TD Ameritrade boasts asset milestone, though client trading idles
TD Ameritrade Holding Corp , the biggest broker for active individual traders, said that client assets in February crossed the $500 billion threshold as the firm seeks to offset flaccid commission income with asset-based fees.
The announcement on Monday accompanied the Omaha-based discount broker's report that client trades in February were essentially flat with January and down 6 percent from February of 2012. The firm's chief financial officer last week signaled that client trades would track the broader market, where stock trading inched up 2 percent while stock options trading fell by the same amount.
TD Ameritrade's flaunting of its half-trillion dollar asset milestone mirrors rival Charles Schwab Corp's announcement last month that its client assets at the firm passed the $2 trillion level. Schwab has not yet announced its clients' trading metrics for February, but they generally make fewer average daily trades than TD Ameritrade's clients.
Both firms, like many banks, have been trying to amass assets in an attempt to offset through bulk volume the very low returns they are receiving from investing clients' noninvested cash.
"Over the last five years, in the midst of difficult market and economic conditions, our client assets are up over 60 percent, as we have gathered more than $170 billion in net new client assets," TD Ameritrade Chief Executive Fred Tomczyk said in a prepared statement.
The firm's average fee-based balances rose 30 percent to $110.8 billion from a year ago as of February 28. The total inched up 3 percent from the end of January 2013.
Average daily trades on which TD Ameritrade collected commissions or other revenue fell to 386,000 in February from about 387,000 in January.
Shares of TD Ameritrade were up about 12 cents at $20.97 in morning trading while those of Schwab were up 7 cents at $17.73.
(Reporting By Jed Horowitz; Editing by Andrea Ricci)