TD Ameritrade Institutional, Division of TD Ameritrade, Inc.TD Ameritrade, Inc., member FINRA/SIPC/NFA, is a subsidiary of TD Ameritrade Holding

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1 TD Ameritrade Institutional, Division of TD Ameritrade, Inc.TD Ameritrade, Inc., member FINRA/SIPC/NFA, is a subsidiary of TD Ameritrade Holding Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

2 Survey Methodology These results are based on a survey conducted by Maritz, Inc. on behalf of TD Ameritrade Institutional, a division of TD Ameritrade, Inc. Five-hundred and two registered investment advisors ( RIAs ) participated in a telephone survey from Dec. 15, 2012 Jan. 11, 2013 Independent RIAs who custody with TD Ameritrade Institutional, as well as other independent RIAs from across the country were asked to share their views on the economic outlook for their firms and the advisor market in general. The margin of error in this survey is ±4.4%. This means that in 19 cases out of 20, survey results based on 502 respondents will differ by no more than 4.4 percentage points in either direction from what would have been obtained by seeking the opinions of all eligible RIAs. Maritz, Inc. and TD Ameritrade, Inc. are separate, unaffiliated companies and are not responsible for each other's products and services. 2

3 Top Business Concerns Among RIAs Regulatory Changes Still Weigh On Advisors Mind Regulatory changes Macro-economic environment Profitability Managing Risk (legal and compliance issues) Business Growth Marketing Operational Efficiency Product Pricing Recruiting and Retaining Talent Succession Planning Mergers and Acquisition 10% 10% 8% 7% 9% 14% 11% 5% 7% 40% 32% 24% 22% 31% 19% 27% 24% 20% 23% 21% 17% 15% Q Q Q: How concerned are you about the current economic climate and its impact on your practice during the next 12 months? On a scale of 1-10, where 10 means Extremely concerned and 1 is Not concerned at all, how concerned are you with (INSERT ITEM FROM LIST)? Totals do not equal 100% due to rounding. 3

4 Business Concerns Among RIAs Shift in Focus from Profitability to Growth over next 12 months 20% Business Growth + 3 points 23% 31% Profitability 19% - 12 points 21% Marketing - 11 points 10% Q Q Q: How concerned are you about the current economic climate and its impact on your practice during the next 12 months? On a scale of 1-10, where 10 means Extremely concerned and 1 is Not concerned at all, how concerned are you with (INSERT ITEM FROM LIST)? 4

5 RIAs Report A Majority of New Client Assets Come From Full-Commission Firms 1 Advisors Anticipate Uptick in AUM 57% 56% Nearly 9 in 10 RIAs expect a faster AUM growth rate in % 25% 12% 7% 6% 8% Full-commission firms Other RIAs Banks Other places Q212 Q213 Q1: Where do you see the majority of your firms new assets, from both new and existing clients, coming from? Percentage of assets from full-commission firms reported came from wirehouses and broker-dealers Q2: In the next six months, do you anticipate the assets under management (AUM) for your firm to experience a slower rate of growth, faster rate of growth, or remain the same? Percentages not equal to 100 due to rounding. 5

6 Revenue Growth Remains Consistent RIAs see increase in revenue and total number of clients remains steady 97 percent of RIAs report total number of clients increased or remained steady over the past six months 1 RIAs reported an average revenue growth rate of 15 percent 2 and added clients at an average rate of 12 percent, 3 up slightly from one year ago (11 percent). Total Clients Growth Loss No Change 6% 22% 72% 37% 60% 3% Q Q Q1: Has the total number of clients served by your firm decreased, increased or remained about the same over the past six months? Q2: By approximately what percentage has your firm s revenue grown? Q3: In the past six months, at what percentage rate are you adding new clients? 6

7 Advisors Planning for Additional Growth Improved technology, client service and training scheduled over next six months Advisors Top Tools for Strategic Planning 1 Conducting internal strategic planning discussions (67 percent) Using benchmarking studies and/or white papers for guidance (37 percent) Conducting workshops sponsored by custodian or other vendors (20 percent) Top Strategic Initiatives implemented for firm growth 2 Deploying technology to increase scale (63 percent) Systematizing client service and delivery (58 percent) Training and developing staff skills (58 percent) 15 percent of RIAs are not implementing any strategic planning and are not anticipating any growth in the next six months 1 Q1: In the next six months, which of the following types of strategic planning are you currently implementing or planning to implement to grow your business? Q2: In the next six months, which of the following types of strategic initiative are you currently implementing or planning to implement to help position your firm for growth? 7

