Schwab Moves to Reassure Smaller RIAs By Hiring Former TD Ameritrade Veteran

Tom Bradley will oversee the advisors some thought the sale would leave hung out to dry.

(Christopher Lee/Bloomberg)

(Christopher Lee/Bloomberg)

Investors reacted positively in November when news broke that Charles Schwab was in talks to acquire competitor TD Ameritrade. Industry observers were mixed on what impact the deal would have on RIAs that custody with the firms.

Some observers said advisors stood to gain from the deal, while others questioned what would happen to the smaller RIAs welcomed by TD Ameritrade but traditionally shunned by Schwab. However, Schwab might have calmed any anxiety of the latter only weeks after it confirmed reports of the deal.

The company announced Friday morning it hired Tom Bradley, the former president of TD Ameritrade’s Retail and Institutional businesses, to lead the part of Schwab’s custody business that services RIAs managing up to $100 million in assets.

He will start at the company Jan. 13 and report to Bernie Clark, an executive vice president and the head of Schwab Advisor Services. Bradley will be based out of Schwab’s Westlake, Texas campus, where the company plans to relocate its corporate headquarters.

“Of course, there are a LOT of smaller RIAs at TD Ameritrade today specifically because they got rejected by Schwab’s AUM minimums in the past. Which left a bad taste in a lot of mouths. That won’t instantly vanish just because Schwab says ‘Ok, NOW we’ll work with you!’” Michael Kitces, a financial advisor and the co-founder of the XY Planning Network who runs a popular industry blog, wrote on Twitter about Bradley’s hiring.

But Kitces applauded the new hire as a wise strategic move. Bradley was popular at TD Ameritrade and making him part of Schwab could make the merger feel something closer to a homecoming for RIAs, according to Kitces.

Bradley could not be reached to comment about his new position at Schwab.

Schwab has been “building a more modern service model” in recent years to better accommodate more RIAs regardless of their size, including those managing less than $100 million, it said in Friday’s announcement. Among those changes, it says it has improved virtual business consulting for RIAs, lowered fees for trading mutual funds and launched a portfolio management system free for RIAs to use.

Bradley, who worked more than 30 years at TD Ameritrade before leaving the company in 2017, is expected to further those improvements and play a leadership role during the integration of the two businesses.

“We’ve known Tom personally for years, and have long admired his successful track record working across the investment services community. Tom knows the independent advisor space in great detail, and we’re fortunate to be able to add his depth of experience and breadth of industry relationships to our Advisor Services leadership team,” Clark said in a statement.