July 20, 2010 / 4:56 PM / in 7 years

TD Ameritrade lures steady stream of brokers -CEO

* About one new ‘breakaway broker’ signed daily, CEO says

* Wave of defecting brokers in wake of financial crisis

* A ‘long-term secular trend’

By Jonathan Spicer

NEW YORK, July 20 (Reuters) - TD Ameritrade Holding Corp AMTD.O has a record pipeline of new independent advisors that are leaving large Wall Street firms, its chief said on Tuesday, continuing the drumbeat of broker defections.

The online brokerage offers umbrella services to registered investment advisers, or RIAs. It has had some success luring them from Wall Street wirehouses in the wake of the financial crisis, capitalizing on a wave of so-called breakaway brokers and client demand for more independent financial advice.

TD Ameritrade, which also reported better-than-expected earnings on Tuesday, is now signing on slightly more than one new breakaway broker on average each business day, CEO Fred Tomczyk told analysts on a conference call.

“The breakaway broker market continues to be robust,” he said. “We are having more and more conversations with wirehouse financial consultants eager to learn more about the RIA model, and our ... pipeline is at a record level.”

“I do think this is a long-term secular trend,” Tomczyk said, adding full-service wirehouses are probably taking steps to retain their brokers.

Hundreds of investment advisers have left full-service wirehouses, such as Morgan Stanley MS.N and Citigroup Inc’s C.N Smith Barney, to go it alone. TD Ameritrade, Charles Schwab Corp SCHW.N and others offering RIAs custodial services have welcomed them -- and the assets they bring -- with open arms.

TD Ameritrade has more than 4,000 RIAs on its platform. Last quarter was one of its best for new asset gathering. [ID:nN20244515]

“Momentum has been strong for RIAs as investors looking for help managing their money are increasingly turning to the independence and objectivity of the RIA model,” Tomczyk said. (Reporting by Jonathan Spicer, editing by Matthew Lewis)

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