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Understanding TD Ameritrade’s Growth in New Client Assets

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Strong growth

In fiscal 2017, TD Ameritrade Holding (AMTD) saw strong growth in net new client assets. According to management, all channels contributed to growth. Its net new client assets were $80 billion.

TD Ameritrade has a market capitalization of $28.3 billion. Its peers (XLF) Morgan Stanley (MS), Interactive Brokers Group (IBKR), and LPL Financial Holdings (LPLA) have market capitalizations of $91.6 billion, $21.3 billion, and $4.8 billion, respectively.

In fiscal 2017, TD Ameritrade’s retail channel saw a high number of visits to the website and a significant rise of 35% in new accounts YoY (year-over-year). In fiscal 2017, it saw strong asset inflows and significant growth YoY, which also came from new accounts.

Institutional channel

According to TD Ameritrade, its financial consultants provide various services to clients that help its consultants improve relationships. The company says its institutional channel has remained very active in terms of asset inflows in fiscal 2017. Its institutional channel saw a substantial rise of 50% in net new client assets in fiscal 2017 on a YoY basis.

TD Ameritrade’s efforts toward digitization and sales models resulted in reduced costs in order to meet client needs. These efforts resulted in gathering assets from the past few years.

According to management, TD Ameritrade is expected to report net new client assets of $80 billion–$100 billion in fiscal 2018.

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