TD Ameritrade FY 2Q16 Earnings Call Notes

TD Ameritrade’s (AMTD) CEO Fred Tomczyk on Q2 2016

Did see slower growth from existing RIAs

“The institutional channel delivered solid results this quarter but saw a slower growth from existing RIAs, as a result of the market conditions during the quarter. That said, our new RIA sales pipeline is quite strong. And coming out of our National LINC Conference in February, we won more opportunities than we ever have before. We do not see the trend towards the RIA model slowing down and advisors remain optimistic about their outlook for the future as well.”

This is the kind of environment that drives increased activity

“As we’ve said before, this is the kind of environment that drives increased client trading activity. April trades to date are currently averaging 454,000 per day. Those who are trading remain quite active. ”

DOL rules still need more analysis

“the details around the application of the fiduciary standard and its associated obligations still need to be more fully analyzed and understood. IRA rollovers and education are two areas that we’re focused on and we’re investigating the best ways for us to sell to and to service IRA clients in light of the new rule.”

call center people are all series 7 licensed

” all of our call center people that interact with clients are licensed. So that is — we made that change probably seven or eight years ago and have stuck to that. In fact when you start in our call centers today, you have six months to get license. So, they all have Series 7 license, that’s the first point. ”

The heart of the DOL thing is around compensation for conflicts of interest

” in the DOL the sort of a bias against conflicts of interest, particularly with respect to how you compensate your people. So, anybody that’s got differential compensation or advantageous compensation, the presentation of proprietary products versus non-proprietary products, I think that’s an adjustment they’re going to have to make but we don’t have to make that adjustment. ”

Building a lot of robo sort of capabilities

“Well, we continue to believe that Amerivest is core of our money management strategy. When you think about what we’re building out, we’re building out an enhanced experience including goal setting and goal planning, performance tracking against that goal, embedding education, portfolio allocation systems, account linking and live person and chats. So, we’re building on a lot of functionality inside Amerivest. And so that will be the core engine. We continue to believe that for the broadest part of the market, it’s the combination of the technology and with some human help that is the right model.”