SAN DIEGO — Joseph Moglia’s proclamation that his company is spending big money to align the TD Ameritrade brand with thoughtful investment advice drew initial applause from financial advisers listening to the Omaha, Neb.-based company’s chairman and chief executive at its Partnership 2007 conference here last week.
But a slew of questions followed the cheers as advisers realized that such a policy may begin to blur the lines between their custodian and its primary competitors — who many advisers shun.
The $150 million being spent by TD Ameritrade to reposition its brand aligns it more with Schwab Institutional and
Fidelity Investments, advisers said.
TD Ameritrade traditionally has veered away from an advice orientation at the branch level, but Mr. Moglia believes he faces an overarching problem if he fails to explore opportunities to do precisely that. “I think I would not be living up to my fiduciary responsibility as CEO of the company,” he said at the opening speech of the conference last Thursday.
An adviser from Glen Rock, N.J., asked whether TD Ameritrade would try to wear two hats: one as a custodian, the other as an adviser.
“We’re going to try to do both,” Mr. Moglia said. “I think we’re in the mass-affluent business, and you’re in the high-net-worth business.”
Advisers noted that this is more-pronounced corporate hairsplitting than TD Ameritrade has engaged in during past conferences.
“Did the CEO of TD set up the moral infrastructure to become competitive with financial advisers? Yes,” said Gerald Levin, a conference attendee and president of GBL Asset Management Inc., which manages $30 million from Huntingdon Valley, Pa.
Tempered ambitions
But J. Thomas Bradley Jr., president of TD Ameritrade Institutional of Jersey City, N.J., downplayed his boss’ comments in an interview.
“Joe is talking about serving people with a do-it-yourself bent,” he said. “I can’t predict the future way, way out, but we have no solution remotely close to [what an adviser offers a client].”
This characterization of TD Ameritrade’s tempered ambitions rings true, Mr. Levin said.
But one adviser in the audience questioned Mr. Moglia’s idea of divvying up the advice market. High-net-worth investors receiving asset allocation advice at TD Ameritrade’s branches might be under the impression that they are being served at a high level — regardless of whether it’s designed for the mass affluent.
Meanwhile, Mr. Moglia sought to appease advisers who quizzed him sharply after he boasted that TD Ameritrade had earned the
93rd position on Forbes 400 best-business survey.
One adviser noted that the award was related strictly to call centers serving retail clients, and he demanded that service to advisers from call centers be raised to that level.
“Right now, I’m not pleased where our service is,” Mr. Mog-
lia said, promising to make improvements.
Several larger advisers said that TD Ameritrade had no need to apologize for its famously good and flexible service.
This apparent disconnect between the service-level reviews of larger and smaller advisers can be explained, Mr. Bradley said.
“Our volume is so huge, we’re hiring a significant number of people who serve advisers. Ameritrade had a lot of smaller advisers, so that added to [TD’s institutional] volume, [and so there’s still some catch-up going on].”
This leaves bigger advisers unscathed.
“Bigger advisers are served in a different way,” Mr. Bradley said.
