Good day everyone and welcome to the TD Ameritrade Holding Corporation's September quarter and full-year 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, and good morning, again, everyone, and welcome to the September quarter and fiscal year 2014 earnings call. Our press release and earnings presentations 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. We have a full agenda this morning, including our 2015 guidance. Therefore we would ask you to limit your questions to two so that we can cover as many questions as possible. With that, let me turn the call over to Fred.

Thank you, Bill. Good morning and welcome everyone. Well, 2014 is now behind us and what a year it was. The continued successful execution of our growth strategy has resulted in our delivering records on virtually every key business metric that matters. From trading to asset gathering to investment product fees, there are strength to be seen in nearly every aspect of our business. Let's start by taking a look at how we ended the year with a brief review of the fourth quarter highlights on slide three. We ended the quarter with an average client trades per day of 403,000, an activity rate of 6.4%. Net new client assets were $13.4 billion, an 8% annualized growth rate and up 32% year-over-year. Client assets ended the quarter at a record $653 billion, up 17% from last year. Average fee-based investment balances were a record $144 billion, up by 18% year-over-year. Interest-sensitive assets were a record topping $100 billion, up 5% year-over-year. We earned net revenues of $795 million, our second best quarter ever, up 12% year-over-year. This resulted in our delivering $0.38 in diluted earnings per share, up 6% year-over-year and up 23% if you exclude investment gains we reported in the fourth quarter's of both 2013 and 2014. And we took advantage of the environment, so we purchased shares of our common stock, buying back 3.1 million shares during the quarter. Now let's take a look at how these results factored into our fiscal year with a review on slide four. As you can see, 2014 was a record year for TD Ameritrade on every metric that matters. We reported record average client trades per day of 427,000, an activity rate of 6.9%, up 14% from last year. We gathered a record $53 billion in net new client assets,…

Thanks, Fred, and good morning, everyone. Well, 2014 was a year for the record books. Despite a continued low interest-rate environment, we achieved record revenues and record earnings-per-share. These results are something our team is very proud of. The earnings-per-share results were slightly ahead of the high-end of our guidance range we provided you a year ago. This was achieved through strong trading and a continued focus on organic growth. For a closer look at our results, let's begin with the financial overview on slide nine. We will start with the September-to-September comparisons on the left side of the page. On line one, transaction-based revenue is up $26 million, driven by 21,000 more trades per day, an increase of 5%, as well as an increase in the commission rate of $0.36 per trade. The increase in rate was primarily driven by continued strong order routing revenue, particularly from our options business. On line two, asset-based revenue is up $63 million primarily the result of increased margin balances, elevated net stock lending rates and growth in market fee-based balances. As a result, net revenues on line four came in at $795 million, the second-best quarter in our history, which is up $86 million or 12% from last year. On line five, operating expenses excluding advertising were up $37 million or 10% to $412 million primarily due to increased headcount related to planned investments, trade volume and mix drove higher clearing and execution expenses in various unusual items of approximately $12 million primarily related to incentive compensation for record results. Excluding these items, we would have been at the top end of the range provided on last quarter's call. On line seven, our total expenses were up 6% from the prior year as our advertising expenses were down $10 million, as expected.…

(Operator Instructions). We have a question from Rich Repetto from Sandler O'Neill. Please go ahead, sir.

Yes. My first question is, was Bill Gerber working through Ameritrade 1973 as CFO to know that net income was that low between 1973 and 2003?

I have so much information, my friend, perhaps Rich you can't believe it.

I bet you were CFO at four years old back then.

I wish.

Okay. First question is on the outlook. Just a couple of things. As the DART assumption lower than this year. You have got volatility picking up a bit. I am just trying to see why you chose. And then it looks like there is some movement in either the tax rate or the she [ph] accounts to get to the different EPS ranges that you had. So could you give us the tax rate guidance and share count that's implied in that?

Okay. Hi, Rich. It's Fred. I will let Bill deal with the latter two questions and I will deal with the activity rate. When we forecast the activity rate for the earnings guidance, we typically look at the last three years and we will guide around that, and that's really how we got to 6.2% to 7.2%. And we have talked to the management team and if it goes above 7.2%, we won't stop it there if it happens.

