Good day everyone and welcome to the TD Ameritrade Holding Corporation's December Quarter Earnings Results Conference Call. This call is being recorded. With us today from the company is President and Chief Executive Officer, Fred Tomczyk and Chief Financial Officer, Bill Gerber. At this time, I would like to turn the call over to Bill Murray, Managing Director of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and once again welcome to our December quarter earnings call. Our press release and December quarter earnings presentations were released earlier this morning and can be found on amtd.com. The earnings presentation includes our Safe Harbor statement and reconciliation of certain non-GAAP financial measures to the most comparable GAAP financial measures. Descriptions of risk factors are included in our most recent financial reports, Forms 10-Q and 10-K. This call is intended for investors and analysts and may not be reproduced in the media in whole or in part without prior consent of TD Ameritrade. As is our normal custom, please limit your questions to two so that we can cover as many of your questions as possible. With that, let me turn the call over to Fred.

Thanks, Bill and good morning and welcome everyone. Well, we're off to a great start to fiscal 2015. We delivered record net new assets of nearly 19 billion and record net revenues of 819 million up 9% year-over-year. From trading to asset gathering to investment product fees, we delivered strong performance in nearly every aspect of our business. Now let's take a look at some of the quarter's key highlights on Slide 3. We entered the quarter with our average client trades per day of 457,000 and activity rate of 7.2%, the second best quarter for trading in company history. Net new client assets were at a record $18.8 billion and 11% annualized growth rate and up 30% year-over-year. Client assets ended the quarter at a record 672 billion, up 13% from last year. Our average fee based investment balances were also a record at 151 billion up 16% year-over-year. Interest sensitive assets topped a record 101 billion up 4% year-over-year and we earned net revenues of 819 million our best quarter ever up 9% over last year. This resulted in our delivering $0.39 in diluted earnings per share, up 11% year-over-year. Now let's take a closer look at how we delivered these results starting with asset gathering on Slide 4. This quarter was the best asset gathering quarter in company's history. We brought in nearly 19 billion net new client assets and 11% annualized growth rate and up 30% year-over-year. Our asset gathering results was strong in both the retail and institutional channels with each channel growing at around 30% year-over-year. As we typically do this quarter, we ramped up our retail advertising efforts which we believe are positively impacting results. New television and digital ads with unique offer seem to be paying off. We are seeing growth in new accounts and the quality of our new accounts which combined with very good retention rates is delivering strong net new retail assets. Using client data and analytics, our investment consultants are better able to identify opportunities to reach out the clients whether it's a life event or other trigger which is channeling good opportunities to our front line associates. And a focus on raising productivity in our branch lead referral program has reduced the time and effort to convert leads to new business. Turning to institutional, the move towards the independent channel shows no sign of slowing or abating. In the last five years, asset growth for RIAs has outpaced wirehouses by more than two to one. The institutional start of our business remains a strong contributor to our quarterly net new client asset growth, and our sales pipeline remains at healthy levels. We're looking forward to a record number of current and perspective RIAs attending our National Advisor Conference in San Diego next week. Registration is up 42% from last year making this one of the largest gathering of RIAs in the industry. To attract and support RIAs, the institutional channel is focused on delivering superior client service and improved technology integration between advisors and ourselves. We recently received third party validation that our advisor technology strategy is delivering results for RIAs and winning their loyalty. Vail topped financial planning magazines advisor satisfaction survey for a third straight year and our iRebal technology was named the number one rebalancing solution for advisors. With leading technology and a focus on sales and service, we are in a great position to continue to take advantage of the long term growth trend in the RIA market. Now let's move on to trading on Slide 5. Strong trading was driven by intraday volatility in the December quarter. During the quarter, we saw 29 days where the S&P 500 moved greater than 1% and 8 days where volatility was greater than 2%. Global growth concerns, geopolitical events, and big moves in energy prices in the yield curve where the key drivers in increase market volatility, which in turn drove increase trading activity. As a result, our activity rate came in at the high end of our guidance range at 7.2% with an average 457,000 trades per day for the quarter, our best December quarter and second best trading quarter in our history. January month to-date DARTs are at 487,000, a strong start to our March quarter as the volatility in the market continues. RIAs are also engaged in taking advantage of opportunities in the market for their clients. Increased utilization of our option strategy desk, and think pipes technology platform, as well as the increased adoption of our iRebal rebalancing technology led to a 32% increase year-over-year in DARTs on the institutional side of the business. Derivatives accounted for 41% of our trades per day and continue to be a growing part of our clients trading activity. Our options accounted for 31% of total trades. Typically we see futures in the range of 6% to 7% and this quarter future's trading rose to a record 9% of total DARTs at 41,000 trades per day, up 54% year-over-year as investors look to capitalize on the movement in oil and gas prices. Foreign exchange was 1% of DARTs for the quarter. Now with the recent ForEx and currency headlines, I want to remind you of our strategy with respect to ForEx trading. Our focus is on the retail client and from a strategic point of view, ForEx is more of an accommodation product for us. At less than 1% of our trades per day, we have minimal exposure to volatility and ForEx. Mobile continues to show strong momentum, accounting for 62,000 trades per day, a record 14% of daily trades up 28% year-over-year. And investing and trading using mobile devices continues to grow. Daily mobile logins averaged nearly 200,000 and up 32% from last year. And we see continued growth in the adoption of our mobile platforms as we brought in 2000 new mobile users each and every day, which was consistent with the previous quarter. Now let's turn to investment product fees on Slide 6. Investment product balances are at record levels. Strong sales and a strong market drove average balances up 16% over the last year to 151 billion. Revenue was up 15% year-over-year and at 10% of our total net revenue, this remains an important focus for our longer term growth strategy. Net flows into Amerivest and AdvisorDirect continue to be strong. In fact balances for Amerivest and AdvisorDirect were up 22% and 28% year-over-year reaching 10 billion and 29 billion respectively. Guidance products are resonating with our clients and we continue to focus on building this revenue stream. Now let's turn to Slide 7. We've had a strong start to the year and our story remains on a very good execution of our strategy across both of our business channels. We marked the best asset gathering quarter as both retail and institutional channels saw our net new clients assets increase around 30% year-over-year. And while typically a slower trading period, investors were highly engaged in the market as volatility spiked and the S&P 500 hit record highs in the December quarter. We expect this volatility to sustain as the VIX is now hovering around 20, nearly double the six month average of 12 to 13. We continued to see an increase appetite for guidance and advice solutions amongst our retail clients, and this increasing engagement help to drive strong net flows into Amerivest and Advisor Direct and record investment product fee balances. Interest sensitive assets topped $100 billion this quarter. How we've also seen volatility uncertainty around interest rates in the yield curve, something we can't control. However, we feel good about the course run, and we'll continue to manage our asset liability management strategy as we have keeping duration around 2.2 to 2.4 years and positioning ourselves from when rates rise while continuing to increase and build our earnings power. In total, we returned over 90% of our net income to our shareholders in the form of cash, dividends, and share repurchases this quarter. In closing, I couldn't be more pleased about our start to 2015. We had a strong quarter and January is off to a good start as well. Virtually every magic trick we measure and manage is trending in the right direction. We have a strong balance sheet and a disciplined approach to asset liability management that serves us well as we deal with the volatile market and a volatile yield curve. As always, we will remain focused on building a long-term value for our clients, our shareholders and our associates. And with that, I will turn the call over to Bill.

