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Top Talent Key to TDAI’s 2015 Strategy

Advisors say their biggest challenges going into 2015 include clients that are aging out and passing money off to the next generation, said Tom Nally, president of TD Ameritrade Institutional, at the opening session of the firm’s annual advisor conference Thursday.

Helping advisors attract and retain top talent to counteract that trend was a key theme, returned to again and again, during Nally's opening remarks. He also touched on perennial topics like next-generation clients, the rise of technology and the growth of the RIA channel. 

Nally said advisors need to focus on investing in career development for their associates and align and reward their people for the success they bring to the firm. Firms that have these kinds of programs in place generate 72 percent higher revenue, 65 percent higher assets under management and 144 percent higher income per owner, Nally said.

“When you make that investment in your people, it will pay dividends down the road,” he said.

That assumes there are people interested in joining the profession in the first place. Less than 6 percent of advisors are under the age of 30, Nally said. And only 700 students graduated from financial planning degree programs in the U.S. last year. Yet expected job growth for financial advisors is more than double all other occupations.

“We don’t have enough young people entering the field to meet that growing demand from consumers,” Nally said. “But we also need to attract talent that reflects the increasing diversity of a changing client base.”

The millennial generation will surpass baby boomers as the largest living generation this year, and they are far more ethnically diverse, a reality not reflected in the makeup of the advisory industry, including those attending the conference. Wealthy millennials say they prefer to work with someone similar to them, Nally said.

That’s one reason TDAI launched its RIA Intern Network last year, which has about 500 firms participating so far.

Nally said the firm is also modifying its approach to helping advisors improve their businesses. 

“Does the age-old approach to practice management still have a place in today’s fast-paced business environment?” Nally asked.  “For years, you have been force fed a steady diet of 50-page whitepapers. It’s not working. We get it. We know where those whitepapers ultimately end up,” showing a photo of a trash can on the screen.

Instead, advisors need to make surgical-style improvements at the ground level, he said.

For instance, last year, the firm rolled out its breakout growth program, a step-by-step plan for advisors to create key positions and hire the right people to fill those jobs. So far, participating firms have hired more than 100 chief operating officer-type business managers, Nally said.

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