Brian Davis, the new director of adviser services for Scottrade Advisor Services, will not be making any drastic changes to the asset custodian business that the St. Louis discount retail brokerage launched five years ago.
There is no pressing need to do that right away, he said. Registered investment advisers like its low-cost retail trading platform so much that they started using it years before the company established the custodian business in 2005.
Last year, when Davis was the division's business development manager, the number of advisers using its custody, trading and other back-office services grew by 44%.
Scottrade Advisor Services' other additions in 2009 included allowing for institutional block trading; advanced cost-basis reporting; institutional mutual funds; a practice management newsletter; and portfolio reporting services through its Portfolio Director suite of planning tools.
Scottrade now serves 750 RIAs. In this business, that is tiny compared with a provider like Schwab Advisor Services, with its 23-year track record and 6,000-adviser client base. Davis, though, is undaunted.
"We're growing in the right direction," he said.
He attributed the growth in Scottrade's RIA head count in part to the breakaway broker trend, and the fact that the company does not combine in-house financial advice or investment recommendations with its brokerage services.
For its part, Davis said, Scottrade will focus on client service, while making its own improvements in technology. "There are over 30,000 RIAs and the number continues to grow … every day. There is plenty of opportunity for all of us to compete in this market."
Davis knows all about the competitors around him, and actually had been a business development officer for Schwab Advisor Services. He said he is convinced that Scottrade Advisor Services can continue to thrive in a competitive marketplace, where more established custodians are making forward strides in the areas of business consulting and technology. Davis also managed the group after the former director, Doug Talir, left about a year ago, according to press reports.
