By Chloe Aiello
TD Ameritrade president and CEO Tim Hockey said the company feels primed to compete with younger-skewing investment products like Robinhood because it's already deep inside millennial pockets ー and more users join the platform all the time.
"In our case, we have a much more sophisticated trading platform, technology platform, education platform, and we are growing at a very happy rate, so we are quite confident in our offering," Hockey told Cheddar Wednesday.
Robinhood, which bills itself as a disruptive force in brokerage, enables customers to buy and sell stocks and ETFs without paying commissions. It's also become very popular among millennials. But Hockey said TD Ameritrade's millennial customer base is growing at a rapid clip.
"We are tapping into the millennial," he said. "I think close to 40 percent of our new clients are millennials, so we are quite comfortable with our growth across all segments," he said.
But along with younger investors comes inexperience ー which Hockey said had a noticeable impact on investor sentiment last quarter.
"There's been 10 years of a bull run. There's a lot of investors and traders who have actually never really experienced a bear, and so this last quarter there was a pretty significant correction," he said.
Despite the anxiety generated by market volatility, TD Ameritrade beat the Street on earnings and revenue in the holiday quarter, and reported an increase in trading volume, according to Zacks.
But as for the future, the ongoing government shutdown holds some potential risk for brokerage firms like TD Ameritrade.
Hockey said he hasn't noticed an increase in investors tapping their funds to pay bills, even as the shutdown stretches past the one-month mark.
But he said it could cause some disruption down the line, since a closed Securities and Exchange Commission means fewer initial public offerings.
"IPOs are great for our business," Hockey said. "If everything gets pushed out, there will be less IPOs in 2019."
Although the shutdown hasn't yet damaged his business, Hockey acknowledged it's crippling the many federal workers who continue to go without pay. He said TD Ameritrade doesn't want to add to that hardship and recommended that government workers reach out if they are struggling with fees.
"We will work with them on the fees, basically and waive fees for them for this particular quarter," he said.
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