TDA Has Record Year for Recruitment of Breakaways

TDA Has Record Year for Recruitment of Breakaways


TD Ameritrade said it added a record number of breakaway brokers for the fiscal year 2012, attracting 441 registered investment advisors to its platform, up 27 percent from last year.

For the fiscal fourth quarter, TD attracted 117 new teams, down slightly from the prior quarter. During a conference call Monday morning, Chief Executive Fred Tomczyk said the Omaha, Neb.-based company’s pipeline of breakaway brokers continues to be , though he declined to give specifics.

Peter Dorsey, managing director of sales at TD Ameritrade Institutional, its advisor unit, attributed the growth in breakaways to client demand as well as the firm’s efforts to make the transition to independence easier.

“In addition to a lot of the tumult and change going on at the traditional Wall Street firms, a new trend we’re starting to see is that sometimes people are being pulled to independence by their clients,” Dorsey told “The end clients somewhat have a confidence crisis with some of their traditional firms, and are starting to talk to their advisors in that captive environment today about what other options are out there.”

TD’s net new assets were $10 billion for the quarter, up 9 percent from last year, bringing total client assets to a record $472 billion, up 25 percent year-over-year. Unlike Schwab, TD doesn’t specifically break out the contribution of its advisor unit. The firm said its Institutional unit accounts for about 50 to 60 percent of net new assets, and about 30 to 40 percent of total client assets.   

Dorsey said the firm’s new recruits are coming from various advisor channels; for the fiscal year, about 24 percent of new advisors were so-called “tuck-ins”—when advisors leave a firm to join another rather than start their own practice. Despite retention packages winding down at the wirehouses, recruitment out of the wirehouses has slowed a bit, Dorsey said. Meanwhile, they’re seeing an abnormally large swell of advisors leaving the independent broker/dealers.

“[IBD advisors] have already made that first step to independence,” Dorsey said. “Typically one of the evolutions that we’ve seen is that they go from a wirehouse to an independent broker/dealer to full independence.

“Wall Street is certainly scrambling at this point to make sure that the bleeding stops.”

Dorsey said most of the firm’s RIAs had contingency plans in place to handle Hurricane Sandy, which hit the Northeast early last week. TD Ameritrade’s client service and operations were not affected, as calls could be routed to its other locations.

“The call volumes were fairly light during the week, but we expect as people get settled back this week and most of the power’s being restored, for volumes to normalize,” Dorsey said. 

TAGS: Equities
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