TD Ameritrade Q3 Earnings Fall, but Net New Client Assets Up 23%

In an interview, Dorsey said he was "pretty confident" that TDAI would finish the year with a record number of breakaways added to its platform. In what Dorsey called a "very, very competitive market," he said TDAI was "winning more than our fair share" of breakaways. He cited TD's "conflict-free" platform, its open-architecture approach to technology and its "targeted marketing" efforts for those wins.

Of those 324 breakaway brokers, Dorsey said 27% joined existing TDAI RIA firms as "tuck-ins," with the remainder "hanging up their own shingle" as independent RIAs. Those forming their own firms tended to be larger practices, with around $100 million in assets under management, while the tuck-ins tended to be smaller practices.

The breakaways are coming from both the full-service wirehouses and "semi-independent" brokerage firm models. Further, he said the retention contracts signed by many wirehouse brokers during the 2008 financial crisis have been expiring over the past six to nine months, leading many to consider the independent model. Many of those brokers' clients are also pushing them toward the independent model, he said.

Existing RIA firms that are successful in adding tuck-ins do so, he said, not simply to add assets, but because the principals of the acquiring firms know the acquisition will be accretive to earnings and a cultural fit, and because they feel confident in being able to manage the additional assets and clients. That means that existing RIA firms who want to grow through these tuck-ins often "have to kiss a lot of frogs," Dorsey said, before finding a breakaway broker who will meet those criteria.