TD Ameritrade executives at the New York Stock Exchange. (Photo: AP)

Charles Schwab (SCHW) said Monday that it garnered $8.5 billion in net new assets in August, while analysts estimate TD Ameritrade (AMTD) had roughly $3 billion of net new asset growth in the same period.

Total client assets totaled $2.45 trillion at Schwab, which reported an 18% year-over-year change and a 3% month-over-month shift. For its part, TD Ameritrade said it had $665.5 billion in total client assets as of Aug. 31, up 24% from August 2013 and up 3% from July 2014.

Schwab generated $8.5 billion of net new assets, representing a 4.3% annualized organic growth rate,” said Sterne Agee analyst Jason Weyeneth, CFA, in a report on Monday. “While a solid result, it marks a slowdown from the prior few months which were in the 6-8% growth range. Total client assets grew to $2.448 trillion, reflecting the net new assets and $57 billion of net market gains.”

Daily Trades

Schwab’s daily average trades (which included non-revenue generating trades) were 460,000 in August 2014, a 1% year-over-year decline, and flat compared with July 2014. Daily average revenue trades (DARTs), though, were down 6% from July, “essentially in line with results reported by peers,” says Weyeneth.

“For the [third] quarter we have modeled a 9% sequential increase in DARTs, which could prove aggressive absent an acceleration in client activity in September,” the analyst explained. “However, we note commission revenue for SCHW represents a much smaller portion of total revenue than at peers.”

TD Ameritrade had an average of 381,000 client trades per day in August, roughly equal to the level of August 2013 and down 6% from July 2014.

“Our [TD Ameritrade] model embeds a DART estimate of 405,000 for the September quarter, implying a 429,000 September result, which could prove aggressive (although we do expect a seasonal uptick),” he adds. According to Weyeneth, Schwab continues “to grow the platform with 75,000 net new brokerage accounts in August (81,000 average over the past 12 months).” This brings the total number of brokerage accounts to nearly 9.3 million.

Schwab’s August metrics pointed to a similar-to-peers slowdown in trading activity along with solid franchise growth (net new assets, brokerage accounts).

In early September, Zacks Investment Research issued a bullish report on the company, noting that it “continues to grow in its trading business, driven by a steady improvement in equity markets.”

Zacks also says management’s “aggressive efforts to increase its client base in advisory solutions are bearing fruit.” Advisory solution fees had a three-year compound annual growth rate of 17.3% (2011-2013), “with the trend continuing in the first half of 2014 as well.”

On the flip side, though, analysts with Zacks point to elevated operating expenses as “a major concern.” These higher costs are tied to rising compliance and compensation spending.

“At the same time, low rates have been a drag on the top line, forcing Schwab to waive its fund management fees,” the group said.

More TD Ameritrade News

TD Ameritrade says its average spread-based balances were $93.6 billion in August, up 6% from August 2013 and up 2% from July 2014. Average fee-based balances totaled $143.5 billion, up 17% from August 2013 and roughly flat from July 2014.

The uptick in total average spread balances marked TD Ameritrade’s “first meaningful growth in several months,” Weyeneth says. The increase came largely from growth of insured deposit account balances swept into TD Bank, which grew $1.4 billion to $74.1 billion.

“Some of the growth could reflect shifts in asset allocation as cash allocations have generally been towards the lower end of the historical range,” the analyst said.

The quarter-to-date balances, he adds, are running slightly higher than assumptions embedded in Sterne Agee’s model. TD Ameritrade’s August metrics “indicate a further decline in client trading activity (although in line with expectations),” according to Weyeneth. “However, growth in spread-based balances picked up during the month, and net new asset growth appeared solid given a seasonally slower month.”

On Monday, TD Ameritrade Institutional said it had recently expanded and redesigned its online education center for independent fee-based registered investment advisors.

The site gives its 4,500-plus RIAs access to 1,200 e-learning courses from Skillsoft and 140 continuing education courses so advisors can maintain their certified financial planner designations in partnership with the College for Financial Planning.

“This powerful combination of content, technology and different learning experiences makes our new Education Center among the most robust offerings in the industry,” said Jim Dario, managing director, TD Ameritrade Institutional Product Management and Strategy, in a press release. “TD Ameritrade provides advisors the resources to help improve the performance of their employees and, over time, bolster their efforts to increase the value of their firms.”

Check out TD Ameritrade Fee Rebates: A Win or a Loss for Investors, Advisors? on ThinkAdvisor.