Ameritrade CEO Joe Moglia described his dissatisfaction with Ameritrade's account and asset growth on his Q1 (FQ2) earnings conference call. Schwab (ticker: SCH) and Fidelity both cut fees and gained market share during the past quarter - Schwab retook the position of largest broker by trades. They, together with E*Trade (ticker: ET), are now aggressively courting long-term investors with substantial assets, rather than just frequent traders. Mr Moglia's comments are a "must-read" for any investor or manager in the online brokerage space:
… nobody at Ameritrade likes the trend that we've been seeing as of late. If you look at trades per day… last calendar year, we were number one in the industry… today, we're number two. We don't like that. We want to get back to number one. …when you look at our account transfers and our asset transfers… those ratios have certainly come in from where they were a year ago. We don't like that. …our retention has just dropped a touch below 94%. We want that number to be above 95%… client assets, they were down 5.4% from last quarter… qualified account numbers, they were down 2% from last quarter.
Now it is easy… to attribute all of that to the market… But a critical initiative for us as part of our client segmentation strategy going forward is to get involved with the long-term investor space. If we're going to be successful in long-term investor space and we recognize this is not going to happen overnight, we've got to do a great job of accumulating assets.
So I want you to know that that's important to us... We need to get our assets up, period.
(Quotes are from the CCBN StreetEvents transcript.)