Omaha, NE-based online brokerage firm TD Ameritrade Holding Corporation (AMTD) came out with its average client trades per day of 428,000 in its activity report for November. The reported figure declined 13% from the prior month while it increased 3% compared with the prior-year period.
Broker performance is generally measured through monthly average client trades per day. It represents the number of trades from which brokers earn commissions or fees.
As of Nov 30, 2014, TD Ameritrade reported $675.0 billion in total client assets, up 2% from the prior month and 16% year over year. Further, average spread-based balance of $94.2 billion increased 1% from the prior month and 5% year over year. Additionally, average fee-based balances were $152.5 billion, up 3% from the prior month and 17% year over year.
Quarterly Performance
Average client trades per day in fiscal fourth-quarter 2014 increased 5.5% year over year to 402,638. For full-year fiscal 2014, average client trades per day increased 14.3% year over year to 426,888. Further, at the end of the quarter, net new client assets stood at $13.4 billion, up 32.7% from the prior-year quarter end.
At quarter end, TD Ameritrade reported total client assets of $653.1 billion, up 17.5% year over year. Moreover, average spread-based balance was $92.9 billion, increasing 4.6% year over year and average fee-based investment balance increased 17.7% to $144.0 billion.
Our Viewpoint
TD Ameritrade has been diligently making efforts to keep up its asset gathering momentum over the past few years. Sustaining the trend, fiscal 2014 marked the sixth consecutive year of double-digit asset growth as the company witnessed a record $53 billion in net new client assets, reflecting an annualized growth rate of 10%. With gradually improving investors’ confidence, firms like TD Ameritrade are expected to benefit in the near term.
Innovations in online trading, long-term investment in products and services, delivery of advanced customer services, creative as well as cost-effective marketing and sales, along with prudent expense management are TD Ameritrade’s key strategies to boost its trading and investing business.
Further, the company’s association with The Toronto-Dominion Bank (TD) provides an opportunity to cross sell its products. This is expected to significantly drive organic growth.
However, we remain cautious as a continuous rise in expenses, a low interest rate environment and stringent regulations may weigh on the company’s financials in the upcoming quarters.
At present, TD Ameritrade carries a Zacks Rank #3 (Hold).
Among other investment brokers, Interactive Brokers Group, Inc.’s (IBKR) Electronic Brokerage segment recorded a sequential decrease in brokerage metrics for Nov 2014. However, on a year-over-year basis, brokerage metrics performed decently. Total customer Daily Average Revenue Trades (DARTs) were 576,000, up 13% from Nov 2013 but down 15% from Oct 2014.
The Charles Schwab Corp. (SCHW) is expected to report its monthly metrics later this week.
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