TD Ameritrade Institutional
RIA Sentiment Survey
Views on the Markets and the Industry
January 2015
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
1
Methodology
 The findings are the results of a telephone survey, conducted by Maritz on behalf of
TD Ameritrade Institutional, a division of TD Ameritrade, Inc.
 301 independent registered investment advisors (RIAs) with firm assets under management
averaging $232 million participated in the most recent wave of this annual survey, which
was conducted during the December quarter of 2014 or 1st Fiscal quarter 2015.
 Independent RIAs who custody with TD Ameritrade Institutional and other independent
RIAs were asked to share their views on the economic outlook for their firms and the
advisor market in general.
 Previous surveys were conducted in January of 2014, 2013, 2012, 2010 and 2009.
 Margin of error is ±5.6 percent.
Maritz and TD Ameritrade, Inc. are separate, unaffiliated companies and are not responsible for each other's products and services.
About TD Ameritrade Institutional
TD Ameritrade Institutional is a leading provider of comprehensive brokerage and custody services to more than 4,500 fee-based, independent registered
investment advisors and their clients. Our advanced technology platform, coupled with personal support from our dedicated service teams, allows investment
advisors to run their practices more efficiently and effectively while optimizing time with clients. TD Ameritrade Institutional is a division of TD Ameritrade, Inc., a
brokerage subsidiary of TD Ameritrade Holding Corporation.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors turn to TD Ameritrade’s (NYSE: AMTD) technology, people and education resources to help
make investing and trading easier. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take
control, and we help them decide how - bringing Wall Street to Main Street for more than 39 years. An official sponsor of the 2014 and 2016 U.S. Olympic and
Paralympic Teams, as well as an official sponsor of the National Football League for the 2014, 2015 and 2016 seasons, TD Ameritrade has time and again been
recognized as a leader in investment services. Visit TD Ameritrade's newsroom or amtd.com for more information.
Brokerage services provided by TD Ameritrade, Inc., member FINRA /SIPC
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
2
Market Views
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
3
RIAs Remain Upbeat about the U.S. Economy
Outlook on U.S. Economy
3%
7%
6%
5%
35%
3%
7%
6%
Very Optimistic
44%
Somewhat
Optimistic
34%
Neutral
14%
Somewhat
Pessimistic
37%
46%
50%
48%
58%
25%
36%
26%
26%
29%
27%
29%
17%
10%
2009
21%
14%
14%
5%
4%
4%
3%
5%
1%
3%
2010
2011
2012
2013
2014
2015
Very Pessimistic
Base: Total Respondents (n=300)
Percentages may not all total 100 due to rounding
Access TD Ameritrade RIA Sentiment Survey Reports for 2009-2015 on the corporate website at http://www.amtd.com/newsroom/research-and-story-ideas/default.aspx
Q34. Looking ahead to the next three months, what is your outlook on the U.S. Economy? Would you say it is very pessimistic, somewhat pessimistic, neutral, somewhat optimistic or very optimistic?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
4
Geopolitical Tensions Temper Client Outlook
•
Geopolitical tensions in the Middle
East, Russia and elsewhere have
negatively impacted clients’ market
views, according to 65 percent of RIAs
Impact on Client Market Views
Strongly Negative
9%
65%
Somewhat Negative
56%
No Impact
34%
Somewhat Positive
Strongly Positive
1% 0%
Impact
Base: Total (n=301)
QMI10. Using the same scale, what impact have these geopolitical tensions (Middle East, Ukraine, and elsewhere) had on the viewpoint of your clients? Would you say the tensions have had a...
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
5
Over Half of Client Assets Are in U.S. Equities
 Exposure to U.S. equities has
increased 23 percent since 2010
 Holdings in international equities have
dropped by 40 percent compared to
2010
Client Asset Allocation
4%
4%
8%
9%
Cash &
Equivalents
9%
International
25%
Fixed Income
53%
U.S. Equities
15%
Other
29%
43%
2010 1
Base: Total Respondents (n=300)
1 TD Ameritrade RIA Sentiment Survey, 2010
Q33A What percent of the assets that you manage for clients today is in equities, fixed income, international investments, cash and sweep vehicles or
other assets such as private equity or real estate?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
2015
Statistically higher/lower than
2010 at the 90% confidence level.