I will deal with the second part, Rich. So the tax rate is a 38% to 39% and we are assuming that we will buyback between 7 million and 10 million shares.

Okay and then my one follow-up, just total different subject, but online advice. So your bigger peer from the West Coast announced yesterday they are going to, in the first quarter, offer online advice free and I just was going to see, I know you have got a day, just one day to digest it, but is that similar? And would you think that, -- how does your online advice Amerivest compare and what do you think about the threat or the risk of them offered free out there in the marketplace?

Well, I will start off by saying, nothing is ever free-free. I think it has no wrapped fee but it does have underlying MERs and the ETFs and the funds that are inside it. It's interesting to us. The robo-advisers has certainly got a lot of media coverage. There is no question about that. I am not sure who came up with the term robo-advisers, but anyways it is there. When you look at it, the reality is, a original version of Amerivest was technically based on what you would call a robo-adviser, which is an online advice offerings, was our early-stage robo-adviser. And we offer that for a decade or more. And it was is based on our experience, a purely online model will struggle to scale and to do this properly, and to appeal to a broad enough part of the market to scale and make any money, you need a combination of a digital and human approach and a multichannel approach, and that's important to get the client comfortable and confident in the investing experience and to make those purchases. Having said all that, it's something we are definitely monitoring and we will continue to monitor and if there is things we can learn about it or things we need to make adjustments on, we will certainly do that. But at this point right now, we are basically full steam ahead.

Okay. Thanks and congrats on a good fiscal year.

Our next question is from Chris Harris from Wells Fargo. Please go ahead.

Thanks. Hi, guys. So first question relates to your guidance on asset gathering. Again really strong growth expected for next year. I was curious, usually when you think about the industry, if there is a slowdown or tapering off of ad spending, not always but historically often times it led to slower asset gathering. Yet you guys now are projecting really good growth and kind of flattish on the expense side, just wondering if you guys can comment on that a little bit? Are you guys getting more of a push from your sales force that makes you comfortable in achieving asset gathering with limited expenses? Or is something else happening there?

No. We have had a long-term goal of 7% to 11% for six years ever since we started that journey, our asset gathering journey. We have been at the high end of that range for six years in a row. We have always said that basically, we will not be able to keep up the double-digit numbers forever. The bigger you get the harder it gets, but we feel comfortable in the upper single-digit range is that we should be able sustain that. I think that given what we see going on today and we do see changes in the world in terms of how people are using technology, the newer technologies, whether it be data and analytics or mobile or social media, we do see changes happening and opportunities happening and I think where we are right now, basically to continue that our journey on the retail side and on the institutional side, we put an extra emphasis in 2015 on technology approaches. And both, I would emphasize, there is some of that in the sale, but a lot of it is in the post-sale, I think where we still have opportunities as an organization. It's after the product has sold and the person has an account with us and begins trading and investing, how we personalize that experience and bring opportunities to them that they likely a have a high interest in. And we have been investing in data and analytics now for over two years and getting it ready. And I think we are now finally at a point where we can start to capitalize on some of those opportunities through the more electronic channels.

Okay. Great. Makes sense. And then just my quick one follow-up. On the net interest revenue guidance, what are you guys assuming from fees from stock borrow line there? Is it consistent with the current run rate and how confident are you in achieving that type of a number?

We don't give a specific number out on that, Chris, but we do think it's going to be sustainable. It has been growing pretty consistently. And obviously it is tied directly to the level of the margin lending in order to provide the pool available. So we are pretty confident. And so, yes, it's consistent with the 2014 levels.

Got it, great. Thank you.

And our next question is from Michael Carrier from Bank of America. Please go ahead.

Thanks, guys. Just on the capital deployment. So you increased the dividend. You guys have been more active on the buyback front. It's still, I think if I look at year-over-year, your cash balance is up about 30%. So maybe just near-term, you want to be holding higher cash balance, what are the priorities? And then longer term, as rates are rising and your cash flow continues to accelerate, just how are you thinking about that, just given some of the restrictions on the buyback side?

