In National LINC keynote address, TD Ameritrade
Institutional President Tom Nally Highlights How RIAs Can Thrive in
a New Era
There’s a popular saying in business that “what got you here,
won’t get you there.” While a generation of trailblazing registered
investment advisors (“RIAs”) built their profession into the
fastest growing wealth management channel, advisors need to embrace
technology, build trust in the marketplace and attract new talent
if they want to stay on top, TD Ameritrade Institutional1 President
Tom Nally told advisors.
More than 3,000 independent advisors and industry leaders were
on hand to hear Nally’s motivational message and insights in a
keynote address today that kicked off National LINC, TD Ameritrade
Institutional’s 20th annual conference for RIAs.
“To keep their focus on clients in the way that has helped set
RIAs apart, advisors are going to need the right tools in place and
they’re going to need to adapt to a fast-changing business
environment,” said Nally. “RIAs can take advantage of the waves of
digital automation tools and ‘big data’ insights hitting the
industry right now. It’s a huge opportunity.”
Embracing Automation and Digital Advice Technology
Rather than feel threatened by technology that automates
investment management and other tasks, Nally said, RIAs should
embrace it. Not only can firms operate more efficiently with the
right tools, but automation can free valuable time that’s better
spent working with clients and building their businesses.
TD Ameritrade Institutional is helping advisors automate many
aspects of their businesses with award-winning tools and
technology. More than 1,700 advisors on the TD Ameritrade platform
are using iRebal® on Veo® to automate
portfolio management processes, Nally said, reducing the time it
takes to rebalance client portfolios from weeks down to a few
clicks.
Advisors can also benefit from the automation and built-in
workflows driven by Veo Open Access, TD Ameritrade’s open
architecture technology platform that recently reached a major
milestone. Today more than 100 technology providers, including 16
digital advice tools and “robo” services, have integrated their
applications and tools with Veo, offering advisors choice and
flexibility.
The next step, Nally said, is giving those integrated
technologies one, sleek home where they can all live and work
together. Veo One, TD Ameritrade Institutional’s
next-generation advisor technology platform, will give advisors
access to all of the CRM, financial planning, portfolio management
and other systems they use from one desktop. Currently being tested
by advisors and expected to be more widely available in the fall,
Veo One also will make RIAs more productive by enabling them to
move seamlessly from application to application while keeping
customer information in context.
Big Data. Big Opportunity
But Nally emphasized that installing the latest technology by
itself is not enough. To get the best possible results, RIAs need
to feed these systems heaping portions of market information and
competitive insights, and that’s what “big data” analytics is all
about: enabling advisors to benchmark their performance, identify
ways to better manage their businesses and source new growth
opportunities.
To help bring big data capabilities to advisors, TD Ameritrade
has agreed to acquire the assets of FA Insight, one of the
industry’s leading research and consulting firms. Through this
combination, TD Ameritrade and its clients will gain access to
benchmarking data going back more than a decade, consulting tools
and annual research reports. TD Ameritrade Institutional clients,
in time, will gain access to customized reports, giving them
greater visibility into their businesses so they can make more
informed decisions.
Articulating the Value of Advice
Technology advances have impacted the RIA space in another
significant way. The emergence of low-cost online advice platforms
has shined a spotlight on investment management fees. Nally said
RIAs, who provide a comprehensive range of wealth management and
financial planning services, need to do a better job articulating
what they bring to the table.
Traditional pricing strategies, typically an investment fee
based on assets under management, don’t truly reflect the value of
services rendered and leaves RIAs more vulnerable to fee
compression. The challenge, he said, is to tell a better story
about the value of comprehensive wealth management. Morningstar
research, he noted, shows that good planning decisions —separate
from market outperformance — can increase an investor’s retirement
income by as much as 29 percent.2
“We need to shift the conversation from a focus on the price of
advice to talking about the value that RIAs deliver to clients
through good planning,” Nally said. “Research shows that objective
advice and having a personal connection is more important to
investors than price or beating the market.”3
Building Trust and Talent
The RIA industry needs to tell its story directly to more
consumers. That’s one reason why TD Ameritrade Institutional has
launched the Human Finance Project, a campaign that has encouraged
hundreds of advisors to share their personal experiences in video
recordings.
These stories and experiences, which TD Ameritrade Institutional
will share through social media and other channels, could go a long
way toward showing consumers why RIAs are a different breed of
financial guide and the difference they can make in their financial
lives.
“When you consider that public trust in financial services is
low, even lower than chemical companies, you see there’s a real
need for RIAs to differentiate themselves and do a better job of
telling their story,” Nally said.4
Advocacy Agenda and Online Action Tool
One area in particular where RIAs need to tell their story is in
Washington, where a number of issues that can impact the industry
are being debated. One of the urgent issues at hand is the pace of
Securities and Exchange Commission advisor examinations – currently
once every 10 years on average.5
This lack of oversight “is a powerful talking point our
competitors use to sell against RIAs and we need to take it off the
table,” Nally said. “It's really important that advisors act as
their own advocates on this one, because trust and confidence is on
the line.”
