TD Ameritrade’s latest results benefited from high trading volumes that offset lower interest rate-related revenue. The brokerage firm’s strong fiscal third-quarter performance also highlights key differences between it and Charles Schwab ahead of their 2020 merger.
Net income for TD Ameritrade was $569 million, up 3% from a year ago vs. $742 million for Schwab, down 21% year over year.
Total assets at TD Ameritrade are about $1.5 trillion, compared with some $4.1 trillion at Schwab.
TD Ameritrade’s advisory assets — 47% of total assets — total roughly $700 billion, while SCHW’s — 46% of total assets — are close to $1.9 trillion.
Net new assets at TD Ameritrade were $32.8 billion in the quarter ending June 30, with $12.8 billion in the RIA channel and $20 billion from retail, or DIY, investors.
Schwab’s net new assets in Q2 were $24.7 billion for the RIA business and $22 billion for DIY investors.
TD Ameritrade “showcased strong asset growth” with an annualized net new asset growth rate of 11% and “client retention remaining strong on the institutional side — boding well for the pending merger with Schwab,” said equity analyst Pauline Bell of CFRA Research, in a recent note.
Commissions, Trading Update
TD Ameritrade’s trading revenue increased 37% from a year earlier to $652 million, while Schwab’s dropped 7% to $183 million.