Online brokerage firm, TD Ameritrade Holding Corporation (AMTD) reported a 22% rise in average client trades per day in its Activity Report for Jan 2014. Further, client trades increased 28% on a year-over-year basis.
For the reported month, average client trades per day were 496,000, up from 405,000 in the prior month and 387,000 in the prior year.
For the month, TD Ameritrade reported $588.8 billion in total client assets, up 18% year over year but down 1% from the previous month. Moreover, average spread-based balances rose 10% year over year to $91.7 billion. Further, these balances increased 1% from the prior month.
At the end of January, average fee-based balances were recorded at $132.9 billion, which surged 23% year over year and was in line with the last month.
Quarterly Performance
Average client trades per day in first-quarter fiscal 2014 increased 24% year over year to 413,743. However, net new client assets were $14.5 billion, down 7% from the past year.
At the quarter-end, TD Ameritrade reported total client assets worth $596.5 billion, up 24% year over year. Moreover, average spread-based balance was $90.3 billion, up 14% from $79.3 billion in the prior-year quarter. Average fee-based balance was $130.5 billion, up 31% year over year.
Our Viewpoint
Innovations in online trading, long-term investment in products and services, delivery of advanced customer service, 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 be a significant growth driver for TD Ameritrade’s organic assets.
Amid a volatile operating environment, TD Ameritrade witnessed a rise in both organic client assets and trading volumes, which bode well going forward. However, a low interest rate environment and stringent regulations pose challenges.
At present, TD Ameritrade carries a Zacks Rank #2 (Buy). Among other investment brokers, The Charles Schwab Corporation (SCHW) and E*TRADE Financial Corporation (ETFC) are expected to report their monthly metrics by the end of this week.
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