Thank you Fred, and good morning everyone. We are off to a good start to our fiscal year driven by a combination of strong asset-based revenue and robust trading volumes. Organic growth continues to be the primary focus of ours and we were once again able to do deliver double-digit net new asset growth. At $18.8 billion, this was the best quarter in the company's history and the 30% increase year-over-year. In all, this was a good quarter and we have a lot to be proud of. With that, let's begin with the financial overview on Slide 8. We will start with the December-to-December comparisons on the left side of the page. On line one, transaction-based revenue is up $31 million or 9% driven by 43,000 more trades per day. The commission rate was down slightly from the prior quarter to $12.45 per trade, primarily driven by the mix of derivatives trading as futures, which is a lower revenue per trade product was a record 9% of DARTs. Futures DARTs were up 54% year-over-year driven primarily by crude oil and the E-MINI S&P 500 index. On line two, asset-based revenue is up $44 million or 11% due to the growth in margin balances, fee-based investment balances and continued momentum in our stock lending business. As a result, revenue was up $67 million or 9% to a record $819 million. On line five, operating expenses excluding advertising are up $29 million or 8%, primarily due to increased headcount and expenses related to the increased trading volumes. On line 11, other expenses were up $4 million, principally related to the debt refinancing mentioned last quarter and the associated timing as we carried an additional $500 million of debt for 40 days during the quarter. In early November, we did swap the fixed terms of the new 10 year $500 million tranche issued at [3, 5, 8%] [ph] to a floating rate at 110 basis points over three months LIBOR, which translates to an approximate 1.35% effective rate currently. All in, we expect interest and borrowings to average approximately $8 million per quarter for the rest of the year. Pretext margins on line 13 reached 41%, which was slightly higher than last year's December quarter. The net result was net income of $211 million and earnings per share of $0.39 or $0.41 when excluding the impact of our intangible amortization. On line 17, EBITDA was a strong $389 million or 47% of revenue. Moving to the sequential quarter comparisons on the right side of the page, revenue was up $24 million or 3%, which was almost entirely related to the lift and trading revenue, as we experienced our second best trading quarter in the company's history. Commission rates declined $0.52 per trade, primarily due to order routing revenue and mix, as futures DARTs were 29%, primarily driven by the two items mentioned earlier. On line 5, operating expenses excluding advertising were slightly down to 411 million from 412 million last quarter as slight increases in employment were offset by lower consulting and other expenses. On line 7, the total operating expenses are up $18 million due to an increase in plant advertising cost as the December quarter tends to be seasonally higher. The net result was earnings per share up $0.01 or 3% sequentially. Now let's turn to spread-based revenue on Slide 9. On the year-over-year basis, this quarter we finished at a record $368 million in revenue, up $33 million or 10% from last year. Balances averaged a record $94 billion in the quarter, up $4 billion or 4% from last year. We also saw a net interest margin increase by eight basis points to 1.53% driven largely by record margin balances and our net stock lending growth. On a sequential basis, revenue came in essentially flat, as both balance growth and rates leveled off from the prior quarter. Of note, the two basis point NIM compression was due to the clients in the IDA yield, which we will now discuss on Slide 10. On the year-over-year basis, balances reached a record $75 billion; however, yields experienced a slight compression, as a result, revenue was relatively flat $207 million. Sequentially, revenue came in flat; however, yields fell as floating rate balances were up and long-term rates were down. Our clients remained net buyers in the market. Net buying in the quarter was $13.1 billion versus $9.2 billion in the same quarter last year and $6.9 billion in the September quarter. We continue to closely monitor the yield curve and make prudent extension decisions. The appendix, we have included a trend chart of the yield curve. As you will see, the two year versus seven year spread is down 85 basis points year-over-year and down 34 points sequentially. Despite the volatility in the yield curve, we remained committed to our extension strategy. Let's now turn to the next slide and discuss interest rate sensitive assets. Interest rate sensitive balances were up $4 billion or 4% from last year due to organic growth. We are now at a record $101 billion of interest rate sensitive assets. IDA balances continue to be the biggest driver to the increase as ending balances came in at approximately $76 billion, which is up 3% from last year. Within the IDA, floating balances for the quarter ended at approximately 19.4 billion versus 18.4 billion at last quarter end. Client cash balances ended the quarter at 14.4% as our clients remained invested in the markets. Given that the mix of our client assets are now essentially 50-50 between the retail and institutional, the expected firm-wide cash percentage range needs to be reset based on the relative historic portions of cash. Based on the current mix, we would now expect firm-wide cash levels to be at 13% to 18% of total client assets, as retail clients typically carry 19% to 24% in cash and institutional clients typically carry 7% to 12% in cash. Overall, our consolidated duration remains at 2.2 years flat from last quarter end. To reiterate, we have remained very well positioned for rising rates. Now let's turn to the final slide. We are off to a good start to the fiscal year. We have had number of financial records. Asset gathering remains strong at $18.8 billion, the best quarter in our history. The retail investor is engaged and we are seeing very strong trading volume so far in fiscal 2015. Flows into Amerivest and AdvisorDirect are fueling investment product fees and balance growth. We continue to deploy capital to our shareholders through our quarterly cash dividend of $0.15 per share or $82 million and we also repurchased 3.7 million shares of company's stock for $118 million. Again we are very proud of this first quarter as I see metrics are pointing in the right direction. Our strategy is paying off and we will focus on maintaining our momentum as we move forward. With that I'll turn the call back over to Fred.

