Brokerage still feels Ricketts' impact

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The idea started with green beans and canned corn.

J. Joe Ricketts — the founder, former chief executive and board chairman of the company that grew into what is today TD Ameritrade — noticed that his wife, Marlene, was buying the cheaper, nonbranded vegetables during her trips to the grocery store. At the time, the couple were starting a family and didn't have much money.

"So I said, I'm sure there's a market out there for people willing to buy a plain-label brokerage firm if we can have enough volume ... to make a profit," Ricketts said during a video that aired Tuesday during TD Ameritrade's annual shareholder meeting at the Hilton Omaha downtown.

It was Ricketts' first meeting since he retired from the company's board of directors in October to focus on growing a handful of entrepreneurial ventures he's started in recent years.

As it turns out, Ricketts was right about his plain-label brokerage. People did buy into it when he started First Omaha Securities in May 1975 as one of the first brokerage firms that didn't lend investment advice, instead offering trades at a discount.

Many times, Ricketts said Tuesday, his decisions weren't the right ones.

He once sunk more than $100 million into a venture that quickly failed. Ricketts said the idea — an Internet-based consolidated banking, trading and financial services platform called OnMoney.com — was ahead of its time.

But when his ideas hit it big, he hit it really big. Ricketts was one of the first to bring traders the option of making transactions through their touch-tone phones. After the new technology was released amid criticism and against the advice of Ricketts' colleagues, traders who were making four or five trades per year soon were making 20 or more, said Pete Ricketts, Joe Ricketts' son and a TD Ameritrade board member.

Then, in August 1994, TD Ameritrade made its first trade through the Internet. It was a basic email that instructed the company to buy 300 shares of a security, Joe Ricketts said.

The rest of the brokerage industry didn't start offering online trading until the late 1990s.

"I know I'm different," Ricketts said. "Generally, when a crowd of people say 'don't do it,' I usually know that's when to do it."

That mind-set, said TD Ameritrade CEO and president Fred Tomczyk, is what helped the company disrupt the brokerage industry.

"No one, in my mind, has had a more profound impact on a company and an industry than Joe Ricketts," Tomczyk said.

Ricketts' success with TD Ameritrade has made him enormously wealthy. Ricketts and his family now own the Chicago Cubs, a deal that was financed by some 34 million shares of TD Ameritrade stock they sold in 2009 for roughly $400 million.

Tomczyk said Ricketts continues to have influence at TD Ameritrade. His sons, Todd and Pete, are both on the company's board of directors, and Tomczyk said he talks occasionally with the man who founded the company "just like I talk to any shareholder."

Tuesday, Joe Moglia, TD Ameritrade's board chairman and also the head football coach at Coastal Carolina University, thanked Joe and Marlene Ricketts for choosing him as Ricketts' successor to head TD Ameritrade in 2001.

"There's probably not a single thing in my life that I feel more grateful for," Moglia said. "I would not have been given that opportunity without Joe Ricketts.

"I will always be grateful for the opportunity you've given me. I thank you for that," Moglia continued, choking back tears.

After a short ceremony, Tomczyk unveiled a painted portrait of Ricketts that will hang in the company's new headquarters, currently under construction in the Old Mill area.

The ceremony, Ricketts said, made him think back about his career with the company. He talked about the company's first trade. Its first monthly profit — $700. And how dozens of employees became independently wealthy through the company's stock plan.

"I normally don't look back," Ricketts said. "I normally think about the excitement and the future."

Now, Ricketts, 70, plans to spend his time focusing on his new businesses, including DNAinfo.com, a hyper-local news provider in New York; The American Film Co., which produces films based on historic events; the Lodge at Jackson Fork Ranch; and High Plains Bison, one of the largest bison meat retailers in the United States.

And possibly launching some new ventures. "Starting (TD Ameritrade) was a lot of fun. That's the part that I like the best."

Contact the writer:

402-444-1414, ross.boettcher@owh.com

twitter.com/rossboettcher

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