Well, I think, to start with, we have lots of room on the buyback. And keep in mind that TD is just over 40%. So we have lots of opportunities to buyback shares. I think first I have to go back and then we look at, there is cash that we look at, but there is also tangible equity, which is important to the rating agencies and to regulators. And so I think that's the first point. The second point, we have always said we have five uses or possible ways to deploy or return capital and the first one that we have always prioritized has been investments in growth, whether they be organic or through acquisition, provided they make strategic or financial sense. We have been investing over the cycle. We have increased our marketing spend quite a bit. We have put a lot of money into technology. We have added salespeople. We will continue to push on that in 2015. We will focus more on technology and we are leveraging some of the newer technologies in everything we do. Then we have our debt where we would like it. So we are really not looking to pay down our debt in any way. We are very comfortable with our long-term debt at the level to EBITDA that it is. So that may come down and we are basically as a management team somewhat indifferent between recurring dividends and share buybacks. And the last of the thing, our last option is, if we get through the year and still have lots of excess cash or tangible equity, we can always return it through a fifth or special dividend if we so choose. And I think right now, making sure, as Rich said, you know, it's a volatile environment. Yes, trading could be higher than we are putting in the outlook statement. And I have said before that basically when the fed starts to pull out, there is no way that they do that and everything is nice and calm. It's going to have volatility and so having some firepower to take advantage of opportunities, whether they be share repurchases or investments in those environments is something we treasure and want to have. It's worked for us in the past, and we are not afraid to pounce in those types of environments.

Okay. It makes sense. And then Bill, just on some of the numbers. I think you mentioned and I just missed you as you were going through it, but on the expense side in this quarter, just any unusual items or maybe elevated levels on that, just wouldn't be normal going forward? And then just on the guidance. So when I look at the margin this quarter of 42.5% and a range of 41% to 43%, this is typically a seasonally lower quarter and some of those expense are elevated, it just seems pretty conservative. So I didn't know if there is something that we are missing there. And then on the other income or the other expense, that range of 25 to 40, I think you just said you refi-ed some of the debt. So it seems like that would be coming down. So just wanted to make sure there was nothing else going in that bucket that we should be expecting for fiscal year 2015?

Wow. So first of all, in the fourth quarter we had $12 million that I would call unusual expenses and it was primarily driven by a higher incentive comp. So that was the first point. The second point, it was on the, anything missing in the guidance. No, I don't think so. We think that the guidance range is appropriate, given where it is right now and given the potential growth. And the third is, we went from just pointing something out to me here. I am trying to figure it out. The interest expense is what's really driving the other expenses for the year and obviously we issued the ten-year piece of debt and retired a five-year piece of debt. So actually rate, all-in, slightly increased. So those, I think, are the three big points there.

Okay. Thanks a lot.

Our next question is from Devin Ryan from JMP. Please go ahead, sir.

Thank you. Good morning. Just one on the commission rate. I apologize if you addressed this but it looks like it jumped up to the highest level since 2010. So just trying to get a little better perspective of what was happening there? Was it mix? Payment for flow? And how should we think about that moving forward?

It was mix. We call it our order routing revenue and so that and particularly and the options side of the business. So that is where we are seeing the strength.

Okay, got it. Okay, thanks. And then just a question on the institutional channel and the migration of independent advisors to your platform. So the trend still seems like it points toward independent RIA and you guys highlighted a healthy pipeline, but I think there is a view out there that many of the advisors that maybe weren't the right fit for wirehouse or wanted to do something more entrepreneurial have transitioned already to new platforms. So I just wanted to get your perspective based on what you are seeing and do you expect the channels moving forward to look different than where they have come from in the past handful of years?

