TD Ameritrade Holding Corp. President and CEO Timothy Hockey believes that robo-advisers in use are "rudimentary" compared to technology set to emerge in the next five years.
"The revolution that's going to be happening as a result of technology ... is going to be like nothing we've seen before," Hockey said at Sandler O'Neill's Global Exchange & Brokerage Conference on June 7.
Hockey, who said a key part of his job is increasing the "metabolism of the firm," believes that technology is a core area for 2017 the discount broker/dealer, particularly as it works to close its acquisition of Scottrade Financial Services Inc.
Meanwhile, the pricing war that took some of the largest online brokerages by storm was just one driving factor in a largely successful first quarter for the industry, he said.
TD Ameritrade, Charles Schwab Corp., E*TRADE Financial Corp. and Fidelity Investments were caught in the midst of a price-cutting race for the lowest rates. On March 1, TD Ameritrade lowered its commission fee for online equity and exchange-traded funds to $6.95 per trade from $9.99.
The industry's first-quarter gains could be attributed to increased media attention around the pricing cuts along with heightened preparations for the Department of Labor's Conflict of Interest Rule, he said.
Hockey said the increased media attention "really woke up clients," prompting further trading activity. And while the price cutting continued, brokerages were also still preparing for the Labor Department's fiduciary rule. Hockey said the company expected a spike in "money in motion" as work was done ahead of the rule's June 9 implementation.
"If you look back now in hindsight and do the put and takes of the industry overall, it feels to me like almost all ships floated on that tide," he said.