Over the weekend, TradeKing completed its move to Ally.com. I received the official client email on Saturday at 1:57 PM EST, “It’s time to move your TradeKing account to ally.com”.

Making the switch to Ally.com was painless. You follow the steps and login to Ally.com. For those who are already clients of Ally Bank, your accounts are automatically merged under your Ally.com username and password. This was very helpful for me as I’ve been a Ally Bank high yield savings account customer for several years now.

Once logged into Ally.com, you first fill out the market exchange user agreements so your account can receive market data. Thereafter, you are directed into your new Ally.com account dashboard.

With the move complete, you can no longer log in to TradeKing.com. Fans of TradeKing’s website do not need to worry though as the web experience at Ally Invest is exactly the same. The only difference is a fresh coat of paint.

You will know the account move to Ally Invest was successful when you receive the confirmation email shortly after, “You’ve successfully moved your TradeKing accounts to Ally.”

One final note is that the TradeKing mobile app will now no longer work. To access your TradeKing accounts via mobile, download the Ally mobile app via Apple iTunes or Android Mobile.

All of the online brokers have reported their earnings for the first quarter of 2017. StockBrokers.com takes a look back at the earnings reports from each of the publicly-traded brokers every quarter. The online brokerage sector had a solid 2016. How did things get started in 2017? We’ll take a look at fast facts as well as an overall look at each company’s results. We’ll close by summarizing what these reports mean for the online brokerage sector as a whole. Here is a look at the results from Charles Schwab (SCHW), TD Ameritrade (AMTD), E*TRADE (ETFC) , and Interactive Brokers (IBKR).

Before we look at each individual report, let’s take a look at how each of the brokerages did on an earnings per share basis compared to the same period in 2016. Charles Schwab reported 39 cents per share in profits, up 34 percent from the same period a year ago. TD Ameritrade brought in 40 cents per share, up a bit from 38 cents per share last year. E*TRADE reported earnings per share of 48 cents per share, which was down from 53 cents per share a year ago. Interactive Brokers earned 34 cents per share in the quarter, which was down from 51 cents per share last year.

The price war going on in the industry with brokers slashing commissions is something we’ll keep a very close eye on. Let’s see how it impacted earnings in the quarter.

Charles Schwab First Quarter Earnings Fast Facts

Easily beat estimates of 36 cents per share by bringing in 39 cents per share

Total new accounts set a new quarterly record at 362,000 in the quarter

Revenue jumped 18 percent to $2.08 billion

Net interest revenue rose by 30 percent from a year ago

Charles Schwab reported very strong first quarter results. Schwab brought in record net income of $564 million in the quarter. Schwab reported net new assets that were up 22 percent from a year ago. Schwab continued to have success in its advisory service areas as well. The company reported having planning conversations with 38,000 clients in the quarter, which was 12 percent more than a year ago. New retail brokerage accounts grew a whopping 44 percent in the quarter.

Trading revenue declined 17 percent to $192 million after Schwab slashed commissions to $4.95 per trade late in February. Higher interest rates helped interest revenue jump 30 percent in the quarter.

TD Ameritrade First Quarter Earnings Fast Facts

Missed first quarter analysts estimates by a penny on the bottom line

Revenues came in well above analysts estimates at $904 million

Total operating expenses jumped 8.5 percent in the quarter

Daily Average Revenue Trades (DARTs) edged up 2 percent from a year ago

TD Ameritrade missed on the bottom line, but overall this was another solid report for the online broker. Revenues came in about $20 million higher than estimates. Client assets reached $847 million, which was a new record for the company. DARTs came in at 517,000, which is a good number considering the low volatility the market has seen in recent months. Operating expenses jumped in part because of Scottrade-related expenses with the merger. The merger expenses totaled $8 million in the quarter. Interest rate sensitive asset balances rose 11 percent from a year ago thanks to the higher federal funds rate. Looking forward, TD Ameritrade spoke of reduced trading fees lowering their profit, but they believe the benefits of higher interest rates will more than offset that for their bottom line.

E*TRADE First Quarter Earnings Fast Facts

E*TRADE bested analysts estimates on the bottom line by 9 cents per share

Revenues of $553 million came in $21 million above expectations

Non-interest expenses rose 9.6 percent in the quarter

DARTs surged 25.5 percent year over year

It was a really good quarter for E*TRADE. The online broker reported a very strong DARTs number that really opened a lot of eyes on Wall Street. Analysts estimates were blown away on both the top and bottom line. Total customer assets were up 18.7 percent from a year ago. E*TRADE lowered its balance sheet risk again this quarter as they have been on a quarterly basis for quite some time. Net interest income rose 11.1 percent from last year. Non-interest income jumped 26.5 percent. E*TRADE announced net new brokerage accounts of 58,000. That is an annualized growth rate of 6.7 percent. Total customer assets sit at $336 billion.

