How Investment Advisors Can Prepare for Tomorrow – SPONSOR CONTENT FROM TD AMERITRADE

More than ever, today’s business leaders face the daunting challenge of identifying future trends and taking action quickly to stay ahead. New competitors are emerging. There’s increasing pressure on price. Disruptors in every industry are raising the bar higher for customer service and convenience.

These are the same challenges faced by the more than 7,000 independent registered investment advisors (RIAs) that custody client assets with TD Ameritrade Institutional. RIAs as a group have been gaining market share within the financial advisory industry for more than a decade, yet the future is beset with challenges: market and geopolitical volatility, an evolving regulatory environment and the accelerating pace of evolving technology.

These and other topics were front and center during TD Ameritrade Institutional’s 2019 Elite LINC, a leadership conference held at the Ritz-Carlton in Dana Point, California. The three-day event featured several guest speakers: investment advisor and strategist Barry Ritholtz, historian and biographer Walter Isaacson, geopolitical consultant Ian Bremmer, and futurist-economist Rebecca Ryan. The agenda included sessions focused on innovation, enhancing cybersecurity, and exploring the proven practices of top-performing firms.

In the opening session, TD Ameritrade CEO Tim Hockey and TD Ameritrade Institutional president Tom Nally described how RIAs face relentless pressure to do more for less. Fintech start-ups are driving down the prevailing rate for managing investments, they said, even as wealthy families call on RIAs to provide guidance on every aspect of their financial lives.

“We’re not seeing price compression. What’s happening is service expansion,” Nally said. Advisors, he said, must find ways to better articulate their value and get compensated for all the valuable services they provide.

The great virtue of technology is automating routine tasks and freeing advisors to spend more time on empathetic, person-to-person relationships. A good example is the growing adoption of systems that enable RIAs to open new accounts in a fully digital environment. Eliminating the need for forms, faxes, and actual signatures not only drives down expenses for advisors and saves time, but also leads to happier clients.

“You need to understand what is the unmet need of the client, what challenges are they trying to solve, and then leverage technology to make that solution cost-effective,” Hockey said.

Over the three days, speakers flagged a number of other areas that advisory firm leaders must pay attention to and adjust if they intend to sustain standout performance.

Keep your eyes well down the road. TD Ameritrade Institutional’s FA Insight research shows top-performing firms tend to have detailed plans for the future and well-defined growth strategies, and invest in technology that can support future growth over the long term. “As you move higher up the organizational structure, your time horizon changes. CEOs need to be looking 10 to 20 years into the future,” Hockey said.

Compete on the delivery of client satisfaction. Hockey also noted that leaders need to decide how their organization will seek a competitive advantage. Competing on price or product is hard to sustain, so when he took over as CEO in 2016, Hockey made maximizing the client experience his North Star. “You don’t want to compete on price. It’s a race to the bottom. We think we can stand out in terms of creating value, for which people will pay a reasonable price.”

Nally said the primary reason TD Ameritrade has been able to attract more than 7,000 advisors to its platform over the past 25 years was their ability to listen to the customer. “We keep a keen focus on understanding the needs of the advisor and crafting a value proposition that delivers on those needs,” Nally said.

When planning, it’s better to look ahead. Rebecca Ryan, a guest speaker who is a futurist, economist, and founder of Next Generation Consulting, observed the first thing most people do when they plan for the future is to study the past. “We all study history in school, yet no one takes ‘future-ing.’ We don’t spend enough time developing foresight skills,” said Ryan, who formerly played professional soccer. “In business, like sports, you need to stay on your toes. The future is coming toward us fast, like an opponent in a game.”

It’s OK to think differently. Organizations benefit from a diversity of thinking, skills, and backgrounds. Ryan explained that the U.S. Army has been working since the 1960s to develop better foresight among its senior officers. One technique they used was to create “red teams”—individuals instructed to ask the tough questions and test the assumptions of their superiors.

Likewise, biographer and historian Walter Isaacson described how some of history’s greatest thinkers—such as Ben Franklin, Leonardo da Vinci, and Albert Einstein—often found themselves outside of the conventional wisdom. Yet that outsider status also may have helped them pursue their dreams and ideas, flowing seamlessly between science and art, or technology and creativity, as they repeatedly delivered innovation.

For business leaders who are anxious about tackling these and other challenges, the best parting advice may come from Apple’s visionary but notoriously demanding founder, Steve Jobs. Isaacson recalls that Jobs, who frequently asked for impossible, never-before-done feats of design and technology innovation, would give an anxious staffer a long, penetrating stare and say, “Don’t be afraid. You can do it.”

To learn more about TD Ameritrade Institutional, visit or call 800-934-6124.

TD Ameritrade® commentary for educational purposes only. Member SIPC. All investing involves risks, including risk of loss.

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