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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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TD Ameritrade Holding CorporationJoseph Giannone, 201-369-8705Communications + Public AffairsM: 201-725-8584joseph.giannone@tdameritrade.com