Tom Bradley and Fred Tomczyk team up to give forward-looking state-of-the-TD Ameritrade speech

Brooke’s Note: This article would not have been possible without stand-in reporter-at-large Timothy Welsh taking a bunch of legible notes and getting them to me to write as this posting. Welsh is a fellow Marin County resident who owns Nexus Strategy LLC, which helps companies better understand how to market to RIAs. He’s also the former director of marketing of Schwab Institutional.

Giant snowstorms are barreling down the East Coast and the economy looks stormy as ever, but the mood at TD Ameritrade Institutional’s big conference is sunny.

Attendance is up 30% from last year at the conference at the Rosen Shingle Creek Hotel in Orlando.

“Over 2,000 people – 1,200 RIAs officially makes us the largest conference in the RIA industry,” says Tom Bradley, president of TD Ameritrade Institutional.

“There’s a lot of buzz, a lot of people here,” says Timothy Welsh, principal of Nexus Strategy LLC of Larkspur, Calif., who took notes for RIABiz that went into the writing of this article.

A mutual fund executive in attendance sent me this e-mail: “So far the buzz is extremely positive, I think we’re all a bit surprised,” he says.

The Clinton-Bush act

Among the reasons for the uptick in buzz and attendance are two of the speakers: Bill Clinton and George W. Bush. The session –held in a cavernous room — was a huge hit.

Advisors waited for up to a half hour outside the room to get in to hear them. The two men offered insights and acted in an affable amiable fashion toward each other, though they became more serious on the topic of the financial crisis. “I swallowed my ideology” when we bailed out the banks, Bush said.

Clinton offered a plan: “If we set aside $15 billion and let banks lend on it 10 to 1 with a federal guarantee, that would create $150 billion for energy efficiency construction, every $1 billion creates $7,000 new jobs and unemployment in construction is 17% right now. That’s the kind of programs and thinking we need,” he said.

Other reasons why the TD conference is jam-packed are well-summarized in this RIABiz article about TD’s emergence after its major mergers: TD Ameritrade revs up to have the biggest three-day rally in its history

Registration free

One of the big reasons for TD’s big attendance in Orlando may be free registration. In these economic times RIAs and providers alike are happy to save fees that are usually several hundred dollars to $1,000 at competitors. Putnam Funds is the Diamond sponsor of the event.

After some funny remarks by TD managing director Skip Schweiss [and former head of Fiserv ISS], Fred Tomczyk, who has been president and CEO and president of TD Ameritrade for a year and a half after taking over from Joe Moglia, gave an overview of his company as a whole. Its net new assets grew from $12 billion in 2007 to $23 billion in 2008 and $27 billion in 2009.

He added that 2010 is off to a fast start with $9 billion of net new assets so far.

Some credit for the strong asset gathering goes to a shift to a sales and service culture and “upselling” across channels. For instance, $3 billion of net new assets could be attributed to referrals from call centers to retail branches. Trades per day at TD jumped from 253,000 in 2007 to 372,000 in 2009.

TD client assets are now at $319 billion, which is a ahead of where it was going into the financial crisis. TD RIA assets are at about $100 billion, according to the company.

When the market was down and out, TD ramped up its marketing budget to $200 million. Much of that spending was focused on online advertising.

Expenses were cut in non-client-facing areas.

Four-year tech push

Tomczyk says to count on TD making a four-year push to make its technology second to none in the industry. This will include new data centers, networks and hardware.

Tom Bradley, president of TD Ameritrade Institutional, followed Tomczyk with his own remarks that were focused more on his company’s RIA business.

He emphasized that markets rebounded but that signs of caution linger with investors still holding high proportions of assets in cash and fixed income. TD plans to up its game in serving the fixed income market.

TD is also upping its game in options after a 125% increase in trades in that area. “We’ll create product,” Bradley says. The company also plans to do much more investor education that will help people understand options.

RIAs vs. Wall Street

He mentioned the Jan. 3 front-page Wall Street Journal article featuring RIAs as part of a positive trend of RIAs becoming more mainstream as registered reps decline. See write-up of the article: Page one Wall Street Journal article is a 'home run’ for the RIA industry

He also pointedly criticized Sallie Krawcheck, president of global wealth and investment management at Bank of America Corp. Krawcheck slammed RIAs in a recent television interview, pointedly noting that Bernie Madoff was an RIA. Krawcheck has come out swinging as she tries to stop broker defections from Merrill in the wake of the merger.

He said TD Ameritrade is differentiating itself from competitors in areas including:

For practice management, he mentioned that 60% of TD advisors are using Actifi Roadmap, the company’s practice managemenet tool This represents a 257% growth rate and use of the tool resulted in a 91% jump in new accounts for the RIAs after six months. See the article: TD Ameritrade takes on Schwab with big consulting push

He added that firms participating in the consultations save 1,300 hours over the course of a year. The system is free for TD Ameritrade customers.

Bradley’s advocacy efforts in 2009 focused on preventing surprise audits, and he said the company achieved success with that. In 2010, he said, he will continue to battle to have the fiduciary standard defined in a way that is helpful to RIAs. Bradley will also work to keep from having FINRA gain oversight of RIAs or from having a transaction tax imposed on trades.

Overall positioning

In the question and answer session, an advisor asked whether TD’s marketing budget will go to promote RIAs. Tomczyk says that the marketing is primarily targeted at traders and that the overall positioning and branding is to win the affluent investor and then funnel them to the RIA through referrals from the branch system.

A question was asked about the average size of retail accounts versus institutional ones. TD execs declined to give specifics but said that institutional accounts are more than twice the size and that 33% of accounts are institutional and 66% retail.

In the Bush-Clinton session someone asked: “What is your opinion of the fiduciary stance of RIAs vs. commission world of brokers and the potential regulatory issues since you are both HNW investors?

Bush quipped

“Who said we were high net worth?” Bush quipped. “I don’t know what the hell you are talking about!”

He added: “Thanks for all of you for increasing our net worth today.”

Experts say the speaking fees for the duo no doubt were well up into the six-digit range.