From regulation to technology to the revenue structure, futures commission merchants have experienced drastic changes over the last 30 years, as Tom Kadlec, CEO of ADM Investor Services, knows full well. In this John Lothian Profiles piece, Kadlec talks about his career in the futures markets, the importance of mentoring, current challenges and opportunities, and “The ADM Way.”
In the winter of 1980, in the final stages of earning his accounting degree, Kadlec had a career chat with one of his finance professors at the University of Iowa, who suggested he try his hand at this “new business” – the futures markets. And so he did. He joined ADM Investor Services in 1990, and one of his first jobs was to check and ensure that the customer segregated account balances were in order, in the aftermath of the bankruptcy of rival FCM Stotler & Co. “I’d like to think that I got it in balance, post-Stotler, and it hasn’t been out of balance since. I’d like to think that.” Back then, ADMIS had about $60 million in customer seg assets. Today, that figure is over $6.5 billion globally.
In 2010, long-time head of ADMIS Richard Dodson, announced his retirement, and Kadlec took the reins. He considers Dodson his friend and mentor, and their relationship allowed for a smooth transition. “He was very patient with me,” says Kadlec. “I talked to him every day for 19 ½ years, and we would discuss all of the good things, as well as the challenges. We would almost always get to the right place. Sometimes he would go my way; most of the time I went his way, but it wasn’t all his way. He would take in input, and we would get to the right place.” Kadlec has worked to incorporate Dodson’s patience and meticulous organization into his management style.
Kadlec admittedly has learned some lessons along the way. Markets, he says, are larger than any one person, and can be quite humbling when one is on the wrong side of the trade. As head of an FCM, his challenge is to balance the broker/customer relationship. “Egos, and being right nine days in a row are not necessarily good things, and sometimes the best trade is just getting out of the way of the freight train.”
In the early days of Kadlec’s tenure, the bankruptcy of MF Global rocked the futures world, and the ADMIS readily accepted the challenge. “We dug down deep as a firm. Our IT staff did a phenomenal job. MF Global went bankrupt on a Monday, we onboarded 10,000 accounts, and they were up and running Thursday morning.” Part of the success has to do with the FCM’s parent company, agribusiness giant Archer Daniels Midland. “We think the ADM name is meaningful. ADM, as I learned quickly, has a fair amount of assets that they can throw at a problem or challenge, to resolve things quickly, and that’s what we do.”
That viewpoint, from a commitment to customer service to a “we’re in it for the long haul” attitude is part of what is known internally as “The ADM Way.” It also seems to be the Kadlec way.