Wirehouses 'turning their backs' on small producers

The stock market may be on the slide, but TD Ameritrade chief executive Fred Tomczyk has some surprising advice for his top advisers. “I would still invest in the U.S.” he said. His reasoning? “I'm seeing more [foreign] shareholders in TD Ameritrade now … I find Europeans are afraid to invest in Europe — they want to invest in the U.S.” Another trend Mr. Tomczyk is seeing: the disenfrachisement of less sizeable teams at wirehouses. The TD boss said wirehouses are responding to the needs of their biggest teams, “but there's still a breakaway trend for the sub-billion-dollar breakaway." That thought was echoed by Thomas Nally, head of TD Ameritrade Institutional. Mr. Nally said wirehouses are “turning their backs on small producers so we continue to see people walking out the door.” RELATED ITEM The latest exits from MSSB The two men made their remarks to a group of 160 TD-affiliated advisers Tuesday at the firm's Elite Summit in Laguna Beach, Calif. Advisers at the gathering manage more than $85 billion in total. As for the economic outlook, Mr. Tomczyk said America's financial system has “significantly deleveraged.” He added that “the risk/return in the U.S. is probably the safest” among developed nations. He did caution that the U.S. still needs to see more political leadership and predicted it's going to be a long slow recovery. "We probably need some more short-term stimulus, with a credible long-term plan to deal with the deficit,” he said. He added that too much new regulation could be a drag, but policymakers “clearly have to deal with capital and liquidity in the banking system,” as well as mortgage markets and money market funds.