8 Advisors Aim to Expand Client and Revenue Base RIAs woo new clients by adding new markets, expertise and products 1 Adding New Niche Clients (e.g., doctors, lawyers, pilots, etc.) 40% 34% Adding New Markets (e.g., retirement plans, foundations, etc.) Adding New Expertise (e.g., estate, tax, investment, etc.) 7% 17% 26% 26% Adding New Products (e.g., alternatives, life insurance, annuities, etc.) Considering Other Strategies Not Considering Strategies and No Growth Anticipated Nearly all advisors (97 percent) anticipate marketing and business development spending with increase or remain the same over the next six months percent of advisors indicate an increasing marketing and business development spending in the next six months 2 Q1: Over the next six months, which of the follow strategies are you considering to attract new clients Q2: Over the next six months, do you anticipate your marketing and business development spending will 8

9 Referrals Rule Majority of advisors growth opportunities comes from referrals 1% 1% 4% 4% 3% 11% 17% 56% Client Referrals Center of influence referrals (attorney, CPA) Third-party referrals (custodian, industry, association, online programs, etc.) Hire dedicated sales person(s) Seminars Advertising Social Media Public Relations Other tactics 84 percent of RIAs feel some type of referral provides their firm the greatest opportunity for growth Q1: Over the next six months, which one of the following marketing and sales tactics do you feel provide the greatest opportunity to grow your firm? Q2: Over the next six months, do you anticipate your marketing and business development spending will 9

10 Advisors Beefing Up Infrastructure Technology is top investment to accommodate business growth Technologies advisors are considering investing in to help drive growth 2 RIAs said investing in technology (63 percent) is the top infrastructure investment they anticipate making over the next six months to accommodate business growth 1 No Investments Other Technologies 7% Portfolio Rebalancing Tools 18% Social Media Financial Planning Tools Portfolio Accounting Client Facing Tools (i.e., website portals, etc.) Document Management Tools Mobile Devices (i.e. ipad or other tablet, smartphone, etc.) Performance Reporting Tools 22% 23% 23% 26% 27% 28% 28% 31% Customer Relationship Management (CRM) Tools 33% Q1: Over the next six months, what infrastructure investments do you anticipate making to accommodate business growth? Q2: Which of the following technologies are you considering investing in to help drive your growth? 10

11 Advisor Headwinds RIAs identify top hurdles they face in 2013 Top Industry Trends Pose a Challenge 1 Increased Compliance Requirements (57 percent) Regulatory Changes (56 percent) Aging Client Base (56 percent) Market Volatility (51 percent) Generational Wealth Transfer to Non-Clients (44 percent) Majority of advisors (71 percent) are not considering M&A activities as a growth strategy 2 Of those advisors considering M&A activities, top strategies include acquiring another firm (14 percent), adding new partners/owners (13 percent) and merging with another firm (11 percent). Q1: Over the next 6 months, which of the follow industry trends or issues may impact your ability to grow? Q2: Over the next 6 months, which of the following merger and acquisition activities are you considering as a part of your growth planning? 11

12 About Maritz St. Louis-based Maritz is a sales and marketing services company, which helps companies achieve their full potential through understanding, enabling, and motivating employees, channel partners, and customers. Maritz provides market and customer research, communications, learning solutions, incentive initiatives, rewards and recognition, effective meeting, event and incentive travel management services, and customer loyalty programs. For more information, visit or contact us at MARITZ. About TD Ameritrade Institutional TD Ameritrade Institutional 1 is a leading provider of comprehensive brokerage and custody services to over 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. About TD Ameritrade Holding Corporation Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade s (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. 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 36 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit the TD Ameritrade s newsroom or for more information. Brokerage services provided by TD Ameritrade, Inc., member FINRA ( /SIPC ( /NFA ( 1 TD Ameritrade Institutional, a division of TD Ameritrade, Inc., member FINRA/SIPC/NFA, a broker dealer subsidiary of TD Ameritrade Holding Corporation. Maritz, Inc. and TD Ameritrade, Inc. are separate, unaffiliated companies and are not responsible for each other's products and services. 12