I do think the wirehouse has gotten better at retaining their better brokers and producers and having said that, our experience is that there continues to be lots of opportunity. And there is always one player, whether it be one of the big wirehouses or one of the independent broker-dealers that is doing something, whether it's on their payment grids or compliance or something else that causes some people to be dissatisfied and whenever they are dissatisfied they will consider that opportunity. And from our perspective no, we haven't seen any let up in the numbers. In fact, while the numbers that we basically go after, we moved up market. I bet we are getting some bigger and some better breakaway brokers onto our platform. And they are really intrigued by some of our offers like the iRebal offer, the Veo open access and our options market center. Those are the types of things that are starting to appeal to bigger brokers that want to break away, because I think we give them a lot of options, a lot of help and we give them a lot of the support, help along the way to make that transition.

Great.

But we haven't seen a trailing off.

And our next question comes from Alex Blostein from Goldman Sachs. Please go ahead.

Good morning, guys. So quick follow-up on the net interest income guidance, just a clarification, I guess. When you guys look at the high-end of the range, which has increase in fed funds and increased in yield curve. Do you essentially just rely on the forward curves, which I guess right now imply, kind of like a September-ish first hike, which of course is your fiscal year and so it doesn't feeling like there would be a lot of benefit from higher rates baked in here.

We use the global insights which actually is in the appendix. You can see the ranges that they have and so we utilize them for every year and their first rate hike is right now expected to be June. So that's how we develop that.

Got it. And then my second question, I guess on just around expenses and investments you guys are making in the business. Given maybe the slightly better revenue environment that we anticipated in 2014, did you feel like you could pull some of the projects spend forward into this year and at the same time, I guess that gives you a little more flexibility to put a few things in the back burner if environment does slowdown next year?

We haven't pulled anything forward, so to speak. We did make some investments during the year that we didn't plan on beginning of the year as the results a little bit better. Just there was opportunities that we saw to increase our investments and we did do that. They are largely in technology. We do have a view of the worlds changing here because of some of the newer technologies that I mentioned and we wanted to make sure we got out in front of those and recognizing that some of them takes you two or three years to really get traction on them. But we just continually have invested through that in 2014 and will continue to do it in 2015 because we do see opportunity. We have seen some traction and I do think the world is going through quite a change in technology and it is being led by cloud computing, data and analytics, social media and mobile technologies and we want to make sure that we are not behind the curve in those things and leverage them in our business and with the way our clients want to interact with us.

Got you. It all makes sense. Thank you.

The next question is from Kenneth Hill from Barclays. Please go ahead.

Hi, good morning, everyone. Wanted to follow up on the commission per trade trends. I was hoping you can give some comment on the competitive environment going forward for order routing? And then I think in the comments you mentioned derivatives being one of your focus. I mean how much more penetration do you think is available there, given you have got, I think you said, 33% of the trades coming from derivatives at this point. So what gets that to a higher level over time?

So why don't I think the derivatives trading and then I will turn your first question back to Bill. The derivatives, every year I say this, I think it has run its course, but every year it continues to grow and you can see our overall trade volume, trades per day, were up 14%, but the derivative trades were up, if my memory is right, 29%. And so we continue to see interest and adoption in them. And a lot of the things that we offer in terms of the education, the tools and things like that. So we continue to see interest in it and so we are going to continue to push it. And as long as that trend continues, we are going to continue to push. And we haven't seen any -- where do I see it ending? If you ask our people in our trading group, they would say it's going to be 50% derivatives. We are up 41% now. Whether that happens or not, I don't know but we are definitely seeing continued growth in the adoption of options in particular and we have taken futures from zero to roughly 8% of our trade volume in three years. So there is no question, there is an interest out there and there is a market for it and we seem to be tapping into it. And we are going to continue to push on those things until we see the growth stop.

And then the order routing and the competition in rates. We are seeing still a continued interest in our flow. So it is in areas that we look at and work on every single day, obviously, starting with best execution. So everything starts with that. But right now we see the competition being still very strong for our flow.

Okay and then follow-up was, during the quarter you signed a new strategic relationship with Equity Administration Solutions. I was just hoping you can give some feedback there for the early days. How that's going and how that can support some net new asset trends going forward.