To make it easier for advisors to stand up and be counted on
this and other issues, TD Ameritrade created the Advocacy Action
Tool, through which advisors can send messages directly to
representatives in Congress.
Reaching for NextGen
The industry must also find ways to elevate its reputation among
the Millennials – a generation of that came of age during the
financial crisis. Fact is, this same group of more than 70 million
Americans is now the single biggest generation6 and the expected
heirs to trillions of dollars7 in wealth. RIAs must turn this next
generation into its next clients if it hopes to sustain the
industry.
At the same time, the industry faces a dramatic shortage of
advisors because too few Millennials are ready to replace a wave of
baby boomers heading into retirement.8 Nally told attendees that
RIAs must expand their efforts to foster and hire a new generation
of advisors.
For the past six years, TD Ameritrade Institutional has led the
way by inviting undergraduates to its national conference, and
committing to award $2 million in scholarships and grants over ten
years to encourage more students to choose financial planning as a
profession.
Last November, TD Ameritrade Institutional agreed to be the
lead, founding sponsor of the CFP Board’s new Center for Financial
Planning and made a multimillion dollar contribution. Nally
explained the Center has the capacity to rally a broad array of
organizations to foster next generation talent, elevate the
academic standing of financial planning and address the lack of
diversity. A cooperative effort across the financial services
industry can achieve these aims faster than any one company on its
own.
“It’s been an amazing run so far, but now we as an industry have
the responsibility to strengthen and defend the profession for
future generations,” Nally said. “That responsibility includes
maintaining investor confidence, building trust and expanding the
pipeline for talented new advisors.”
About TD Ameritrade InstitutionalTD Ameritrade
Institutional is a leading provider of comprehensive brokerage and
custody services to more than 5,000 fee-based, independent
registered investment advisors and their clients. Our advanced
technology platform, coupled with personal support from our
dedicated service teams, allows investment advisors to run their
practices more efficiently and effectively while optimizing time
with clients. TD Ameritrade Institutional is a division of TD
Ameritrade, Inc., a brokerage subsidiary of TD Ameritrade Holding
Corporation.
About TD Ameritrade Holding CorporationMillions of
investors and independent registered investment advisors turn to TD
Ameritrade’s (Nasdaq: AMTD) technology, people and education
resources to help make investing and trading easier. Online or over
the phone. In a branch or with an independent RIA. First-timer or
sophisticated trader. Our clients want to take control, and we help
them decide how - bringing Wall Street to Main Street for more than
40 years. An official sponsor of the 2014 and 2016 U.S. Olympic and
Paralympic Teams, as well as an official sponsor of the National
Football League for the 2014, 2015 and 2016 seasons, TD Ameritrade
has time and again been recognized as a leader in investment
services. Visit TD Ameritrade's newsroom or amtd.com for more
information.
Brokerage services provided by TD Ameritrade, Inc., member FINRA
/SIPC
Access to the Veo platform’s open access capabilities is
provided as a service to independent advisors using the brokerage,
execution and custody services of TD Ameritrade. Veo Open Access is
an indication of potential programming compatibility. It does not
imply any TD Ameritrade, Inc. recommendation of, endorsement of,
warranty of, or fitness for use of any third party’s products or
services. TD Ameritrade is not responsible for information,
opinions or services provided by a third party. Since TD Ameritrade
must ensure that all vendors meet security requirements,
integration with new vendors is not immediate and cannot be
guaranteed. The CFP Board is separate from and not affiliated with
TD Ameritrade, which is not responsible for their services or
policies. iRebal products and services property of ThinkTech, Inc.,
an affiliate of TD Ameritrade, Inc.
1 TD Ameritrade Institutional is a division of TD
Ameritrade, Inc., a brokerage subsidiary of TD Ameritrade Holding
Corporation. 2
Alpha, Beta and Now Gamma, Morningstar
Investment Management, 2013
3 TD Ameritrade Investor Survey, September 2015 (not yet published)
4 Edelman Trust Index, 2015 5 Securities Exchange Commission, FY16
Budget, Request by Program (p. 67) 6 Pew Research Center,
tabulations of U.S. Census Bureau projections, released December
2014 7 A Golden Age of Philanthropy Still Beckons: National Wealth
Transfer and Potential for Philanthropy Technical Report, Center on
Wealth and Philanthropy (CWP), Boston College, 2014 8 Cerulli
Advisor Metrics, 2015
Source: TD Ameritrade Holding Corporation
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version on businesswire.com: http://www.businesswire.com/news/home/20160204005252/en/
TD Ameritrade Holding CorporationJoseph Giannone,
201-369-8705Communications + Public AffairsM:
201-725-8584joseph.giannone@tdameritrade.com
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