funds from the Troubled Asset Relief Program. Even more galling to Mr. Bradley, perhaps, was that Ms. Krawcheck said that Bernard Madoff was an independent registered investment adviser.
“I'm watching this thing in my office,” Mr. Bradley said, “and I'm jumping out of my chair waiting for the push-back from CNBC,” he said, which didn't come. “I want to be on there,” he said. “I want to be quoted talking about the advantages of the independent RIA marketplace.”
He also pointed out that CNBC didn't choose to cover the TD Ameritrade conference. “The bums,” he quipped.
Speaking to an audience of close to 1,000 of his customers, Mr. Bradley pointed out that independent RIAs have made gains in the financial advice marketplace, but he warned that the game is far from over.
“Their backs are up against the wall,” he said, referring to brokerages, “and they're trying to fight back, and they're not always playing fair.” We have momentum, but there's a head wind, and the head wind is more competition. They're down, they're wounded, but they're not dead.”
To preserve what he sees as an advantage, independent RIAs have to be “proactive,” he said, and “explain the independent RIA model.”
For its part, Mr. Bradley said, TD Ameritrade Institutional will help by providing more support for RIAs in the coming months, including providing more choices in fixed-income investments, which remain popular after the financial crisis, and more education and tools for options investing.
“We're building out our fixed-income program,” Mr. Bradley said. “We're looking to take that to a whole new level,” he said. By partnering with TD Securities in New York, he said, TD Institutional plans to offer more new issues, and current issues at better prices. “More to come on that,” he said.
And since there's been an increase of 125% in options investing over two years, there's a need for advisers to have more education, tools and choices.
Options can “generate more income in a portfolio,” he said, and “protect the downside,” but “you can get into a lot of trouble with options if you don't know what you're doing.”
TD Institutional likely will use its thinkorswim platform to provide some education tools for RIAs, he said.
“By the time we get into the summer, we should be able to deliver some very good product in this area,” he said.
On the regulation side, TD Ameritrade is keeping tabs on the debate in Washington. Paramount, he said, is making sure that the “high fiduciary standard that you are held to is maintained” and that other individuals who are providing advice are “also held to the high standard that you are held to.”
Custodians, he stressed, should not be in the business of overseeing independent RIAs, he said. “We don't want to be in the position of having to check up on you,” he said. “That's your territory, and we don't want to go there.”
The question of which regulatory body would oversee RIAs is an open one, but Mr. Bradley hinted that the
Financial Industry Regulatory Authority Inc. may still be a possibility. “We know that Finra is very much interested in being your regulator, he said. “We're staying on top of that and will keep you informed.”
In response to a question on TD Ameritrade's views on dual registration, Mr. Bradley responded: “We think it's a conflict, and we don't agree with it.”
TD Ameritrade executives said that 1,200 advisers are present at the firm's annual conference, which is taking place in Orlando, Fla., this week.
