Omaha, NE-based online brokerage firm TD Ameritrade Holding Corporation (AMTD) came out with its average client trades per day of 493,000 in its activity report for Jan 2015. This jumped 12% from the prior month though it was down 1% 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 Jan 31, 2015, TD Ameritrade reported $668.9 billion in total client assets, down 1% from the prior month while it was up 14% year over year. Further, average spread-based balance of $94.1 was unchanged as compared with the prior month but was up 3% year over year. Additionally, average fee-based balances were $151.9 million, stable as compared with the prior month but rising 14% year over year.
Quarterly Performance
Average client trades per day in fiscal first-quarter 2015 increased 10.5% year over year to 457,243. Further, at the end of the quarter, net new client assets totaled $18.8 billion, up 29.7% from the prior-year quarter end.
At quarter end, TD Ameritrade reported total client assets of $672.4 billion, up 12.7% year over year. Moreover, average spread-based balance was $94.5 billion, increasing 4.7% year over year, while average fee-based investment balance increased 15.5% to $150.7 billion.
Our Viewpoint
With gradually improving investors’ confidence, firms like TD Ameritrade are expected to benefit. Also, the broader trend in the investment brokerage industry should help drive growth.
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.
Amid a volatile operating environment, TD Ameritrade witnessed a continuous rise in both organic client assets and trading volumes, which bode well going forward. 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 reported a rise in its brokerage metrics for Jan 2015. Total customer Daily Average Revenue Trades (DARTs) were 676,000, up 16% from Jan 2014 and 15% from Dec 2014. Further, total customer accounts were 284,900, up 17% from the prior-year month and 1% from the preceding month.
The Charles Schwab Corp. (SCHW) is expected to report its monthly metrics later this week.
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