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Skip Schweiss exit from TD Ameritrade means the RIA custody business lost its most visible corporate-paid advocate -- for the moment

TD's now ex-managing director of advisor advocacy is set to become the FPA president, but most peers agree the 58-year-old is poised to 'write his ticket' with another custodian or national RIA

Wednesday, August 5, 2020 – 9:33 PM by Lisa Shidler
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Skip Schweiss is out of the game, for now, but can 'write his ticket,' peers agree.

Brooke's Note: The sense of loss is real when a well-known and respected RIA executive leaves. They are a reassuring part of the fabric of our village. But what we have come to see in this burgeoning sector of the financial services world is that the executive's dislocation is rarely long-lived. Often they get a promotion in their reincarnation. Skip Schweiss is at an industry nexus. He connects to RIA advocacy and the coming merger of TD Ameritrade and Schwab. So it brings both of those sub-theaters of change into focus and makes us wonder what his exit forecasts in each -- a fair amount it appears. Is RIA advocacy from a broker-dealer now an atavistic curiosity as custodians become fee-based advisors mostly under FINRA laws? Are executives who perform services beyond meat-and-potatoes custody operations in a zero-fee, low interest rate environment going extinct at mega-mega custodians? The concern is there as Skip Schweiss departs on the heels of Dani Fava. Selfishly, I hope Skip's back soon in a position of influence but not before he enjoys a deserved break.

Skip Schweiss is out at TD Ameritrade Institutional and, yes, read everything into it about the coming merger and what his exit foretells, say friends across the industry.

Charles Schwab Corp.'s dealmakers are bound to scrutinize any job deemed remotely non-essential, redundant or providing intangible value as the focus errs toward getting the deal done in streamlined fashion, they add.

The Omaha, Neb.-based TD Ameritrade Institutional paid Schweiss's salary, but the 58-year-old managing director of retirement plan services and advisor advocacy at carried the RIA business along with him. See: At MarketCounsel, a Ron Rhoades-Skip Schweiss exchange reveals new DOL-rule threat -- a Trump-led compromise creating a mutant strain of the reg that benefits no one

Dani Fava
Dani Fava had a non-traditional, customized role at TD Ameritrade. 

Someone whose value to a corporation is so abstract may be less likely to survive the merger ax, says Tim Welsh, president of Nexus Strategy.

Dani Fava, who led innovation for TD Ameritrade, left the firm, July 15. See: Envestnet nabs Dani Fava to cross-pollinate semi-autonomous units and reap 'financial wellness' as the end product

"Well, if you think about it, both Dani and Skip had non-traditional, customized and newly formed executive roles in the custody business," he says from his Larkspur, Calif. office.
Schwab expects the TD combination to produce $2 billion in annual expense savings by year three as a combined entity, the San Francisco-based firm said at the time of the deal.

'Role' call

Along these lines, Kate Healy, who heads up "Generation Next," could also be on the bubble. 
"Kate is universally admired, well-liked and known across the industry, so also has many options. There is no similar role at Schwab," Welsh adds.
Scott MacKillop
Scott MacKillop:'I do not know who his counterpart at Schwab is, which says something about Skip's unique place in our industry.'
Healy is ‎managing director, institutional marketing at TD.
Schweiss's role stands out on the RIA spectrum, says Scott MacKillop, CEO of First Ascent Asset Management in Denver.
"I do not know who his counterpart at Schwab is, which says something about Skip's unique place in our industry. He has truly distinguished himself through his service to the advisor community in a way that few have."
When asked whether Schwab has a staffer whose main task is to advocate for RIAs in Washington D.C., Schwab spokesman Pete Greenley responded that the advocacy happens differently at Schwab.
"Bernie Clark, head of Schwab Advisor Services, has also been a vocal advocate for the industry, and we've been working for years in support of quality regulation that benefits advisors and investors alike." See: Bernie Clark and Skip Schweiss head to Washington next week to fight on behalf of RIAs in Bachus bill showdown
He adds: "Schwab has long been an advocate in Washington D.C. for RIAs, and we have a small group of full-time staffers there, who among other things, advocate year-round on behalf of advisors and investors."
Welsh says Schwab is sometimes conflicted in its advocacy because what it perceives as best for its branch brokerage operation and its affiliated RIAs can diverge. TD at times appeared to struggle with, too, other sources add.
Schweiss tweeted his Aug. 3 departure but did not touch on his plans or the circumstances of his departure. He also declined comment to RIABiz.