I think it's still a little early. Once you start a strategic partnership, it takes you a bit of time to get it up and running and get both parties working to their mutual benefit. So I think it's still a little bit too early. But we do see other players in the market that have done some decent net new assets or at least new accounts out of it. But you do, even if you open a new account you do lose a fair bit. But we saw it as an option to get a new channel open for us through a partnership and so we decided to take advantage of that. But I think it's a little too early for us to give any sort of early results.

Okay. Thanks for taking my questions.

Our next question comes from Alex Kramm from UBS. Please go ahead.

Hi, good morning, everyone. Wanted to, I don't think anybody has asked, around the IDA balances. When I look at those, to me it looked a little bit aggressive in terms of the guidance that you consider that fiscal 2014, basically those balance have been flat, and I certainly hear you that last year there has been a lot of money deployed into the market. But even if I look at your net new asset growth assumptions overall, even if I assume some 15% or so goes into cash, it seems like those IDA balances still won't get to your low end of your guidance range. So just wondering what you are seeing out there? And maybe related to that, I think you have $5 billion and change sitting on the brokerage balance sheet in terms of client cash. So are there any potential sweeps or anything you are thinking about here? Or how do you get there?

No sweeps. So we are not looking to sweep anything into the IDA. We think that the buying will revert more to the mean and you can't overestimate the effect of $18 billion incremental buying between last year and this year and we expect that the client cash as a percentage of total assets will also get back in to the 15% to 20%. So it's a combination of those two things that are really driving where we see the IDA being in 2015 [ph].

And I think the average IDA balances for 2015 is around $77 million, $78 million, if my memory is right and we are running about $75 million and we have been up at $76 million recently. So we have seen client cash tick up a bit and so far in October.

All right, that's great to have. Thank you. Then maybe just secondly, I think it's been asked a couple of times, but just coming back to the commission level on the trading side, it seems that I think you had a very high number this quarter. So the guidance really suggests that that's coming down, again. So with some of the comments you made earlier in terms of payment for order flow being stable and things like that, why are you guiding that down? Maybe I have missed it, but maybe just to flush it out again.

It's really pretty reasonably flat year-over-year. We do think that it should stay in the range that we are thinking about. We might be possible being a little conservative there, but we do think that the range is reasonable.

All right. Thank you very much.

Our next question is from Brian Bedell from Deutsche Bank. Please go ahead.

Thanks very much. Good morning, folks. Just to go back to the trading activity again. So within the guidance range, what is your expectation for increasing use of derivatives? So in other words, that 41% goes to what in the low and high end of the range? And then, if we do beat the high end of the range, how do you think about incremental margins on the higher trading revenue. I guess, would you deploy more of that to expense projects? Or should we think about most of that coming to the bottomline?

Why don't I take --

Take the second question. I will take the first question.

I will take the second question and let Bill deal with the first one. I think when we look at investments and whether we should invest or not, somewhat just the earnings take home comes into account. But what primarily comes into account is basically our business growth metrics. So whether we think the market's right and we are gathering lots of assets, we are getting new accounts, we are opening new option trading firms and results are good and the market's good, because it does depend on the sentiment of the market. One more client to invest. If the market is sort of flat dead, we are less inclined to invest and one of the interesting things that we have learned is that in more turbulent and more volatile environments, we tend to do well. In fact, so far in October, we have increased and opened the taps on some of our marketing programs, just because our experience says those are opportunities when people are looking at their investments, they are on the online channels, they are following the markets and particularly in our channels, we do well. And so, it's much more the environment and the opportunities that we see that will dictate how much we invest more than the earnings.

And then the outlook. The range actually, Brian, is pretty tight. So I would just keep it in that 41% range. It's probably a good way to think about it. Certainly, as trading goes up, we expect everything to move up, but we are not really looking for a major jump in terms of percentages of derivatives as a percentage of total trades.

Okay. That's helpful. And then just on the IDA yield. So just going back to that appendix on slide 19 for the LIBOR swap curve. Any guidance there in terms of the low and high end of the ranges that are implied in your IDA yield? I think Bill, you mentioned that about $0.01 of downside risk, if we got back to the yield curve that we saw a few weeks ago. How does your strategy change in that environment if we had that type of pressure that was prolonged for a few quarters? How would your strategy change in terms of moving maybe potentially more assets into the shorter term floating or less extensions?

