Tim Wiggan, Head of Wealth Management & Insurance at TD, says financial planning advice is the fastest-growing service in Canada.Christopher Katsarov/The Globe and Mail
The average lifespan of a do-it-yourself investor at TD Direct investing is four years.
After that, with regulators prohibiting online trading platforms from providing any type of investment advice, many customers begin to search for more hands-on guidance as their investment plans become more complex. In order to keep competitors at bay, TD TD-T is now trying to capitalize on its large slate of full-service investment advisers and financial planners to create new relationships, according to Tim Wiggan, the group head of TD Wealth and Insurance.
Currently, there are about 80,000 TD Direct Investing account holders who already have a relationship with a TD financial planner – an area of the advice business that Mr. Wiggan says is the fastest-growing in Canada.
Over the next 18 months, the bank will add another 100 planners to the business. While TD declined to comment on the current total number of financial planners at the bank, Leo Salom, the bank’s former head of wealth, said in 2021 there were about 1,100.
The growth is part of a companywide referral program called “One TD” that has seen a number of do-it-yourself (DIY) investors and banking clients forge stronger ties to the bank through relationships with financial planners, investment advisers and personal bankers.
“Direct investing is often the first investment experience a client has,” Mr. Wiggan said in an interview. “In a perfect world it is a highly simplistic task for them. But from there they look to move into mass affluent financial planning or want to work with an investment adviser for trust and estate planning or move into services for high-net-worth clients.”
It’s a “spectrum of interaction,” he adds.
After the pandemic began in early 2020, Canadians amassed billions of dollars in savings as COVID-19 lockdowns limited their spending opportunities, and there has been a surge in the number of investors opening up online trading accounts.
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In Canada, there are more than 11.9 million trading accounts, as of March, 2024, according to data provided by Investor Economics, an ISS Market Intelligence business. That is an 8.3-per-cent jump from the year before, and a 60-per-cent increase from the 7.4 million accounts held in December, 2019.
The DIY boom provides TD – which runs one of the largest online trading businesses in Canada – with a major funnel of new clients coming to the bank, including many younger clients who are new to investing and building up wealth.
However, over the last decade the banks have seen fierce competition from the rise of independent trading platforms looking to gain market share with lower-cost trades and easy-to-navigate mobile applications.
“The competition and the pace of innovation has been continuous, but it’s also accelerated,” Mr. Wiggan said. “And now, there can be low barriers to entry [in trading platforms], so you have to be thinking ‘How are you going to compete?’ ”
While price is something you have to be mindful of, he adds, there are other aspects DIY investors are looking for, such as functionality.
TD Direct offers various levels of service for DIY investors including 50 free trades per year for clients on TD Easy Trade, educational videos on how to trade for newer investors and the recent launch of TD Active Trader, a more sophisticated platform for active traders who want advanced research tools and stock charts. There is currently a wait list to join TD Active Trader, which has about 11,000 account holders.
The trading business is an area of the bank Mr. Wiggan knows well. Before his move into wealth management and insurance, he was TD Securities’ co-head of global investing banking where he spent his days overlooking the bank’s trading floor. When the pandemic struck in early 2020, he was instrumental in the bank’s quick decision to move one of country’s largest trading operations – with 357 employees – to remote work.
He joined the bank 24 years ago when TD acquired Newcrest Capital, an institutional equity manager where Mr. Wiggan had spent the earlier part of his career. In 2013, he was appointed CEO of TD Asset Management, where he remained until 2017 when he returned to the investment banking side of the business as head of equities and commodities at TD Securities.
Now, eight months after stepping into his role as head of TD wealth and insurance – where he oversees TD Direct Investing, TD Insurance and the private wealth management and asset management businesses in Canada, United States, Asia and Europe – Mr. Wiggan oversaw an 18-per-cent boost in overall wealth assets during the bank’s fiscal second quarter that ended April 30, as well as an 11-per-cent jump in revenue.
Some of that growth is attributed to market conditions, higher insurance premiums and fee income from the wealth business. But it’s also owing to asset growth, and increased trades per day in the direct investing business.
The growth in the wealth operation – which currently manages more than $489-billion in assets – comes as TD has faced lengthy probes by U.S. regulators and the Department of Justice for weaknesses in its anti-money-laundering procedures after an employee in the U.S allegedly helped move millions of drug-trafficking money from the United States to Colombia.
Mr. Wiggan said the bank has not lost any advisers or clients over the situation. He said he has been more present in person, talking face-to-face with his employees in town halls to “take a pulse” during the difficult time for the bank.
“It’s communication,” he says, when asked how he has maintained confidence with clients. “It’s communicating internally and communicating to the customer, which would apply both to retail client and institutional.”