commissions from advice. It created the whole innovation of the independent financial advisor, which are very big and fast-growing. We hold, I think, $ 1.5 trillion for advisors. It is a massive business. I don’ t know what Joe’ s numbers are, but they’ re larger than ours I am sure.
Together, we were able to create for them a business that was never possible before because Wall Street wanted to control everything. So our brand of mavericks helped, I think, in many ways to create a new democracy in investing. It is in my mind proof that competition is a major source of wonderful and highly-useful information and innovation. Joe and others like him have led a modern revolution of access and participation. That is something we all must continue to help Americans to reach the [ goal of ] financial security. It is a desperate thing out there right now. I won’ t go into those numbers, but they need our help right now. I think that is why we are in business, because of that issue.
I now want to introduce Fred Tomcyzk, who was the CEO [ of TD Ameritrade ] more recently, now retired, who is going to say a few kind words about Joe.
FRED TOMCZYK
Former President / CEO TD Ameritrade
It’ s pretty special to be at an event tonight honoring two people I would say who frankly don’ t get enough credit for what they’ ve done to change the face of financial services in this country. In 1975, when the
SEC decided to deregulate brokerage commissions, none of the established firms in the industry thought it would amount to anything. Who would risk cannibalizing their business by cutting prices in the oligopoly that existed at the time? It took people like Chuck [ Schwab ] and Joe Ricketts, and people like Rodger Riney, who I see here tonight, from Scottrade, to see the enormous opportunity and to invest in it. These people built an entirely new industry on the premise that the average American deserved the opportunity to save for and invest in their financial future.
Joe Ricketts is a man who wanted to start a nice local business when he started out. He’ d been working for Dean Witter; he had clients, friends and family members who wanted more flexibility in their investing. They wanted to be able to just buy or sell a stock, without having to talk to a stock broker and pay high commissions. They wanted the freedom to just make a trade or transaction or investment. They wanted something more plain vanilla. Not unlike the generic canned vegetables that he saw his wife Marlene buying on the budget he had to feed the growing family. So he took a risk— the biggest risk of his life he would say— and would invest $ 12,500 into an idea he had. Anybody that knows Joe knows he has lots of ideas.
That idea, today, has grown into a top financial services brand worth more than $ 25 billion. But it wasn’ t always easy. The early years were hard. Joe, Chuck and other discounters were small fish compared to the enormous wire house firms. And they needed to find a way to break through.
Now Joe is an ideas man. He’ s always been fascinated by technology and the potential it has to make our ideas easier and more meaningful. Many would tell you that he had more ideas in those early years than he had resources to carry them out.
I just want to talk about one. In the mid-’ 80s he had an idea for offering trades via touch tone phone. Building it, he thought, would bring scale to the company and greater speed to the client, putting his retail investors more on par with the professionals on Wall Street. Now Joe went to his management team and his board and talked to them about that idea, and they all told him it was a bad idea. He did focus groups with clients, and they told him it was a bad idea. But Joe had a feeling in his gut that this was an idea that was bigger than anything they could imagine at the time, so he bucked convention and invested millions of dollars into that idea.
The funny thing was that all of Joe’ s research turned out to be correct. His clients didn’ t want touch tone trading, but another audience did. And these were investors who came to Joe and embraced his new offering and took it one step further, buying automated dialers to enter trades more rapidly than their fingers could push buttons. And that gave birth to the retail active trader.
Now Joe has been successful in business and in life because he’ s always been an innovator and a builder. He’ s always had ideas and lots of curiosity. And like all entrepreneurs he’ s restless— an eternal optimist— and he constantly encourages those around him to push for something better. He was an early adopter of online trading, even going so far as to buy the company that did it first. He poured all of his profits into growing his business and into technology and into marketing and breaking with convention by daring to inject humor into financial advertising. He believed that if you could give everyday Americans the same information and access to Wall Street that professionals had, and you taught them how to use it, there would be nothing to stand between them and their financial futures.
And he delivered. TD Ameritrade has helped tens of millions of Americans invest in a better tomorrow. Today it serves more than seven million client accounts, holding nearly $ 800 billion in assets. All of this was possible because Joe believed, contrary to Wall Street opinion, that retail investors were actually smart and capable, if you armed them with the right information. His goal was to empower them.
Now this enthusiasm and zest for life that Joe continues to have has led to countless pursuits beyond TD Ameritrade. He’ s been involved in numerous philanthropic causes. And one he’ s particularly proud of is the Opportunity Education Foundation, which has touched the lives of 500,000 students attending nearly 1,000 schools in 11 developing countries. And, of course, he and his family brought the World Series championship to the Chicago Cubs for the first time in 108 years. These are all passion projects to Joe— things he’ s
www. MoAF. org | Winter 2017 | FINANCIAL HISTORY 13