Interactive Brokers First Quarter Earnings Fast Facts

Revenue came in just below analysts estimates at $374 million

Total DARTs were down 12 percent from a year ago to 657,000

Market-making segment showed a pre-tax loss of $22 million

Earnings per share missed analysts estimates by 5 cents

Interactive Brokers is probably the most volatile earnings report of the publicly-traded brokers. Interactive Brokers disappointed compared to expectations in the first quarter this time around. Interactive Brokers missed on the top and bottom line. They also reported pre-tax profit margins that dropped from 69 percent to 57 percent. The market-making segment saw revenues plunge 86 percent to $8 million. It wasn’t only the market-making segment that disappointed though. Interactive Brokers electronic brokerage division saw revenue drop ten percent. The brokerage segment of the business also reported a disappointing DARTs number. Management announced plans to discontinue its options market making activities. Phasing out those operations are expected to cost $25 million as a one-time restructuring cost.

Conclusion

This was a mixed quarter for the brokers. If you looked at one broker you might think the sector is doing really well. If you looked at another broker, you would probably think the sector is struggling right now. There are some company specific trends going on in this sector. DARTs were very mixed, and it will be interesting to keep an eye on those moving forward. Higher interest rates have already helped some, and they will clearly help even more in the next few quarters.

The biggest question is what happens to profits following the large drop in commission fees? These brokers will have to find alternative ways to make money. They’ll still make some from trading fees, but it will be a much smaller percentage of their earnings. The brokers who are better diversified when it comes to revenue streams should outperform the sector as a whole when it comes to earnings in the next few quarters.

Below is a yearly chart of all four of the brokers. The charts are as of the close of trading on April 25.

With the Wealthfront Portfolio Line of Credit the formula is simple, clients can take a line of credit of up to 30% of whatever is invested in their Wealthfront account at an interest of 3.25% to 4.5% depending on their account balance. Uses could include a down payment on a home or vehicle, for example.

To qualify, the client must have at least $100,000 with Wealthfront. According to Wealthfront, there is no pre-approval process either, all clients are automatically approved.

Wealthfront notes that the product is a margin product, for example when investors trade stocks with leverage or short shares, both of which require portfolio margin,

“Portfolio Line of Credit is a margin lending product offered exclusively to Wealthfront clients by Wealthfront Brokerage Corporation, Wealthfront’s brokerage subsidiary.”

On a high level, the product makes sense. I’ve never taken out a HELOC myself, but if it’s anything like a home mortgage, then it must be paperwork intensive. Shaving the application time down while saving a few extra percentage points and still having money invested and compounding in the stock market seems like an easy win/win. Note though, the interest payments on a HELOC are tax-deductible while Wealthfront’s interest payments are not.

For Wealthfront, success with Portfolio Line of Credit could mean more than just capturing additional revenue from current clients. To access the product you must be a client, which means Wealthfront is brewing a fresh angle of marketing, too.

SOURCE:
Giving Credit Where Credit’s Due
April 19th, 2017
https://blog.wealthfront.com/introducing-portfolio-line-of-credit/

https://www.forexbrokers.com/annual-forex-review

20 FX brokers, 255 variables, 5239 data points.

Steven Hatzakis, Global Director of Research, commented,

Our findings provide traders and investors with critical insights for selecting the right forex broker. With eight months worth of research now complete, I couldn’t be more pleased with the final report and am excited to be sharing it with the international forex community.

Read the Press Release

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With Schwab Intelligent Advisory, as compared to Schwab Intelligent Portfolios, clients gain access to Certified Financial Planners (CFPs), ie human advice. The best way to look at Schwab’s new service is to think of it as a discount advisory service. Here’s a summary,

Schwab Intelligent Advisory competes head to head with Vanguard’s Personal Advisor Services. The minimum to open an account is $25,000 (Vanguard’s is $50,000) and the annual management fee is just 0.28% with no fund expense ratios and a quarterly cap of $900 (Vanguard’s is 0.30% + fund expense ratios, or approximately 0.49% all-in). Betterment’s new Plus and Premium offerings are also competitors, albeit much more expensive.

On paper, it appears Schwab has Vanguard beat. That said, there are still aspects that are not clear with Schwab Intelligent Advisory. Open questions include what the portfolio holdings are and what portion of each portfolio is allocated to cash.

Regardless, Schwab’s new service stirs the pot in a big way and is yet another plus-one for investors with smaller portfolios seeking human guidance.

SOURCE:
Schwab Intelligent Advisory Makes It Easy for Investors to Have a Customized Plan and Automated Portfolio
http://pressroom.aboutschwab.com/press-release/schwab-investor-services-news/schwab-intelligent-advisory-makes-it-easy-investors-have
March 14th, 2017