Reducing headcount

Other TD executives are sure to spin loose as part of this merger, predicts Charles "Chip" Roame, managing partner of Tiburon (Calif. ) Strategic Advisors.
Kate Healy
Kate Healy, head of TD's 'Generation Next,' could be on the bubble.

"Many more executives will exit," he says.

Merger economics foretold that outcome as the San Francisco broker takes control, says MacKillop, who knows Schweiss well. The two just climbed a mountain last weekend. 

"This is not a negative reflection on Schwab but a recognition that these kinds of transactions always generate movement. And, of course, to make the merger work financially, Schwab needs to reduce headcount."

TD spokesman Joseph Giannone acknowledged the merger's impact. "It's not uncommon during these kinds of transactions to see employees depart."

Schwab administers $4 trillion and TD Ameritrade has about $1.5 trillion, which includes assets from a combined 10,000 RIAs. See: Reported Schwab-TD merger is a 'blockbuster' combo that creates a 10,000-RIA, $2-trillion custody juggernaut and may signal long-expected industry shakeout.

He also offered insight about how limited Schwab's involvement is, for now, in making micro-decisions at TD.
"While Schwab's acquisition of TD Ameritrade was announced last year, and it has received initial regulatory approval, the two firms are legally separate entities, so we won't be providing comment on any changes to TD Ameritrade's personnel at this time." 


Schweiss was responsible for TD Ameritrade's retirement business, which TD sold, in part, last year to Broadridge. See: TD Ameritrade fake-punts 401(k) business to Broadridge 
This is not the first time that he's been part of a major merger. In 2008, when Fiserv sold a division to TD Ameritrade he survived.
Schweiss (left) hiked at Bison Peak. It was his fourth time. He is joined by Scott MacKillop (center) and James Passarelli.

The Schwab merger might have given Schweiss a needed break to decide what's next on his path, MacKillop says. 

"I think the Schwab and TD Ameritrade merger gave him a chance to step off the treadmill and assess how he wants to spend the rest of his career," MacKillop says. 

On his Twitter feed, Schweiss now describes himself this way: "When not being a husband, father, son, or brother, I like to ski, hike and road bike. Enjoy policy more than politics. Funemployed at the moment." 

Schweiss is known for his work-hard, play-hard approach to life, with the Coloradan leading hikes of executives connected to Tiburon CEO Summits. He has also penned accounts for RIABiz. See: Skip Schweiss and Chip Roame reward RIA super-hikers with soft beds, sharp rocks and 'junk food' to slog New Hampshire's Presidential Traverse

'Beast' mode

But Welsh says Schweiss, who is set to take the reins as president of the Financial Planning Association, an unpaid job, has prospects that remain undimmed personally.
"I’m sure he could write his own ticket.  In the meantime, this does free him up to focus full-time and hopefully fixing the many problems at the FPA." 
Chip Roame
Charles 'Chip' Roame: 'Many more executives will exit.'

MacKillop says it's true that Schweiss will be in the driver's seat.

"He would certainly be a great catch for a firm that wants to up their game in the custody business, but he has qualities that would make him a great catch for a much broader universe of firms," MacKillop says. 

"First, he knows and understands the advisor world as well as anyone," he adds.

"Second, he is universally known and respected throughout the industry.  Third, his ethical make-up and moral compass raise the trustworthiness of any firm he works with."

Roame agrees. "I'd feel quite sure that any firm wanting a bigger footprint in the RIA custody business will call Skip.
"I think a lot of RIA firms will also call Skip as he would also make a great ambassador for one of the emerging nationwide RIAs." 
That footprint may extend all the way back to San Francisco, MacKillop says.
"I wouldn't be surprised if once Schwab recognizes what they lost, they try to get him back on the team in some role. They'd be crazy not to. He's a rare beast."  See: Fidelity, others pounce on TD RIAs with a vengeance following Schwab merger, but Schwab finds a white knight to defend its new Texas fort, and, suddenly, Tom Nally's future seems clouded at 'Schwabitrade'

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Mentioned in this article:

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

Linda MacMahon

Linda MacMahon

October 4, 2020 — 4:27 PM
I say "go ahead and make the merger". There may be bumps along thenway, but isn't everything that way at first?

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