Thanks Bill. Before we get into the question answer period, there are few other things I would just like to say. I think as you all saw the announcement last week that after 16 years with the company and nine as Executive Vice President and Chief Financial Officer, Bill Gerber be retiring at the end of the fiscal 2015. Now Bill's impact over the last 16 years is evident in every facet of our business. From day one, Bill has been dedicated to the growth of the firm both organically and through acquisitions. He's been a calm and thoughtful partner to me. Providing sound finance fiscal management through the financial crisis in 2008 and that advising counsel continues today given the environment we find ourselves in. He's helped to create and maintain a strong balance sheet and has helped us become one of the best run investment firms in the country. During his tenure we've amassed more than $650 billion in client assets and moved from a non-investment grade credit to a single A credit rating. Bill will continue as our Company CFO until the end of the fiscal year. So he remains a valued member of our senior operating committee and the integral part of our organization. We are grateful for all that he has done and for his continued efforts which will provide continuity and stability through the transition. Beyond all of that, Bill is more than just a good CFO. Despite being a Michigan guy, he’s a friend, a great person and he's a great family man. And he's made a clear impact on TD Ameritrade and all of us and he’ll leave a great legacy. With that, we'll take all your questions.

[Operator Instructions] And the first question comes from Rich Repetto with Sandler O'Neill.

First I'd like to congratulate Bill. Its been a wonderful run so first question, and first congratulations on the record net new assets and record balances but as long as Bill is on his way out we might as well hit him with a question or two here, so the one metric we said most metrics are going positive but the IDA at 108 basis points was below guidance, below the 110-115 so I'm just this may heal itself with short-term rates if they ever do get changed but what's the outlook say next quarter and what's the outlook further in the year, I don't know whether you can assume rates don't get raised or how are you looking at it given that the guidance range is 110 to 115?

I think as a rate, I think you're right, Rich. Certainly it's going to be at the low end of the range and we'll have to see how the rate actually plays out further in the year. The revenue, however because of the growth that we're experiencing is we feel very strong about and so from a revenue side, I think everything is going to be fine but from a rate perspective again we'll see how this plays out.

Keep in mind with the asset gathering that strong we got caught with a little bit more in floating than we thought we should have had and we also paused for a bit during the quarter, so our float was a little bit higher. That's probably the primary reason that it's down a bit, but it's very hard to call rates at this point. The reality is in the last month to two months for seven year swap rates following 50 basis points so it is very volatile as you can see day-to-day, so it's pretty hard to call but the real difference is going to be whether Fed funds moves in June or not and your guess is as good as mine on that one.

