What Tom Bradley's 25-year reign at TD Ameritrade says about the RIA business

Brooke’s Note: This article turned out to be more timely than first thought as Bradley steps aside after his impressive reign. See: Nally to takes reins of TD Ameritrade’s RIA business from Tom Bradley

One of my first trips as a reporter covering the financial advisory industry was to San Diego for the 2001 TD Waterhouse conference. It was a big event at the Grand Hyatt with a big room of exhibit booths, hundreds of financial advisors and some impressive speakers.

It looked and felt much like the Schwab IMPACT conference that I had covered just a few months before. The only odd element of the rather grand event was the fact that TD Waterhouse, even after having ingested Jack White & Co., had only around $10 billion of RIA assets. This put TD Ameritrade about $290 billion behind Schwab at the time.

I recall being conscious of the incongruity between the grandeur of the event and TD’s stature as an RIA custodian. I felt that I was either part of an impressive marketing farce or part of a coming-out party of sorts for a small company on its way to big things.

Approaching $200 billion

Tipping me off that the company would eventually land on the latter possibility was my meeting with Tom Bradley. President of TD’s custody unit as he is now, Bradley had a winning air about him and gave an energetic interview. Notably, Bradley didn’t try to puff his company to be more than it was nor was he shy about speaking about his company as a worthy competitor to Schwab and Fidelity. Bradley was intense but also genuinely warm and seemed to enjoy the interaction.

Now, looking back at Bradley’s quarter of a century with TD See: The 10 most influential figures in the RIA business going into 2012, it is notable that he uses a similar approach today now that his business has $160 billion of assets and appears to have much more coming its way. If the stock market keeps cooperating, TD Ameritrade Institutional could hit $200 billion of assets within a couple of years. See: Once good for a few million, TD Ameritrade’s foot-in-the-door strategy is starting to net billions.

Though many of us know Bradley mostly from relatively brief meet-ups at conferences or from listening to his sardonic one-liners at those events, Bradley certainly has certainly navigated more substantial challenges en route to making TD Ameritrade a legitimate player in RIA custody. TD Ameritrade now encompasses the formerly distinct RIA custody units not only of TD Waterhouse and Jack White but also of Ameritrade and Fiserv.

A steady strain

In other words, Bradley has survived an impressive number of mergers in which his firm was being bought — or where his firm was the buyer. Plenty of execs don’t make it with new regimes or they swallow more than they can chew and end up choking. The merger of TD Waterhouse and Ameritrade led to service breakdowns for a period of time as the company scrambled to find itself but Bradley kept a steady strain — and didn’t yell at reporters who asked tough questions about the process.

He has also survived a number of strong personalities presiding over him. Unlike Fidelity’s Mike Durbin, who has to avoid ticking off Ned Johnson See: Mike Durbin is putting his stamp on Fidelity as an RIA custodian for asset-flush breakaways or Bernie Clark, who needs to toe the line with Walt Bettinger at Schwab See: After lunch with Bernie Clark, the future of RIAs seems to have no limit, Bradley, who is based in Jersey City, N.J., has to keep bosses from two cultures in two countries happy. In Toronto (TD Bank still owns more than 40% of TD Ameritrade Institutional), Ed Clark has his say See: Ed Clark: TD Ameritrade will not compete with RIAs through its branches and in Omaha, Fred Tomczyk is king. See: Tom Bradley and Fred Tomczyk team up to give forward-looking state-of-the-TD Ameritrade speech.

Early morning run

One way I’ve been able to gauge asset custodians over the years on behalf of RIAs — and the employees at those custodians — is by observing how I am managed by the PR teams at those firms and, in particular, by the presidents of the units. Those experiences turn out to be amazingly similar to the way that advisors describe the quality of the service at those same custodians. Culture pervades at these companies.

Tom Bradley has always made it clear that reporters have access to him when the need is there — and I hear that from advisors as well (though ironically I couldn’t get him on the phone for this article). I recall one year when Bradley told everyone at his conference’s general session that he would be going for an early morning jog and anyone was welcome to come along at 6 a.m. I had flown in from California for that Orlando, Fla. event, thus the meeting would have been at the equivalent of 3 a.m., so I slept in. But a part of me has always regretted that I didn’t drag myself out of bed. It was a good invitation and about 10 people took him up on it.

Lightning rod

Bradley’s habit of making himself accessible extends to acting as the go-to speaker at events that can use some personality and gravitas, like those of the NAPFA and Financial Planning Association conferences. He has also been willing to act as a lightning rod when it comes to standing up for RIAs on legislative and regulatory issues — notably his opposition to the Security and Exchange Commission’s so-called Merrill Lynch rule, a loophole that allowed brokers to dispense investment advice as long as it was incidental to the transaction.

Years ago, when I flew into New York to occasionally spend a week working from the InvestmentNews newsroom, I would have some long evenings where everyone went home leaving me at an East Side hotel with not much to do. One night, Bradley came over from Jersey City after work and joined me for dinner. There was nothing burning to talk about. It was appreciated.

Having your cake

There’s no cause to get sentimental of Bradley’s hitting the 25-year mark, of course. He still has an air of youth about him and doesn’t show any signs of letting up. See: Tom Bradley answers 10 questions about TD Ameritrade’s competitive stance in his 25th year.

But it’s worth noting what his long tenure says about this business. Bradley has been the ping-pong ball between thousands of demanding RIAs, dozens of top executives, the demands of being entrepreneurial in the face of big competitors and the politics of major corporations. These are the kinds of demands that cause many executives to be aloof to make self-serving decisions that don’t benefit customers or the industry.

It’s a testament to this business that you can multiply assets 15-fold in 10 years while remaining true to yourself and those people around you — and still have the energy to do more. That spirit pops up every day in the RIA business. The survey that Fidelity released last week based on interviews with breakaway brokers was a prime example. These new RIAs or independent broker-dealer reps generally reported that they broke away to achieve a better payout or to enjoy independence.

In other words, they broke away so they could have their cake but in so doing, they found out they could eat it, too. Not only were most of them happier, with happier clients, but they were making more money and enjoying it more. And in the majority of cases, all those good effects had taken hold within six months.

By living a better life and doing more for clients, advisors prosper. Tom Bradley has essentially taken that approach to building a custodian for 25 years and has success to show for it — an outcome that is heartening and really shouldn’t be all that surprising.