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Financial advisors have nothing to fear from TD Ameritrade’s recently announced Personalized Portfolios service for retail clients, says Chief Executive Officer Tim Hockey.
In an interview with Wealthmanagement.com at the firm’s recent Elite Linc conference in Colorado Springs, a gathering of 275 of the custodian’s top financial advisors, Hockey said the introduction of the managed account service, which pairs a retail client with a TD Ameritrade financial consultant to construct goals-based investment portfolios, is meant more to fill an “advice gap” for the company’s traditional do-it-yourself investor who doesn’t want the full engagement with an independent advisor.
“There are so many clients we refer to the RIAs,” he said, mostly via the AdvisorDirect program, but only 30 percent of the retail clients actually take the referral and sign up with the independent advisor. “So we know there is an advice gap.”
Hockey said the new service, just announced earlier this month, is not meant to compete with the over 6,000 independent advisors that custody on the TD Ameritrade Institutional platform, largely because those advisors provide a lot more value for clients than bespoke investment management.
“There is still disproportionate room, particularly as our advisors are going more and more upstream,” he said, and engaging with clients whose needs go far beyond portfolios. The real value of human advisors is not scalable, he said. “Technology is taking...