Okay, that's helpful, thanks, and I guess my one follow-up question would be to Fred, we'll get away from Bill here a bit, but the question would be TD Bank has a new CEO and with Ed Clark retiring and I believe he's on the new CEO is on your Board as well, and I was just trying to get, any perspectives on what they're thinking about first of all TD Ameritrade and then potential acquisitions in this space? Because I know at least I thought that TD had some influence in the past on those areas.

Well first off, Rich, I probably shouldn't answer their view on Ameritrade for them but I will tell you that based on all my discussions with them, I think to use their term, they're here for the long time. They like the space, they've been in the space and started in this space in Canada years ago and in the U.S. years ago and they remain very bullish on it and have a long term view so that's the first point. With respect to M&A, the reality is I don't, they don't come in and talk to us about where you should do this or do that. The reality is the M&A is decided by the Management team and the Board of TD Ameritrade but the reality is that at the end of the day almost any transaction inside our space that you do because of their 40% ownership, they need to agree with and the Federal Reserve has to approve, that's just the way the laws of the land work and that's the way things are structured. But they've always been supported to anything that really makes good economic sense but right now, I can tell you right now, the Management teams heads down on driving our organic growth strategy.

Okay, thanks guys and go Patriots.

The next question comes from Bill Katz with Citi.

Hi good morning, everyone. Thank you very much for taking my questions and Bill, congratulations as well. Just in terms of the spend outlook since you're getting is such robust growth off of the add spend wonder if you could sort of update your thoughts on the outlook for fiscal '15 now given those returns?

In terms of the add spend itself?

Just wondering your add spend was up as expected in the quarter but since you had such good return on that investment given the earnings growth rate just curious if you're looking to sustain that level or sort of fall back into a normal seasonal pattern from here.

I think at this point we would fall back into a more seasonal pattern but it is very market sensitive and we have certain market environments where we will step on the gas and spend more in certain market environments where we will pull back, so it is a little bit of feel your way through but in the absence of any unusual events that we see, we would basically stay on our current course and spend the seasonal pattern we have in the past. But I'd tell you right now, we are probably spending more just because of the environment as a good environment from our perspective.

And it is front end loaded, Bill. Certainly between the December quarter and the March quarter, that's more than 50% of the spend.

Right, understood and then just stepping back obviously you brought back a ton of stock this past quarter. You had some comments about FX as more of a combination but just given some of the significant clients that's happened in the FX world these days with FXCM and some non-US players, any strategic thoughts of increasing your FX exposure through picking up something on the cheap or is it more of a combination and continue to buyback stock and grow organically?

In the past, we've thought about ForEx as a potential area to move into and we decided against it. There's a lot of - from our perspective regulatory headwind in that space. It's really not a strong product in the U.S. It's much more popular in Europe and Asia. We're really primarily U.S. focused firm and so it really doesn't, it just doesn't fit with where our strategy is where our distribution and marketing reach is and we see there's a product with a lot of regulatory headwind. So it will continue to be just an accommodation product and we're really not interested acquisitions in this space.

Okay, thanks for taking my questions guys.

The next question comes from Joel Jeffrey with KBW.

Good morning guys. Just to go back to the net new asset growth. I know it's at the high end of your range. I'm just wondering do you guys think that the 11% growth rate is sustainable? As I said I know it's within the range but what needs to happen to sort of stay at these levels?

You sound like my Board. Every year I tell them that we're going to be 7% to 11% and they say you're at 10% to 12% every year and I say yes but this year is going to be harder and we put up those kind of numbers this quarter, so it's a nice problem to have. But I think if the environment is right we could keep up a very healthy pace. Everything I'm seeing in the trends again into January are good. The retail space has just got really good retention and we're getting the new marketing seems to be working quite well. It's much more scientific now which was part of our goal. It's very much multi-media oriented and we're getting good feedback on the adds, whether it's on TV or whether its in printer, whether its online. So we'll continue to push on that and I can tell you Tom Bradley is very focused. And on the RIA side, the RIA conference, I think it's the first time ever we've had to cutoff attendance, we've got a waiting list because we just - the hotels and everything can't accommodate it. So I'd say we have a good shot at it, depending on environment here and I'll expect us to be at the upper end of the range, whether it be 11% I don’t know. But rest assured the management team was very focused on double digit organic growth again.

Okay. And then just lastly for me, with the market being what it is so far in January, just wondering if you guys are continuing to see the trends in the types of volumes you're getting from the customers. Our futures volumes remaining elevated and again it's something in this market you'd expect to see to continue to grow or was it more of a sort of one-time blip just due to the market conditions?

It's still pretty much the same mix. Price of oil has been bouncing around a bit here so people are interested trading it. I think it's more of the same so far.

Great. Thanks for taking my questions.

The next question comes from Dan Fannon with Jefferies.

Thanks, just thinking about the buyback and the last couple quarters have been more elevated do you think this - I guess would you characterize that as more of kind of a normal level based on where we sit today?

That's hard to say. What we do is every quarter we decide if we want to buyback this quarter or not and almost always we put in today an algorithm. The algorithm will buy different quantities at different prices and it will kick out what it will kick out and we always tell you the answer in hindsight so Bill and I have already discussed the algorithm for this quarter. We'll put it in probably by the end of the week and then we'll see how we do but given where the stock is right now and things like that we would continue to be purchasers over our shares.

