10 Smartest Things Heard at the TD Ameritrade Conference
Demographic shifts, technology implementation and investing challenges were in the spotlight this week in San Diego, where about 3,000 advisors and other industry professionals came together for TD Ameritrade Institutional’s annual conference. Between the presentations, meetings and hallway conversations, Financial Planning heard lots of smart takeaways for advisors.
Here are the 10 most interesting things that crossed our radar.
“We’re at a point right now where advisors need to take a step back [and] make dramatic strategic shifts,” said Tom Nally, president of TDAI, told Financial Planning. “They have great practices, but a lot of them don’t have great businesses – there’s no strategic plan, no succession plan.” It’s in TDAI’s interest to help light a fire under advisors. “If they start losing assets, we lose assets too.”
Not sure if your client is telling you everything? Ask for paperwork. “I always get a tax return from a client,” said Richard Kolb Jr., managing partner of Integrys Wealth Advisors. “A tax return will tell you everything you need to know about a client.”
Too many advisors bring junior advisors into the firm and then throw them to the wolves, said Christine Gaze, TDAI’s director of practice management. One advisor expected his junior advisors “to be accretive the minute they walked in the door,” she explained. Reality check: That’s not going to work, she said. Instead, she said, figure out a specific role for your new hires: “Recognize that a junior advisor should create capacity for senior advisors.”
It wasn’t something people expected to hear from a representative of the broker-dealer community, but there it was: “Everyone accepts that moving from a suitability standard to a fiduciary standard is moving to a higher standard and benefits investors,” SIFMA general counsel Kevin Carroll said at a sometimes tense panel discussion. The devil is in the details, of course; don’t expect SIFMA to make a full-court press toward a strict fiduciary standard. But Carroll -- to a skeptical audience -- argued that SIFMA simply wants more specific rules in place: “We want to develop rules and guidelines that will let broker-dealers operate under this model,” he said.
Mark Germain, CEO of Beacon Wealth Management, spoke Thursday on a “strategic alignments” panel; his own firm is in the due diligence process of a deal. “Everything they ask you for, it is in your purview to ask them ... You need to make it as unpleasant for firms you are considering as they make it for you.” One facet of the deal is particularly important, he added: “Understand how you can be eliminated.”
“Your goal should be to talk to three generations of each family you work with,” said David Kudla, CEO of Mainstay Capital Management. That may mean breaking from practice, he said. “Break your rules on your minimums to work with that son or daughter or granddaughter. Even if the younger [family] member has 30,000 or 40,000 in their account, consider bringing that account in.”
Advisors know they shouldn’t ignore half of their couple clients – but getting it right can be easier in theory than in practice. During a presentation on advising couples, Kathleen Burns Kingsbury got several questions from advisors whose male clients seemed to be keeping their wives out of the decision-making process. What to do? In those cases, ask the husband for permission to talk to the wife separately, she said – invite her to lunch, even, if she’s not interested in finances. And if he says no, appeal to his protective nature, she says – he’ll be helping his wife in the event something happens to him. “Don’t throw in the towel yet.”
“We are big believers in making sure our key people are properly aligned,” said Michael Nathanson, CEO and president of Colony Group. “In our judgment, best way to do that is make sure people have a piece of the pie.” At Colony, he said, once employees reach a certain level, they are able to buy equity. Now 36% of the firm’s staff are partners. “That’s been key to our growth,” he said.
Whether it’s a tax rule change or a market shift, don’t waste your staff’s time fielding the same question over and over again, cautions Lee DeLorenzo, president of United Asset Strategies. Whether you’re using email, a blog, phone or Facebook, jump on hot issues: “If more than one client calls about same thing, we will actively reach out.”
TDAI chief operating officer Marv Adams talked about a culture change he’s been implementing at the company: “It’s about showing every associate how they fit into culture of serving clients,” he explained. The end result, he said, is to have the entire organization engaged in identifying problems.