Reuters: Financial Services and Real Estate: Main Street investors still apathetic-TD Ameritrade

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Main Street investors still apathetic-TD Ameritrade May 9th 2012, 15:03 Wed May 9, 2012 11:03am EDT * TD Ameritrade April daily average trades down 8 pct * Main Street investors on sidelines * But financial advisers are bullish By John McCrank NEW YORK, May 9 (Reuters) - Main Street investors, unlike financial advisers, are still reluctant to invest in the equity markets, pushing down trading levels at discount brokerage TD Ameritrade Holding Corp. "You've still got a lot of apathy in the market," TD Ameritrade Chief Executive Fred Tomczyk said at the UBS Global Financial Services Conference in New York on Wednesday. After dipping 0.75 percent in April, the S&P 500 is down nearly 4 percent so far in May on concerns over Europe's debt crisis. The market is still up 7 percent since the beginning of the year. TD Ameritrade said late on Tuesday that its clients made an average of 368,000 trades a day in April, down 8 percent from a year earlier and down 3 percent from March. The company's trading levels were 10 percent below the expectations of JMP Securities analyst David Trone, who had been looking for an average of 408,000 trades a day. "This was also 1 percent below management's mid-month update of 370,000, implying that activity continued to taper off during the latter part of April," he said in a note to clients. The numbers were more in line with some other analysts' expectations. Richard Repetto, an analyst at Sandler O'Neill said he had been expecting trading volumes to be down 5 percent from March, and David Chiaverini, an analyst at BMO Capital Markets, said he had been expecting a month-over-month decline of 4 percent to 6 percent. MAIN STREET APATHY Omaha-based TD Ameritrade is the No. 1 U.S. discount brokerage in terms of client trading volumes and is seen as a barometer of Main Street investor sentiment. Tomczyk said regular investors "definitely are on the sidelines." The company's institutional clients, made up of independent registered investment advisers (RIAs), however, are actually quite bullish, and have moved their clients into the market, he added. Tomczyk said that client cash as a percentage of client assets in the RIA channel is at a low point for the last five years, indicating strong participation in the equity markets The company had $450.9 billion in total client assets as of April 30, up 7 percent from a year earlier and roughly flat from March. Shares of TD Ameritrade, which gets over 40 percent of its revenue from client trades, were down 2.2 percent at $17.63. Link this Share this Digg this Email Reprints

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