Great. And then just following up on the institutional business, you talked about the conference and the record numbers heading into that. Is there a way to think about the backlog versus other periods? Are you kind of at record levels in terms of business that you expect to come on in the coming months or any way to think about the numbers around that?

Well probably the number wouldn't be at a record level but it's healthy on the number of breakaway brokers. What's changing is we're getting more interest from bigger RIAs so the average size RIA we're bringing in is definitely trending up which is helping to drive the numbers. And that really is the strategy of the option strategy does, the think pipes technology, the iRebal technology is all appealing to the bigger RIAs right now and we're getting very good feedback on it and a lot of interest.

Great, thank you.

The next question comes from Christian Bolu of Credit Suisse.

Good morning, thanks for taking my questions. Bill, a bit of thoughts on cash percentages but factor in any institutional contribution to your cash balance analysis, have you updated your assumptions around deposit pricing for the first hundred basis points rate wise?

You know, we haven't changed that, Christian, so the amounts we have on the page we're going to leave static for the year and we will update it again next year. So we haven't really changed our thinking about what the pricing would be when rates do start moving.

So you still expect, you keep 100% of any rising rates for the first hundred basis points?

Certainly it's going to be obviously subject to competitive pressures et cetera and certain as you know, we tier the amount of rate that we give to people based upon the amount of cash they have in their accounts, et cetera. So there will be some movement but I think in general, the vast majority of the first 100 I would say would be kept.

Okay thanks and then my follow-up question. You have very, very strong flows for you on some of your pairs this quarter. Curious, is there anything going on in the broader environment that's driving such strong results? I ask because I think at least two of your pairs have reported record net new assets for this quarter.

I think this environment works and retail investors right now are generally bullish. You've got volatility and whenever there's this kind of volatility and noise in the market whether it's people having financial troubles or big events, people are much more in tune to their investing and their trading. And when you do that in our experience we tend to do well. When it's a dead and bearish market, it's harder but in this type of market we have bullishness with some volatility and choppiness those tend to be good markets for us.

Okay, thank you on producing a very strong quarter.

The next question comes from Michael Carrier of Banc of America Merrill Lynch.

Bill, just one question on the fee-based revenues. It looks like they were kind of static but the balance has increased. I think there was a footnote somewhere there was some balances that shifted into that bucket for the quarter so just wanted to understand kind of what was going on and then the outlook there. Is there any fee pressure or should we expect kind of a continuation of the theme meaning as balances grow the revenue should follow?

That's exactly right, Mike. As balances grow the revenues should go up. We are expecting continued growth in that. We have a very bullish outlook on that particular part of our business and we'll continue to hopefully drive it as a bigger percentage of our overall revenue stream.

Okay, got it. And then two other small items. Just other revenues seemed a bit light and tax rate seemed a little lower than in the range so just wanted to see, one was there anything in the quarter that causing any of those volatility in those two line items and then just outlook any change?

The other revenue was really education related as we have changed the education model and that has a tail to it. So that's really probably one of the leading areas causing it to go down and also things like companies do reorganizes and things of that nature we get things related to that those are very episodic and we just didn't have as many this quarter as we had in some prior quarters. So I'd say those are probably two of the bigger areas there. On the tax rate, we had several states this quarter that this time of year is historically when you obviously have statute of limitations run out in certain states and so some of those things happen and also when you settle with the State throughout the year and the impact of the settlement on what it means to our in certain tax positions, those revert back to hitting the lowering the tax rate as well. So I would say we should probably still keep the normal tax rate in mind but we are going to have those items that will hit a recorder and certainly we'll keep you updated on that.

Okay, thanks a lot.

The next question comes from Steven Chubak with Nomura.

Hi good morning. So first question I have is on the securities borrow. The yield continues to trend higher. I believe currently it stands at a pretty impressive 22% plus and I was hoping you could speak to some of the factors that are driving strength in that area and whether there are any particular sector such as energy where there might be increasing interest to short some of those names and how it informs your outlook for that fee stream?

This is probably the singular hardest piece of our business to forecast because it is directly related to shorts. And so this last quarter, there were some, we had some big names. I don't think oil actually that had kind of happened so fast I don't think there was a heck of a lot of particular input from the oil patch itself. But you had some names that were big shorts and that gets great revenue for us so very tough to call, sorry I can't really give you a lot of clarity on that one but we are expecting good things from it. We think that it will be better than last year but the size of how much more is very tough.

Understood. Well I appreciate the effort, and then just one on the updated guidance or the revised range for a cash level as a percentage of assets. I suppose thinking about the secular dynamics where institutional channel appears to be growing at a more robust pace, logically it would suggest that it would be reasonable to expect that metric to actually settle somewhere closer to the lower end of that range. And I didn't know if that was a reasonable expectation given that we have seen it on that steady downward trajectory.

