TD Ameritrade: What Led to Rise in These Expenses?
Employee compensation expenses
In fiscal 3Q17, TD Ameritrade Holding (AMTD) incurred employee compensation and benefits-related expenses of $234.0 million compared to $209.0 million in fiscal 3Q16, reflecting a rise of 12.0%. The rise was due to an increase in incentive-based compensation. However, the company also increased its number of employees from 5,872 in fiscal 3Q16 to 6,454 in fiscal 3Q17, which also contributed to the rise in those expenses.
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From fiscal 1Q17 through fiscal 3Q17, TD Ameritrade incurred employee compensation and benefits-related expenses of $677.0 million. From fiscal 1Q16 through fiscal 3Q16, those expenses were $617.0 million.
Clearing and execution expenses
TD Ameritrade has also witnessed a rise in its clearing and execution expenses, from $35.0 million in fiscal 3Q16 to $38.0 million in fiscal 3Q17, reflecting a rise of 9.0%. The increase was due to the rise in trading volumes in 3Q17.
Return on invested capital
TD Ameritrade has delivered a return of 3.0% on invested capital as of June 30, 2017. Other brokerage giants (XLF) have delivered the following returns on invested capital as of the same date: