TD Waterhouse Institutional’s advisor assets increased 35% in 2004, to $35 billion, and are forecast to grow by 31% in 2005, President J. Thomas Bradley Jr. told the firm’s annual Partnership conference in San Diego. By 2007, Waterhouse expects assets to nearly double, to between $66 billion and $70 billion, he said. Based on figures disclosed by Bradley and confirmed by Tim Pinnington, CEO of TD Waterhouse USA, the advisor unit produced about $90 million to $100 million in revenue in 2004 and is expected to produce between $120 million and $130 million this year.

Bradley released the statistics on February 3 to a packed house at the Waterhouse conference. The firm reported that a record 800 advisors attended the show.

In explaining why his firm’s parent, Canada’s Toronto-Dominion Bank, continues to invest in the U.S. advisor business, Bradley noted that it costs the firm 15 to 20 basis points to acquire advisor assets, a tenth of what it spends to sign up retail clients directly. He added that while TD Waterhouse’s retail branches reap 50 basis points annually from their customers, about double what it earns on advisors’ clients, it takes three to four years for a retail account to reach profitability. Advisor accounts, by contrast, yield a profit within a year.

Asked whether TD Bank was still interested in partnering with another U.S. brokerage firm following the collapse of merger talks last year between TD Waterhouse and E*Trade, Pinnington said that the economics of the industry “are compelling for merging smaller companies with bigger companies.” However, he declined to say whether TD Waterhouse is discussing any mergers currently. He also said that TD’s recent purchase of a stake in Banknorth, a New England retail lender, does not signal lessened interest in the discount brokerage area. “The bank is interested in building retail” in the U.S., he said, noting that TD’s growth prospects in its home market north of the border remain limited. TD Waterhouse Institutional now accounts for 24% of the brokerage firm’s $145 billion in assets, Bradley said.