6
Regulatory Issues and Managing Risk Are Top
Concerns for 2015
Concern About Impact On Firm In The Next 12 Months
19%
29%
32%
Regulatory changes
40%
17%
18%
24%
27%
Managing Risk (legal & compliance issues)
Macro-economic environment
2015
11%
15%
2014
22%
24%
2013
TD Ameritrade RIA
Sentiment Surveys1
2012
11%
24%
23%
20%
Business Growth
10%
Profitability
25%
19%
31%
Statistically higher/lower than
2014 at the 90% confidence level.
Base: Total (n=300)
TD Ameritrade RIA Sentiment Survey Reports for 2009-2015 on the corporate website at http://www.amtd.com/newsroom/research-and-story-ideas/default.aspx
Q1. How concerned are you today about the current economic climate and its impact on your firm in the
next 12 months? On a scale of 1-10...how concerned are you with... (Top 3 box shown)
1Access
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
7
Business Growth
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
8
RIAs Report Healthy Increase in New Clients
New Client Growth – Past Six Months
Increased
63%
Average Percentage of New Client Growth – Past
Six Months
14%
97%
Remained about
the same
34%
Decreased
3%
Number of Clients
Base: Total (n=301)
Q80 Has the total number of clients served by your firm decreased, increased, or remained about the same over the past 6 months?
Base: Those who increased clients (n=182)
Q102 You mentioned your firm has experienced client growth over the past six months. By approximately what percentage has your firm's client base grown?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
9
Two Thirds of RIAs See Strong Revenue Growth
And 32 percent predict that assets under management will increase at a faster
growth rate over the next six months
Revenue Growth – Past Six Months
Increased
Remained about
the same
Decreased
Average Percentage of Revenue Growth – Past Six Months
67%
17%
27%
5%
Revenue
Base: Total (n=301)
Percentages may not all total 100 due to rounding
Q90 Over the past six months, has your firm's revenue decreased, increased or remained the same?
Q115 In the next 6 months, do you anticipate the assets under management for your firm to experience a slower rate of
growth, faster rate of growth, or remain the same?
Base: Those who increased clients/revenue (n=190)
Q104 You mentioned your firm has experienced growth over the past six months. By approximately what percentage have your firm's assets under management grown?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
10
More Clients Are Coming from Banks and Other RIAs
 Full-commission brokerage
firms continue to supply
RIAs with the bulk of their
new clients
 RIAs were getting new
clients from banks and other
RIAs at least twice the rate
they did in 2012
Source of New Clients – Past Six Months
53%
57%
30%
20%
14%
14%
7%
Full-commission
brokers
6%
Other RIAs
Banks
2015
Other places
2012 1
Statistically higher/lower than
2012 at the 90% confidence level.
Base: Those who increased clients/revenue (n=190)
TD Ameritrade RIA Sentiment Survey, 2012
Q3 Where do you see the majority of your firm's new assets from new and existing clients coming from?
1
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
11
RIAs Win Clients with Service and Fees, and the
Relationship
Why Clients Choose RIAs
 Clients choose RIAs today
because they value the
personalized service,
competitive fee structure, and
the existing relationship they
have with their advisor
 Five years ago, clients chose
RIAs because of their
dissatisfaction with full-service
brokerages, and because of
RIA's requirement to put
clients’ interests first
28%
RIAs offer more personalized service and
competitive fee-structure
14%
27%
Existing relationship
10%
14%
Dissatisfied with service, advice, performance or
fees at full-commission brokerages
They offer a wide selection of investment options
with no pressure to sell proprietary products
33%
11%
2015
5%
11%
RIAs are required to offer advice that puts their
clients' interests first
Lack of trust in full-commission brokerage firms
20101
21%
6%
13%
3%
I’d prefer not to work with large financial firms
4%
Base: Total respondents (n=300)
1 TD Ameritrade RIA Sentiment Survey, 2010
Q4 What is the main reason your new clients chose the RIA model? Would you say it is because they primarily...
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
Statistically higher/lower than
2010 at the 90% confidence level.
12
Costs from Regulatory Changes Are Top Threat
to Growth
Impact of Industry Trends on Firm's Growth
 Fifty six percent of RIAs
believe regulatory changes
could add new costs to their
firms, impeding their ability
to compete
 RIAs are paying more
attention to online advice
services in 2015
56%
Regulatory changes adding new burdens
and costs
71%
Broker dealers promoting fee-based services
36%
32%
Emerging national branded RIA companies
35%
31%
More investors choosing DIY online investing
33%
33%
Online financial advisory svcs such as
Wealthfront, Personal Capital, Betterment
32%
23%
30%
Asset mgmt companies offering adviceembedded investment products
Commissioned brokers
Other
Base: Total (n=300)
1 TD Ameritrade RIA Sentiment Survey, 2014
QCI3. Which of the following would you consider a competitive threat to your business?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
31%
12%
7%
2015
2014 1
4%
2%
Statistically higher/lower than
2014 at the 90% confidence level.
