By Joe Rauch
ORLANDO, Fla., Feb 4 (Reuters) - The flow of 'breakaway brokers' from the biggest firms to independents is still growing after a year of record departures, despite Wall Street assertions it is slowing, TD Ameritrade Holding Corp's institutional business head said on Wednesday.
'The numbers are what the numbers are, and they're growing,' Tom Bradley said in an interview after a speech at TD Ameritrade's annual investment adviser conference in Orlando, Florida. 'This is a clear trend and it's happening.'
Bradley said TD Ameritrade sees the trend as a key source of growth for its institutional unit, which provides custodian and support services for independent wealth managers.
He said breakaway brokers accounted for 25 percent of TD Ameritrade's net new assets in 2009, though he declined to provide specific figures.
The company added 200 breakaway brokers last year, Bradley said. The pipeline of potential recruits it is courting has $210 billion in client assets under management, up from $140 billion last year, he said.
In recent weeks, major brokerage houses reported their ranks of financial advisers had stabilized after nearly a year of attrition.
Sallie Krawcheck, head of Bank of America's global wealth and investment management unit, said on Jan. 14 that the breakaway broker trend was 'overblown.'
'Quite frankly, we haven't seen as much as we would have expected,' she said at the time.
Bradley disagrees with such industry assessments.
'They're trying to protect their turf and settle concerns of a mass run from the wirehouses,' Bradley said.
The controversy over breakaway brokers is about more than company headcount and corporate rivalry. It is at the heart of a fierce debate in the industry about how firms advise clients.
On the TD Ameritrade side, registered investment advisers, or RIAs, argue that clients want their advisers to adopt a higher fiduciary standard, which means they must act in their clients' best interest and are liable if an investment sours.
The biggest Wall Street brokerage firms are proponents of a suitability standard, or merely giving clients financial advice that fits their broad goals, leaving the final decision -- and liability -- to the client.
(Reporting by Joe Rauch; Editing by Gary Hill)
((joe.rauch@thomsonreuters.com; +1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net ) Keywords: TDAMERITRADE/RECRUITING
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
ORLANDO, Fla., Feb 4 (Reuters) - The flow of 'breakaway brokers' from the biggest firms to independents is still growing after a year of record departures, despite Wall Street assertions it is slowing, TD Ameritrade Holding Corp's institutional business head said on Wednesday.
'The numbers are what the numbers are, and they're growing,' Tom Bradley said in an interview after a speech at TD Ameritrade's annual investment adviser conference in Orlando, Florida. 'This is a clear trend and it's happening.'
Bradley said TD Ameritrade sees the trend as a key source of growth for its institutional unit, which provides custodian and support services for independent wealth managers.
He said breakaway brokers accounted for 25 percent of TD Ameritrade's net new assets in 2009, though he declined to provide specific figures.
The company added 200 breakaway brokers last year, Bradley said. The pipeline of potential recruits it is courting has $210 billion in client assets under management, up from $140 billion last year, he said.
In recent weeks, major brokerage houses reported their ranks of financial advisers had stabilized after nearly a year of attrition.
Sallie Krawcheck, head of Bank of America's global wealth and investment management unit, said on Jan. 14 that the breakaway broker trend was 'overblown.'
'Quite frankly, we haven't seen as much as we would have expected,' she said at the time.
Bradley disagrees with such industry assessments.
'They're trying to protect their turf and settle concerns of a mass run from the wirehouses,' Bradley said.
The controversy over breakaway brokers is about more than company headcount and corporate rivalry. It is at the heart of a fierce debate in the industry about how firms advise clients.
On the TD Ameritrade side, registered investment advisers, or RIAs, argue that clients want their advisers to adopt a higher fiduciary standard, which means they must act in their clients' best interest and are liable if an investment sours.
The biggest Wall Street brokerage firms are proponents of a suitability standard, or merely giving clients financial advice that fits their broad goals, leaving the final decision -- and liability -- to the client.
(Reporting by Joe Rauch; Editing by Gary Hill)
((joe.rauch@thomsonreuters.com; +1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net ) Keywords: TDAMERITRADE/RECRUITING
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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