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Could TD Ameritrade’s Client Assets Stay at December Levels?

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Aug. 18 2020, Updated 6:25 a.m. ET

Client assets

TD Ameritrade Holding (AMTD) ended its December quarter with a record $695 billion in client assets, a 3% rise from the previous year. In the March quarter, client assets were initially impacted by a decline in equities during January and February. However, assets have recovered in the equities rally of March 2016. Overall, client assets are expected to be in line with the December quarter.

TD Ameritrade’s average fee-based investment balances also hit a record $157 billion, up 5% year-over-year. Interest-sensitive assets were $110 billion, up 9% year-over-year. The company added net new client assets of $17 billion, a 10% annualized growth rate. That’s the second-best asset-gathering quarter in the company’s history, second only to the December 2014 quarter.

Here’s how a few of TD Ameritrade’s peers in the brokerage industry fared in terms of net profits in the last fiscal year:

  • Interactive Brokers Group (IBKR): $459 million
  • E*TRADE Financial (ETFC): $293 million
  • Charles Schwab (SCHW): $1.3 billion

Together, these companies form 0.26% of the SPDR S&P 500 ETF (SPY).

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New initiatives

TD Ameritrade continues to see strong performance in its retail and institutional channels. The retail channel delivered year-over-year growth in net new assets mainly due to branch lead referrals. The company’s efforts to further refine and optimize its acquisition marketing spends are yielding higher quality new accounts.

The branch lead referrals were down marginally, but the average size of referral increased, leading to a rise in total gathered assets. For the institutional channel, the company had its second-best quarter ever in terms of net new client assets but fell year-over-year due to slower growth from existing registered investment advisers.

The company is launching new advertising that targets long-term investors and promotes Amerivest. It also expects increased rollover and retirement to take advantage of opportunities provided by the tax season.

Read on to the next part to see if increased volatility could drive TD Ameritrade’s daily trades.

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