13
Most RIAs Say Robos Are Not a Threat Today
 Eight in 10 advisors are aware of roboadvisors
 Sixty two percent of advisors have little to no concern that roboadvisors threaten today’s RIA industry
 A larger percentage of RIAs (82 percent) feel similarly about robos’ impact on their own businesses
Awareness of Roboadvisors
Concern that Roboadvisors are a Threat
Extremely
concerned
3%
Somewhat
concerned
35%
Not very
concerned
30%
1%
17%
20%
79%
82%
62%
Not at all
concerned
62%
32%
Threaten RIA Industry Threaten Own Practice
Base: Those aware of robo-advisors (n=236)
QCI5. On a scale of 1 to 10, where 10 means "Extremely concerned" and 1 is "Not at all concerned", how concerned are you that "robo-advisors" pose a threat to the broader RIA industry?
QCI7. Again using a scale of 1 to 10, where 10 means "Extremely concerned" and 1 is "Not at all concerned", how concerned are you that "robo-advisors" pose a threat to your OWN practice?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
14
RIAs Concerned About Robos Believe Next Gen
Clients Could be ‘At-Risk’
How Roboadvisors Threaten RIAs
Concerned About Threat of
Roboadvisors
They can attract and keep next generation
clients
76%
38%
69%
Fee compression
They will disintermidate advisors and then
move upscale
43%
Base: Those rating "robo-advisors" as a threat (n=88)
QCI6. Which of the following are you concerned about as relates to "robo-advisors" posing a threat to the RIA industry?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
15
Growth Strategies
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
16
Technology is the Primary Strategy for Growth
Strategic Initiatives for Firm Growth
58%
53%
49%
39%
30%
15%
Deploying
technology to
increase scale
Systematizing client
service and delivery
Training and
developing staff
skills
Implementing a
formal marketing
and social media
plan
Formalizing a
succession plan
Considering
potential sale or
acquisition of their
business
Base: Total (n=301)
Q140 In the next 6 months, which of the following types of strategic initiatives are you currently implementing or planning to implement to help position your firm for growth? Are you...?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
17
RIAs Are Planning to Invest in Tech and Talent to
Improve Infrastructure
Top Infrastructure Investments
 New technology is the most
frequently cited investment
 At least one in five are hiring
new junior advisors and
augmenting compliance
Investing in technology
58%
Hiring new junior/entry-level advisors
23%
Augmenting compliance
Adding to back office staff
20%
14%
Hiring lead Advisor(s)
11%
Opening new location
11%
Hiring Operations manager(s)
7%
Base: Total (n=301)
Q140 In the next 6 months, which of the following types of strategic initiatives are you currently implementing or planning to implement to help position your firm for growth? Are you...?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
18
Referrals Drive New Business for RIAs
Best Marketing and Sales Tactics
 Client referrals are the best source of new
business
 Centers of influence (such as attorneys and
CPAs) and third-parties are also important
Client referrals
54%
80%
Center of influence referrals
20%
3rd-party referrals
6%
Seminars
5%
4%
4%
4%
3%
Social Media
Hired dedicated salespeople
Advertising/PR
Other
Tactic
Base: Total (n=301)
Q170 Over the next 6 months, which one of the following marketing and sales tactics do you feel provide the greatest opportunity to grow your firm? Do you think it is...? (One answer only)
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
19
Technology Investments
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
20
Tech Investments Planned to Improve the Client
Experience
Planned Technology Investments - Next Six Months
32%
31%
Performance reporting tools
Financial planning tools
31%
23%
29%
33%
Customer Relationship Managment
Client facing tools (i.e., website, portals, etc.)
28%
27%
Document management tools
25%
28%
Social media
24%
22%
Portfolio rebalancing tools
24%
18%
Portfolio accounting tools
Mobile devices (e.g., iPad, tablet,
smartphone)
23%
26%
2015
2014 1
18%
28%
Base: Total (n=300)
TD Ameritrade RIA Sentiment Survey, 2014
Q180 Over the next 6 months, which of the following technologies are you considering investing in to help drive your growth? Are you investing in...?