The outlook assumes, we are looking at flat on the low-end. So the curve wouldn't move. The upper end would be certainly that the curve is exactly right. But we would probably will not look at it really as strategy change and prolonged that's a difficult one. We think we have been in a prolonged period for a long time now. But if it continues to remain at this level, while we have something that we look at in our whole hedge profile and how we are going to balance what goes in to float and what goes out on the curve. But we are trying to make sure that you are not going put yourself into a little pressure situation if rates do start moving. So it will be -- but that is really an art form. We spend a lot of time looking at that. So there is not really an easy answer to that one. So that's, I guess, the best guidance I can give you, Brian.

Great. Okay. No, that's fair. Thanks very much.

Our next question is from Bill Katz from Citi. Please go ahead.

Okay, thanks. Just all of my questions were asked and answered, but I just wanted to come back to capital return for a moment. You mentioned that acquisitions are always part of the overall thought process, but as you think about your platform as it stands today, certainly given the internal momentum you have, what areas, if any, do you se as product holes or capability holes that you might be looking externally for at this point?

There is nothing that I could point to at this point, Bill, but it doesn't mean we don't keep a wide net out and just continue to look at different opportunities, whether they be what you would call traditional acquisitions or they are more capability based. And we have had, obviously with the thinkorswim transaction, it just turned out to be a clear home run for us. It was a capability-based acquisition. We continue to look for those but we haven't seen anything that fits with what we are trying to do at this point. And any time we do see an opportunity that we might want to take it, so far we have come to the conclusion, we should build it, and that's really where we went up with futures. We could have went out and bought a futures brokers. There was couple available. But as we looked at what they did and who they did it with and we looked at what it would take us to build it in house, we decided to build. So that's just an example, but so far we have always opted for the build versus the buy.

Okay, thank you and just one last one from me. Thanks for taking both the questions. When you think about deposit data or IDA data, if you will, if rates were to start to track higher, obviously we have been in the lower for long for quite time now, but if rates were to go up, what kind of competitive dynamic do you see playing out? Could that put any pressure on the ability to retain the IDA balances?

I think it varies depending on where the interest rates are. We do have a view and only time will prove whether it's right or wrong, is probably the first 50 to 75 basis points are going to see the substitute products, which is the money market fund industry try to restore their margins and so there will not be a lot of sort of competitive rate pressure, whether it be from other banking products or other substitute products, up to that point. But once you get through that 50 to 75 basis points, then I do think you will start to see competitive pressures steep in and compete on cash rates. We have never, I think one of our things is, all of our balances are client cash sweep accounts. We have really nothing that unlike some of our peers, we have not been high yield marketers of checking or savings accounts. In our past, we have no plans to. So I don't we are as vulnerable to that as others. But that doesn't mean there is not some competitive structures. We have segmented our client base. And we have different rate structures for each segment. So we have gotten a lot more sophisticated over the cycle, anticipating that when we come out of this, whenever that is, that basically we have a variety of tools that are at our fingertips to manage that competitive environment.

Okay, thank you.

And our next question is from Joel Jeffrey from KBW. Please go ahead.

Hi, good morning, guys.

Hi, Joel.

Just a question on the margin yield. I mean that's continued to come down. I am assuming that's due to just more active traders who are getting better rates being more active in the margin area. But how low can we expect that to go and sort of barring any kind of high and short-term rate increase, is there anything that can slow that decline?

Well, your facts were exactly right. So, yes, the people who are using margin are more active clients. I think that the rate seems to have slowed the rate of decline. I think what's happening is that as the markets continue to get better in the broader acceptance, so to speak, of going back in the market and using margin, we are going to see more of the people with the rack rate getting in. So I don't think there is anything specific we can do about it. We obviously only give preferred rates to clients who do merit it. So that's something that we watch all the time.

Okay and then, just lastly from me. The net new asset growth has been pretty impressive over the last years. Just wondering, what you view to potentially be the biggest risk to that slowing down?