Yes, I think you're right and as I said in the prepared remarks and you're correct about institutional growing faster than retail, as that happens we will have to continue to look at this and update it and when institutional as a whole group pulled 7% to 12% in cash, as that becomes obviously bigger and bigger piece of the total, we'll have to continue to look at this and adjust it accordingly. So I think the 13 to 18 is certainly going to stay for a few years but if the growth continues in the same relative pattern that it has, we will continue to move that number south.

So the single biggest thing that will move it inside a year is really the market itself. It's all about the denominator, not the numerator. The numerator has been stable to growing but and we've had a long bullish market here. So but if you had a correction, those percentages are going to change. I don't mean the 13 to 18 but where we are in that range will change.

Understood and then just one more for me on the Capital Management side. I did appreciate some of the color you'd given earlier. I suppose one question I've been hearing was the general surprise that there wasn't a special dividend that was paid. I didn't know how we should be thinking about your Capital Management priorities going forward. I know it's something you've updated us on in the past and didn't know whether your thoughts had changed at all?

We've always said we had five uses for returning capital or deploying capital. And our first priority is for investment in the business whether that's organically or through acquisition. Then we would move and basically say we have debt pretty much where we want it. We could probably tolerate some more but right now it's where we want it so we don't see using our capital to pay down debt. We would be indifferent at this point between a recurring dividend and share repurchases and we would be the last purpose would be special dividends and we didn't do one last year. We had determined we're going to do more share repurchases and we are going to increase our dividend. We're also aware that the clearing organizations are looking for more cash and liquidity and so we decided last year not to do a special dividend and preserve some cash for whatever that event happens.

Okay so is there a target level of cash that we should be thinking about going forward?

No, I think we're still working through the clearing organizations proposals and when we sort of gone through that and thought about it ourselves then we'll be clear where we are at.

Great. Well thank you for taking my questions and congrats on a strong quarter.

The next question comes from Chris Allen with Evercore.

Good morning guys. Just wanted to ask about the fee based balance growth, extracting the $5 billion not included there, growth I think was roughly a little over 12%, that's below the 14% to 20% outlook forecast. Just wondering is it slowing organic growth more of a market impact, any color there would be appreciated.

I don't think it's slowing. I think that we are seeing continued growth in that area but the market I think is to your point is probably more important element here, so we'll see how that one goes but we're again, we're pretty bullish on that whole area.

Keep in mind the last couple years the market has gone quite a bit and it's a little bit more flattish more recently.

Understood, thanks guys that's all I had.

The next question comes from Brian Bedell with Deutsche Bank.

Hi good morning. And congrats to Bill again, we'll definitely miss you. Just a couple questions. Number one on the trade commission capture, Bill can you talk about the - I think you mentioned order routing impact payment for order flow being down in the quarter as well. Can you quantify that impact on the trade revenue capture compression and then just maybe your outlook for payment for 2015?

We had 77 million for the quarter which was good but I think the futures part of the business obviously is on bigger impact in terms of rate, total rate, but the order routing revenue is slightly off. It's not materially off at all, but within less than half a cent a share, so it's still very robust.

You don't get payment for order flow on futures, futures was up 54% year-over-year.

Right, right so it's mostly a mix issue or completely a mix issue actually. Okay, great and then going back to the asset liability strategy and the IDA. If we do have a continued flattening of the curve, how would that change your extension strategy over the next few quarters? Do you plan to be tactical or stick with the same type of extension pace?

We’re probably, we'll field our way through that, but I think right now we would say we would just stay on our extension strategy and not move. It’s hard and we're not going to start trying to predict the market at any given time is if we think there's a normal way in the market and it’s temporary, there are times where we paused in the past and be tactical but then we get right back to where we want to be. That's hard to get right, as Bill, and one of his normal counseling sessions for me, basically said, Fred, keep in mind, that when we entered the year, the GI economic forecast, not one economist called rates where they are today, not one. So, this got this wrong, - so I think it's a very hard one to call whether this is the new norm or whether this is temporary. I’d like to think it’s temporary, I think it’s just a lot of risk in the world particularly with the stuff going on in Europe, and I think with that, whenever that happens there's a flight to safety, when there is a flight to safety, just look around the world all the safe currencies. The U.S. treasuries look awfully good. So, I think, to me there’s just a lot of money flowing into U.S. treasuries right now and sooner or later that will come out once it becomes clear what Europe is doing and hopefully things settle up.

Okay, great, thanks. And maybe just one follow up on the fee compression and the fee-based asset down to 22 bps. I guess the outlook for that going forward, do you see Amerivest doing well in that category relative to the other AdvisorDirect and to fund the marketplace where should we expect compression to -- should we expect Amerivest to grow more slowly than the other areas within your fee-based strategy and that continue to compress the rate on that?

If you look at the net flows into the two products in the first quarter year-over-year Amerivest is up nicely, AdvisorDirect is relatively flattish. So, I would say if anything is the opposite, what we do are seeing is the market impact and that's going to depend on where the people are investing the money and where the flows were over the last year. But so far in the first quarter, Amerivest growth flows are up - 20%, 25%, and net flows are up over 100%.

Okay, great. Thanks very much for taking my questions.

The next question comes from Devin Ryan with JMP Securities.

