TD chief: UK seeing democratisation of financial services

It is being brought about by changes in both the regulatory and technology environments that have put power back into the hands of the consumer.

People want the same tools, capabilities, opportunities and services as every other participant in the marketplace.

“They don’t want to be force-fed into a model,” says Tracy. “That’s a trend I see a lot.”

He is the head of TD Direct Investing (Europe), the Leeds-based provider of online investing services.

It is part of the Toronto-Dominion Group, one of the world’s biggest banks.

Tracy, a Florida native with eight years at TD in Canada, took on the Yorkshire role just over a year ago.

We meet late one afternoon in early July at the Malmaison hotel in Leeds.

Tracy accepts my crude description of his offer as “stockbroking with smartphones” as “a fair characterisation”, but insists that even though it is a digital business, TD Direct Investing has a large call centre with more than 100 people to provide support to consumers.

When people are making investment decisions, they like to know a human being is on hand to call if they have an issue, he says.

Tracy has a brief to grow the business. “We know there is a need in the UK for consumers to have help managing their money,” he says.

He believes that the introduction of the Retail Distribution Review (RDR) in 2013 - which aimed to introduce greater transparency into the provision of financial advice - and subsequent shake-ups to pensions and individual savings accounts have created a gap in the market for TD Direct Investing.

“What’s happened with all the regulatory changes is there is a group of people that can no longer get served the way they used to,” says Tracy.

“The Government, not uncommon to any other developed country, is saying we need you, individual person, to take more responsibility in looking after your personal affairs.”

RDR has made consumers think differently about paying fees for financial advice and led to a more critical questioning and appraisal of service, he says.

“That’s a great thing for us because we are a direct business. That means a lower cost base, a better overall value.

“There’s a lot of people who think serving really rich people is the sexy part of stockbroking or wealth management. What we are here for is to help everyday people.

“The average UK person is trying to save for a child’s education or to retire one day or to buy a home.

“We are a great place for them to get help. That’s what we get excited about - it’s just everyday people.”

He says that trust is also a big issue for consumers.

“It’s particularly stark to someone like me, who has come from Canada where being a banker is still a very noble profession, to come to the UK and you see that there is a lot of anger and mistrust of banks.

“I think people feel burnt. They are looking at alternatives because they may not trust they high street bank.”

Unlike many of its rivals in financial services, TD Direct Investing is not burdened by an expensive branch network. Instead, the business is investing in technology, mainly in digital platforms for smartphones and tablets.

Tracy says: “There’s no question where the majority of growth is being driven - in the mobile space.

“People are getting so used to great apps on their phones and tablets that the way they are expecting technology to work is changing so fast. That gives us an opportunity to be a bit disruptive.”

He says that TD Direct Investing does a greater proportion of trades via smartphone and tablet in the UK compared to its sister businesses in North America.

UK consumers with a propensity to invest directly in the stock market are increasingly demanding the same opportunities as other market participants, he adds.

“People now say ‘I don’t want to just be relegated down to the kind of historical solutions that I have been offered’,” he adds.

Competition is fierce in the £160bn market for investing directly in equities and rivals include the likes of Hargreaves Lansdown and Barclays Stockbrokers.

Tracy says TD spends a lot of time and effort on “best execution” and proving that it can provide the most competitive service for consumers.

Tracy is steeped in financial services. He joined TD Wealth Management in 2007 after roles at Royal Bank of Canada’s brokerage services division, Accenture’s wealth management practice and Bank of America.

He believes that Leeds is “underappreciated” as a financial services centre and highlights its strengths in operations, technology and client services.

He is also complimentary about the quality of life.

“Where can you live in a place like Harrogate and work in a place like Leeds? I find Leeds way underappreciated.

“Great restaurants, great culture, great people. I feel lucky to be here.”