On February 22, 2018, TD Ameritrade Holding (AMTD) made an announcement regarding the results of a survey that focused on financial literacy among investors. According to the survey, 76% of investors believe that getting proper knowledge regarding investing techniques would help them manage their funds more effectively.
The survey also showed that 60% of investors believe they should have understood the effective utilization of money in the earlier stages of their lives. However, 72% think the principles of investing have been touched on in school and that Americans could manage their money more effectively.
What management has to say
According to TD Ameritrade management, many people are not aware of the various financial tools available, and since the company also offers financial education, it could help create awareness in this area. The company believes that since the markets are experiencing volatility, investors may want to get more financial education to dodge the negative impacts.
In January 2018, the use of TD Ameritrade’s financial education rose 63% on a YoY (year-over-year) basis. Management said that having knowledge regarding the principles of investing as well as the markets would enable people to manage their funds for the future.
AMTD’s return on invested capital was 2.8% on an LTM (last-12-month) basis. Returns on invested capital for peers Gain Capital Holdings (GCAP), PNC Financial Services (PNC), and Morgan Stanley (MS) were 10.4%, 1.3%, and 0.89%, respectively, on an LTM basis.