I have a question on the market back drop and you hear the terms healthy volatility and unhealthy volatility, and it seems that periods of really extreme volatility might be a positive from a near-term perspective but can tend to turn off investors if that persists. So I know you mentioned the retail investors engaged right now but are you seeing any really change in how the client is behaving through some of this volatility over the past couple of quarters or is retail sentiment still really hanging in there?

I would say it’s really hanging in there. The logins are up regardless of which segment you look at, trades are up and logins are up. So, it’s pretty broad based. Investor movement index is up in the month of December, and it continues to be bullish. And you’re looking at whether it’s margin loans, net buying, everything continues to say our client base is pretty A, engaged and B relatively bullish. I think again as I think about it all - where else would you rather be than U.S. equities, right now. And if you are nervous person then you’re going to be in U.S. treasuries.

Huge buying, huge amount of buying from our clients.

Our client base – we'll have an orientation towards the tech and growth stocks, but also there’s been a huge - they tend to be contrarians and they moved into the oil and gas stocks with the big dividend yields and lots of capital to do dividends and buyback shares, they moved into them pretty good. I'd call this a more healthy volatility environment.

Great, that's very helpful. And then with respect to the mobile activity, it's really nice to see that metric moving higher but I'm still trying to put some additional context around what that means. And so the question is are you seeing the statistics spike around the holidays or is there anything to really suggest that a mobile trade is occurring when another trade otherwise wouldn't have, or is it still in your opinion just a reflection of investor preference?

I think it’s both. As investor preference, I think it’s just the way the world’s going. But we do notice two things that might give you some clues. We do notice around the holiday season, we used to almost die in the trading side and this year down a bit but not very much. So people, they can affect trades whoever they are. And we’re definitely noticing in those holiday crunch periods the downs and trading volumes are not what they used to be. Secondly, if we looked at our analytics, our analytics would say, people that have the mobile device and trade with us versus a controlled group of similar people that don't, we would get about another 0.75 trader per month.

All right. Great, thank you very much.

The next question comes from Alex Blostein with Goldman Sachs.

Quick clean-up question on the IDA. Fred, I think you mentioned that you guys had a little bit of a bigger flow of balances in the course of the quarter given the strong net new assets and that's probably going to get reinvested in presumably over the course of the first calendar quarter. A, is that right and maybe you can help us quantify the drag that's created on the IDA yield and impact that will revert in the first quarter?

It's hard to quantify right now. I think the thing you have to keep in mind is that there was two events in the quarter. One, was the whole [PEMCO Janis] [ph] thing which we saw some big flows moving to cash which we saw as temporary. So we sat on as supposed to extend. And then near the end of the quarter, we did see cash build more in the RIA book than anything else. And again - but it's, - I don't know it'd be worth the basis point or two. But we’ve got a tough environment right now. But still feel good that the maturity rates are still well below - if you look at the rolls up over the year, I think its 130 basis points. It’s going to have some bumps through the year.

Got it and then this actually feeds into my follow up. Bill I think on the last quarters' call when we also had a little bit of I think like a freak out in October when the yields dropped, you mentioned that given the maturity profile and the role schedule, you guys would be able to sustain pretty flattish IDA yields over the course of the year, even if rates remain at I think October levels. Any way to reassess that given where the curve sits today?

I never thought I would think that October levels would be so pleasant versus where they are today, but here we are. So, I think it's a - if rates stay where they are right now, certainly that would put some downward pressure or else being equal. We certainly hope to withstand all that with the growth and balances as which obviously benefited us in this past quarter. So, on balance, certainly we've got nine months to go here. We’re not ready to change where we think the outlook is going to be but if balances flatten out and rates stay low, that would be bad. But if we can continue to grow as we’re growing right now, I think we can stand up.

Got you. Great, thanks very much.

The next question comes from Chris Harris with Wells Fargo

Another quick follow up on the buyback. Given the shares you bought back this quarter, how much could you theoretically buy back going forward before tripping TD Bank's ownership restrictions?

That's a lot of shares.

It's like 50 million, 60 million. We are like 60 million shares left on the buy back algorithm of the end of the year.

And TD has been very good. If we hit up to that cap given where prices are. They're glad to sell some shares to take some capital and gains and let us buyback, they have been very good partners on this.

Okay, great. And then another unrelated question. You guys are approaching $1 trillion of assets, it seems to be possibly reachable in the not too distant future. Is there a level of assets where you guys might achieve and then all of a sudden are able to command a little bit more pricing power? And I'm not so much thinking about commissions per say but perhaps other fees you might be able to assess across your organization or if you guys look at that, is that just untenable given how competitive the industry is?

I would not roll that out. We definitely as one of the reasons the investment product fee revenue has been growing is because we have been asking for more on a regular basis. We definitely think there is more room there but as you think we got to get up over the trillion dollars and have a good growth rate if you have those two things you can commend more pricing power on the shareholders services team.

Okay makes sense. Thanks.

The next question comes from Kenneth Hill with Barclays.

I was thinking about your advertising budget here and I know you guys are keyed in on the importance of things like social media and big data analytics. I was wondering how social and big data might have changed the composition of your budget over time and if you see that translate to more efficiencies that could perhaps bring that amount down over the next couple years?

