Mentioned In This Article

The number of breakaway brokers joining TD Ameritrade in its fiscal second quarter continued at the double-digit pace set in 2011, the company said today. The custodian and discount broker said 104 breakaways formed registered investment advisors and signed up with TDA during the three months ending March 31, a 10 percent increase year over year. For its fiscal year to date, 204 advisors have joined the firm.

“Investors want more objective advice, investment choices, and transparent, fair fee structures. As a result, the independent RIA model continues to gain traction with both advisors and retail investors,” Fred Tomczyk, president and chief executive officer of TD Ameritrade Holding Corp., told analysts on a conference call this morning.

More than 4,500 advisors were on TDA’s platform last year, and the number of breakaways who joined rose 20 percent in 2011, the company said. Most who joined last quarter came from independent broker/dealers, followed by defectors from other custodians and from wirehouses, Tom Nally, the new head of TD Ameritrade Institutional, told Registered Rep. The breakaways who signed up last quarter averaged $100 million in assets under management before they made their move, the company said.

For the second quarter, net new assets reached $10.8 billion, an annualized growth rate of 11 percent, TDA said. The company doesn’t break out advisor assets from retail assets but Tomczyk said the advisor share has ranged from 50 to 60 percent of the total in the past. Total assets at TDA last quarter reached a record $452 billion; Tomczyk said the RIA share of those assets ranges from 35 to 40 percent.

TD Ameritrade still trails Charles Schwab in the pursuit of RIA assets. Schwab’s RIA unit, Schwab Advisor Services, drew $12.6 billion in net new assets last quarter, the company said Monday.

Tomczyk said investors are still a jittery lot despite the recent run-up in stock prices. Many were bullish a year ago, only to see market volatility erupt in the summer that followed.

“A year later, in the aftermath of such widespread economic uncertainty, and despite the strong market in the March quarter, today’s investor is much more cautious, with many remaining on the sidelines waiting to see if the economy and the markets are for real this time,” he told analysts.

Average client trades of 387,600 last quarter were off nearly 12 percent year over year. Tomczyk said most retail investors who were polled recently by TDA said they believed that now is a good time to invest, but nearly a quarter said their tolerance for risk has dropped in the past six months.

TD Ameritrade Holding reported net income of $137 million on net revenues of $673 million last quarter, compared to net income of $152 million on net revenues of $653 million a year earlier.