RIA units at Schwab, TD Ameritrade drive assets

The registered investment adviser units at The Charles Schwab Corp. and TD Ameritrade Holding Corp. posted second-quarter gains, even though the firms’ individual-investor businesses remained in the doldrums, with low trading volumes and interest rates.

Schwab last Tuesday reported a 2% gain in second-quarter net revenue to $1.21 billion. Net income fell 3% to $231 million, excluding an extraordinary gain.

TD Ameritrade’s revenue fell 3% to $667.2 million for its fiscal third quarter, which ended in June. Net in-come dropped 2.3% to $153.8 million.

Schwab’s individual-investor business brought in $2.9 billion in net new assets during its second quarter. That was dwarfed by the $9.9 billion in net new assets from the Schwab Advisor Services custody unit.

TD had $9.7 billion in net new assets, compared with $7.9 billion a year earlier.

Some 50% to 60% of new flows were from registered investment advisers, according to Peter Dorsey, head of sales for TD Ameritrade Institutional, the custody unit.

The results show “how important” RIAs have become for TD Ameritrade, he said.

A record 120 breakaway brokers joined during the third quarter, a 48% increase from a year earlier, TD Ameritrade said in a statement.

Mr. Dorsey said that he expects full-year results to pass the 324 breakaway brokers that TD Ameritrade Institutional brought on board in fiscal 2011.

“There has been a crisis of confidence with Wall Street in general” that continues to help drive the breakaway trend, he said.

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Related Topics: Charles Schwab & Co., TD Ameritrade Institutional