Multiple responses
1
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
21
RIAs Say Better Tech Integration Is Good for
Business
Over half are not completely satisfied with their current level of technology integration.
Motivators for Technology Integration
Satisfaction with Current Level of
Technology Integration
I'm satisfied. We are
where we want to be.
Somewhat satisfied but we
are looking to increase our
level of integration.
Not at all satisfied. We need
direction on how to develop an
implementation strategy.
44%
Adding capacity for more clients
Reducing expenses
51%
78%
Improving workflows and productivity
63%
49%
56%
5%
Providing new services to clients
44%
Satisfaction with Level of Integration
Base: Total (n=301)
QTE2. How satisfied are you with your current level of technology integration?
Base: Those seeking integration (n=167)
QTE5a. Which of the following would you say are driving your pursuit of integration?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
22
e-Signature Is Most Desired Tech Upgrade
Interest in Advanced Technology Services & Apps
e-Signature
64%
47%
Account aggregation
Cloud based solutions
45%
Video chat
41%
Social media
33%
Automated account rebalancing
32%
Mobile payments and deposits
20%
13%
“Robo” automated portfolio management
Wearable technology
3%
Base: Total (n=301)
QTE10. Which of the following advanced technology services or applications are you interested in introducing to your practice?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
23
Half of RIAs Do Not Use Social Media for Client
Communication
But when used, LinkedIn is most common social media platform
Client Communication through Social Media
I do not use social media
50%
Social Media Used for Client Communication
LinkedIn
74%
Facebook
One on one
48%
33%
30%
Twitter
Broadly, but not all followers/friends
11%
Other
15%
14%
Google Plus
In select groups
8%
YouTube
All followers/friends
7%
Pinterest
13%
2%
Base: Total (n=301)
QTE7. How do you typically communicate with clients using Social Media? Do you communicate with them...
Base: Those using social media (n=157)
QTE8. Which of the following Social Media apps do you use to communicate with clients?
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
24
Next Generation/
Succession
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
25
Half of RIAs are 55+, but 48 Percent are in Their
Prime Working Years
•
One out of five advisors is 65 years of age or older
•
Four in ten expect to retire within ten years
Retirement Expectation
Over 20
years
20%
16 to 20
years
17%
11 to 15
years
6 to 10
years
Age
65+
20%
55-64
32%
44-54
28%
23%
23%
48%
40%
Within 5
years
17%
35-44
18-34
Base: Total (n=301)
QNG2. First, how old are you?
QNG6. In how many years do you expect to retire??
Retire
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
17%
3%
Age
26
Sixty Percent of RIAs Have Succession Plans
Retirement Succession Planning Expectations
 Many already have next
generation successors in
place, or are hiring and
grooming younger talent
I don’t have a formal plan in place
39%
I already have next generation successors
within the firm
36%
 Others are considering
some type of sale or M&A
I expect to sell the firm to another RIA
32%
I am hiring younger advisors with some
experience and grooming them as successors
25%
I expect to merge the firm with a financial buyer
or aggregator firm
I’m hiring recent college graduates and
grooming them to continue operating the firm
24%
16%
Base: Total (n=301)
QNG4. Which of the following statements describe your succession plan for your firm? Please choose as many as apply to your situation.
Multiple Responses Allowed
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
27
Respondent Profile
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
28
Demographic Profile
Demographic Profile
Total
Total
Owner/Partner
/Principal
n=301
n=264
18 - 34 (NET)
3%
3%
18 - 24
0%
0%
Demographic Profile
n=301
Age
Job Title
Owner/President
71%
Partner or Principal
18%
25 - 34
3%
3%
Vice President
4%
35 - 54 (NET)
45%
42%
Chief Investment Officer
3%
35 - 44
17%
14%
Financial Advisor/Investment
Manager/Portfolio Manager
2%
45 - 54
28%
28%
55+ (NET)
52%
55%
RIA/ Investment Advisor
2%
55 - 54
32%
33%
Director
1%
65+
20%
22%
Average Firm Assets under
Management (AUM)
$232.3 Mil.
Base: Total (n=301)
QS1 What is your job title? Are you the firm's...
QNG2. First, how old are you?
Q37 What are the approximate total assets under management at your firm?
This document contains confidential information for use by TD Ameritrade Holding Corporation and its subsidiaries.
29