TD Ameritrade FY 2Q17 Earnings Call Notes

Tim Hockey – President and Chief Executive Officer

Investor engagement has been resilient

“Investor engagement has been resilient. High trading volumes despite ongoing volatility. We’re seeing very, very healthy trends and new funded account growth, and asset inflows from both new and existing accounts. Asset gathering itself is a quarterly record, and we’ve already met our previous fiscal year record for net new assets with nearly a quarter yet to go. ”

Close to receiving final approvals for Scottrade acquisition

“We believe we are close to receiving final regulatory approvals for the Scottrade acquisition and we hope to make everything official in the coming weeks.”

We are seeing very broad based engagement in the market

“Yes, so we have seen you know both this quarter was sort of the perfect storm in terms of those numbers right, so we saw our clients with net buying activities, so cash was down linked quarter and then we saw very strong returns in the markets, so the denominator was up, so I think that’s why you are seeing that percentage decline so significantly. We are seeing this quarter very broad-based engagement in the market, so everyone from brand-new customers opening their first account to very active traders seem to be engaged in the market. We saw a good activity across pretty much all of our products, futures were down a little bit year-over-year, because we had such a strong comparable. In terms of holdings, we are still seeing the trend where the ETF’s are increasing a bit as a percentage of assets. We continue to see good holdings in mutual funds and really across all of the products that we typically see.”

Broader retail engagement but multi decade los in the VIX

“Yes, so it’s actually a bit of a conundrum, on the one hand we’ve got broader retail engagement, generally as we say, if you look our June quarter after June quarter after June quarter, the engagement rates of our clients are up, their trading levels annualized are up, as we said their activity rate. And part of that is the shift to mobile, we know we get a lift in trading when a client becomes mobile active, again easier for them to do that business. So on the other end, the conundrum part is, as we said, we’re at multi-decade lows in the VIX, which tends to drive more trading activity. So, if you do get a bump in VIX, then with that broader based trading it will be interesting to see whether you get a real spike or not, but it’s sort of a steady drumbeat of higher growth rate in clients with slightly more trading levels even – even over and above the fact that we have volatility that’s quite low.”