So may I just try to take that into two bites. We definitely shifted some from TV to our online and social. And I think if my memory is right, media spent roughly as 50-50 now between those two. And what we did is, we changed ad agencies and we went off a big expensive commercials to much more of a quick - the commercials now you'll find are much more trying to demonstrate a point that something we have to offer. There are multimedia, they tell us story and they have a little bit of humor. There is a new one coming out I saw yesterday which I think you will enjoy. And so there basically the media cost to produce that has come down quite a bit. And that's all been funneled into a much more scientific marketing program around multimedia and the whole thing basically then shortens downs and play snippets of those ads on different devices and different areas all based on data and analytics. That's the first point. I don't see it so much as bringing it down because there is still media inflation and advertising inflation in general if we can keep that number flat and continue to produce good numbers, to me that means we’re getting more productive with our spending and getting smarter about it. But I don’t see it driving it down to 30%.

Okay, appreciate the color there. And then from a client perspective I know you guys mentioned clients are still engaged here. But given some of the volatility in the market, are there any efforts from an educational standpoint you guys are looking to ramp up whether it's maybe how to use options to protect portfolios or some of your managed risk products right now?

Not anymore than normal. I think we got a pretty robust education offering. We’ve been pushing pretty hard. So there is nothing unique that we are doing right now on the education side versus three to six months ago.

But the education for the -- at the RIA conference I think the options education was usually the most widely of all the sessions that they have. So I would expect that to continue to grow to.

We had to cut off attendance at the option StrategyDesk education session of the conference, it was the first section sold out.

Okay interesting. Thanks for taking my questions there.

The next question comes from Alex Kramm with UBS.

A couple of quick follow ups here I think primarily for Bill. On the order routing fees, you -- I think you blamed primarily the mix to futures, but I think anecdotally on the equity side we're also hearing that wholesalers are giving a little bit more price improvement and not as much payment for order flowing more so. Wondering if you're seeing that too or if that's contributing or if -- how it could contribute in the future?

I think that’s fair and we are seeing more of that. But its not – I wouldn’t characterize it at all as being material but that would be an impact on lower order flow revenue.

Okay and again another follow up. I think you mentioned somebody asked about securities lending earlier and you said it's a very hard item to gauge, and I appreciate that. But when we look at some of the public sector lending data out there, it seems like balances were growing throughout the year last year and then it slowed down in December and hasn't really recovered so far in January. I know it's early in the quarter, but are you seeing the similar trends or is it just too specific of a business for you to -- that macro trend doesn't really matter?

It would slightly impact us. I can fully agree with that. The more difficult part of determining the revenue is the - in the general market where there is a handful five, six stocks that are very hot so to speak. That has been more of an impact than anything else. When we get the episodic hot stocks that are really being shortened for periods of time, those tend to really move the needle. So that is my point earlier about that it's just very, very difficult line item for us to predict.

The amount we can lend is basically function of our merger loans which are pretty healthy. It's really about the hard to borrow stocks and those are hard to call.

All right. Very good. Thanks again.

The next question comes from Chris Shutler with William Blair.

Two quick ones. First, on the net new assets going back to that, obviously very strong. Fred if you had to put your finger on one thing that was the biggest positive surprise, what would it have been?

I would say that the thing that actually stood out to me during the past quarter was the retention rate and the retail side. I think in terms of asset attribution levels, we haven’t seen before. So we are definitely whatever we are doing on the total sale experience and the client experience in those service and the education and support to help people be better investors and traders, clearly seems to be working.

Okay, good to hear. And then totally different topic, wanted to get an update on client usage of ETF at TD Ameritrade and how big are they in terms of assets or revenue and what kind of growth rate you're seeing? Thanks.

Relatively - it peaked a few years ago at about 12%. It's sitting in that probably closer to 10% range now. So I would say it's relatively flat. Certainly it add a big move and zero to 10 to 12, but it is going to settle into that low double digit range for us.

So about 10% of total client assets?

Yeah.

Okay. Thanks a lot guys.

And we have a follow up question from Rich Repetto with Sandler O'Neill.

Hi, Fred. No more questions but I do want to do a better job at one thing and that's I want to say thanks to Bill from the investment community. I've covered the company for 15 years, no one has done a better job at helping us understand the financial aspects of the company. He's always done it in a down to earth, cordial and friendly manner. So I want to do a better job of saying thanks. And then I also heard he's taking some swing -- he's going to take swing improvement lessons from Rocco Mediate is what I heard.

I also heard it, he was trying to get an assistant coach job at Michigan with John Harbaugh.

I just want to do a better job of saying thanks from the investment community.

Thank you very much I appreciate it.

Thanks, Rich. That’s very helpful. And I think with that, we’ll - that will call on end to the meeting. It's a good way to end, with Rich's comments, I think we had a great quarter. Bill's, here, - you’re going to hear Bill for another three quarters. And even after that, he's going to be around as an advisor consultant to myself and a successor, another couple of years. So, well, Bill, maybe retiring, he's here for quite a while and I know him - well, he’ll be hanging around for a while. So with that, thanks everyone. We're off to a great start. We look forward to finishing the year strong. We've got three quarters to go. And we’ll see you next quarter end. Thanks.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Have a nice day.