Fred Tomczyk shows RIAs at TD's 'Elite' event his drive to beat rivals -- by carefully picking his spots

Brooke’s Note: When I went to the Elite Advisor Summit of TD, I was on the alert for exactly what was ‘elite’ about it. Its venue, The Montage Resort, built eight years ago on the site of a former trailer park, was one immediate sign that this conference was – at the least – more upscale. [In a first outside the Vermont bed-and-breakfast realm, the person who checked me in also showed me to my room.] The cut-off for RIAs was $100 million of assets under management and every advisor I spoke to said that this cut-off meant a world of difference to them. Each conversation with a peer assured that they would learn as much as they gave. At national conferences, many say they find they are mostly in the position of teaching smaller advisors. What was true for advisors was also true for me as a reporter. Every advisor I spoke to had interesting plans and thoughts to impart. But the manageable crowds also gave me a chance to have unhurried chats with executives. This article – and hope fully my coverage in coming weeks – benefited from this ‘elite’ atmosphere.

A revealing moment came after Fred Tomczyk and Tom Bradley gave their respective opening talks to the 100 financial advisors gathered at the TD Ameritrade Elite Advisor Summit on Tuesday in Laguna Beach, Calif.

An advisor stood up and asked why it was that he was getting resistance from TD Ameritrade to using the company’s logo on his RIA’s letterhead and other such client-facing materials. The question was addressed to Tomczyk who is CEO of TD Ameritrade Holdings Inc. of Omaha, Neb.

The executive quickly allowed that he had not considered the issue because it had never come up before. Bradley quickly interjected. The issue does indeed come up from time to time, said the president of TD Ameritrade Institutional Services in Jersey City, N. J.

Then, turning to Tomczyk, he added in a Bradley deadpan: “It just doesn’t get up to you.” Tomczyk — the only TD executive in attendance not wearing a necktie and wearing a green rubber bracelet — completed a theatrical double-take of Bradley at the remark and the crowd erupted into laughter.

Skittish lawyers

The answer to the advisor’s question was that “the lawyers are skittish” about having TD appearing to endorse an RIA. But Bradley and Tomczyk both said they’d give the matter further consideration.

What was clear and became even more clear as the Q&A session continued on was that not very many issues fail to ‘get up’ to Tomczyk and he rarely, if ever, deferred a question to Bradley in the course of the conference — though Bradley answered a few on his own.

After the TD leaders spoke, I got a chance to sit down with Tomczyk in a conference room and ask him how such a small distant conference had made it onto his calendar.

Tomczyk said he has a sense of urgency about being present among advisors under current market conditions.

Road warrior

“Whenever you go through a lot of change…for someone in my position, it’s more important to be out,” he says. “I slept in my own bed once in two weeks.”

I also asked Tomcczyk about the emphasis he seemed to place in his speech on assuring advisors that TD Ameritrade is a rock-solid place to hold assets. He had done so by explaining that TD Ameritrade has virtually no debt on its balance sheet because of the cash that counterbalances it.

He also described TD’s unusually conservative business plan of sticking to low-trapeze businesses like brokerage and custody and the fact that TD cash gets swept to TD Bank – one of the world’s few banks with a AAA rating.

With this strategy TD came through the recent crisis all but unscathed and he wants advisors to know that the company was good – not lucky.

“They’ve all been asking me: how did you do that?” he says.

Pushing the marketing envelope

Yet Tomczyk was also pleased to address the areas where TD Ameritrade is eager to take risk – namely in pushing the marketing envelope. He took credit for the decision to crank up marketing efforts in last year’s down economy and says that advisors and investors should expect more of the same. TD spent $180 million on marketing in 2009 and has budgeted for $200 million in 2010. TD’s marketing budget was $140 million in 2008.

“We doubled down on marketing,” he says.

The result of the gamble was that TD’s revenue growth soared to 14%. “Now it’s a question: can we keep it up?” he says.

Tomczyk believes the company has a shot at keeping growth in the 11% range though he says that his competitors – who temporarily scaled back marketing – have now jumped back in with a vengeance.

“I think we’re facing a much more competitive market than we did two years ago,” he says.

Wirehouses shows signs of a pulse

Besides immediate competitors cranking up marketing spending, wirehouses are showing signs of making better strategic decisions.

“It seems like they’re starting to figure out some of these things,” Bradley says. “They’re smart people. They’re down but they’re not dead.”

Tomczyk agrees that the wirehouses are beginning to make some good decisions – albeit with at least one flaw.

“I think they’re getting better and better and they’re getting wiser,” he says. “They’re going to [a strategy of emphasizing] the $1-million client and that’s what I would do in their shoes. But how do you get growth?”

Editor’s Note: Here are several photos provided by TD Ameritrade that capture a few of the key moments at the conference.