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Scott Collins Director of Advisor Transitions for TD Ameritrade Institutional
<p> Scott Collins, Director of Advisor Transitions for TD Ameritrade Institutional</p>

60 seconds with Scott Collins

REP.: Many in the industry say there’s a shortage of top talent in the advisor space right now. Are you seeing that?

Scott Collins: I think you’re going to see less movement from independent broker/dealer to independent broker/dealer. Their value propositions are becoming a little hard to distinguish. So I think you’ll see less movement on that side.

Recently you’ve seen some of the numbers with some of the IBD firms out there experiencing slower growth. What you’re finding is that more of the successful advisors in that IBD space who have built very strong advisory-based practices have outgrown that model, and they’re starting to take to the RIA channel. They’re looking for better solutions, whether that’s technology, how they deliver their advice to their clients and more control.

From our end, we’re not seeing a shortage of talent. I would actually argue we are seeing larger and larger advisors, more complicated practices coming to TD.


REP.: Can you quantify that?

SC: We had 110 breakaway advisors come in the first quarter of this fiscal year and 94 in the second quarter. And the majority of those are coming from the IBD channel.


REP.: Why do you think there’s that boost in movement there?

SC: A lot of these advisors are frustrated with their current firms’ technology, compliance and the lack of innovation.

If you think about the industry over the past 25 or 30 years, a lot of advisors were with the wirehouses because you had to be there. They had the technology; they had the research; and they had the training. And then in the ’90s and the 2000s, a lot of advisors started to migrate towards the IBD channel as technology got better. Now that next evolution is really toward the RIA space.


REP.: What can we expect to change in advisor recruiting going forward?

SC: I think you might start to see some firms scale back on the transition packages that they’ve been giving over the last few years, and this is more on the IBD side. In the wirehouse world, a good advisor used to get 100 percent of his trailing 12-month production, and then it went to 150, then 200 and eventually got north of 300 percent. We saw some of the same things happen in the IBD channel. Back in the day, an IBD used to be able to give away 1–5 percent of an advisor’s trailing revenue. Then over the past three to five years, some of those packages have gone up significantly—30, 40, 50 percent. For them to actually recoup and make money on that, it’s a pretty good payback period .

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