PALM BEACH, Fla. -- Demographic shifts are coming, and advisors need to prepare or they'll be left in the dust, according to two TD Ameritrade executives.  

At the firm's Elite Advisor Summit, which kicked off Tuesday, TD Ameritrade CEO Fred Tomczyk and Tom Nally, president of TD Ameritrade Institutional, tackled the topic of demographic shifts and how advisors will react to such changes.

"Quite frankly, adivsors are not doing a good enough job preparing for these shifts," Nally said in an interview. "There's going to be a new paradigm in terms of opportunities for advisors, but most advisors aren't doing a good enough job bracing for them," he said. "If we go down the current road, we're going to be in a lot of trouble."

Tomczyk and Nally outlined a handful of other top concerns they have about the industry, detailing the best ways to keep advisors (and their clients) ahead of the game and prepared for a turbulent economic environment and huge transfers of wealth ahead. 


Today, the independent advice model is the fastest growing segment of the financial services industry, research shows. In April,, a careers website, said financial planning ranks fifth among 200 professions as one of the best jobs in 2013. The salary median of financial planners, according to the U.S. Bureau of Labor Statistics: $64,750. Projected growth rate of the industry stands at 32%.

Yet, in the eyes of young people, the industry's reputation still suffers from the affects of the financial crisis. With the average advisor in their mid-late 50s, financial planners are not doing a good enough job engaging with students and younger advisors, according to Tomczyk and Nally.

In response to the aging advisor base, TD Ameritrade is leading efforts to head-off a potential talent shortage by encouraging college students to consider careers in financial planning, accepting applicants for the TD Ameritrade Institutional Next Gen Scholarship and Financial Education Grant Program. The first batch of scholarships and grants will be awarded to students in August. 

Still, both Tomczyk and Nally said they worry about a continued talent shortage if advisors fail to recruit a new generation of advisors. 


Tomczyk and Nally expressed concern about proposed regulatory changes to advisor oversight. On one hand, they said, advisors should be supporting regulation. "A lot of people were stuffing their mattresses after the financial crisis, and we need the right investor protections to restore confidence," Nally said. 

Yet, additional layers of oversight are often expensive for advisors and don't necessarily add much value, Nally said. "Someone has to stand up and advocate for RIAs -- that's our leadership role." 


Many advisors aim to do too much too fast, according to Tomczyk, outlining four key steps that every advisor should follow to thrive. 

  1. Put your client first. 
  2. Think through opportunities and problems in a rigorous fashion. 
  3. Surround yourself with good people on the same page. Too often we underestimate the importance of corporate culture. 
  4. Prioritize and focus on what's important and what's not. 

"Stick to your plan on what you're NOT going to do. Otherwise you get a whole lot of nothing done," Tomczyk said. 

It's become a buzzword in the advisory space. "Every year we see tragic situations happen to advisors where they don't have a plan in place," Nally said. 

The numbers speak for themselves. A survey conducted earlier this year by SEI showed that 68% of 100 advisors surveyed had no plan for selling their firms or passing them on to succeeding generations; 54% had no plan for attracting younger investors.

Of the 32% of advisors with succession plans, 39% said they are not sure whom they will transition their firm to; 47% plan to sell to an identified internal buyer; and 14% plan to sell to an outside buyer, according to the SEI survey.

To avoid the last minute realization of lacking a succession plan, develop a plan 15 years you're about to retire, not two years before, TD Ameritrade's executives said. 

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