That's a good question. Always keep in mind, where we have said that basically the institutional side will grow twice as fast as the retail side. And the main reason for that is because the existing RIAs are basically our asset gatherers unto themselves and grow at rates that are not far off of the retail side. However, when you are adding all these new producers every year through the breakaway broker trend, that's what basically takes it up to two acts. And so something that where the breakaway broker trend does change would definitely slow it down, but we haven't seen any signs in our pipelines or sales funnels of that happening at this point.

Great. Thanks for taking my questions.

And the next question is from Chris Allen of Evercore. Please go ahead.

Good morning guys. Just wanted to actually follow-up on Joel's question, net new assets. You talk about the investment in technology and looking at personalization moving forward. The read through to me is that, that's a bigger opportunity in the retail side. So I was just wondering if, from a net new asset perspective, there is a better opportunity for retail moving forward to maybe seen in recent periods relative to institutional?

There is. We haven't just figured that out quite yet to get it going much faster and our experience in this business, basically, you wind up that if you are not expanding your distribution reach, and what I mean by that is adding sales people, all the time, it's hard to really grow that number much faster. Keep in mind, the bigger you get, the harder it gets. But I think on the personalization side and whatnot, I think there are opportunities there in terms of cross-selling, gathering additional assets but we have invested in that quite a bit the last two or three years. Now we will start to see whether we can really get some good traction on that going forward.

Got it. And then just in the near-term October DARTs were very high levels, and you mentioned that client cash has picked back up. Sounds like risk appetite is coming down. Has that had an impact on stock lending and margin at the start of the fiscal 2015 so far?

It's been flattish, I would say, and so again in line with all of 2014. So as I said earlier in the outlook statement, we are expecting flattish results in that section for the next year.

Thanks, Bill.

And our next question is from Chris Shutler from William Blair. Please go ahead.

Hi, guys. Good morning. So first just on the sort of minor question, but the investment product fees looks like you expect the yield to go down a little next year. Just wondering what's behind that? I am assuming it's just mix. But if you could clarify?

It would be mix exactly, right.

Okay and then, Fred, you mentioned personalization several times in this call. Just hoping that maybe you could flush that out a little bit more, maybe provide an example or two of exactly what you are thinking. Thanks.

Well, if you watch what's going on with a lot of the newer technology players, so as an example, well I was flying to Omaha yesterday morning, there was an article on Facebook. And I will just give an example and one of the statistics they quoted in there now is that 30% of Americans basically get their news through Facebook now, which I found quite startling to me. But what they do is, they don't basically, they are just aggregators of content and they personalize that content. So they will show you content that based on your behaviors on money and whatnot that probably peak your interest. So they personalize your experience that basically the media materials and the articles that you get are customized to your interests. So take that and basically what we are talking about in the investing and trading business is the same thing. So when you come in, if you always go to a certain screen, we may set you up to basically, you automatically go to that screen. If you poke around on the website to see different things and you show interest, we will call back or basically make marketing pitches to you to basically to take your interest further and see if we can give you an opportunity to deepen the relationship. So it's much more based on what I call your behavioral data that basically what you do, we are trying to make it such that it's easier for you to interact with us. It is easier for you to find the information you are looking for. When you think about our website or mobile offering, there is a lot of stuff there and probably the biggest problems is basically how do you package that in different ways that's more relevant to each of your clients, based on their interests and needs. And that's really what it's all about. We just talked about examples in the past where people we know, if they poke around on options or education they have an interest in and if we come back to them with either a phone call or a special offer around that, they have a much higher buying propensity.

Great. Thanks a lot.

And our final question is from Steven Chubak from Nomura. Please go ahead.

Hi, good morning.

Good morning.

I just had a quick follow-up to, I believe it was Bill's question, on IDA balance growth. It appears the healthy level of IDA balance growth, at least you are contemplating for 2015, reflects in part the expectation that competitive pressures for cash will not increase until we realistically see the fed hike rates more than 50 or 75 bips, which just given global insights and other sources suggest won't happen until 2016. And if we do see the fed hiking in the back half of next year, I am just wondering how your thoughts around IDA balance growth actually evolve beyond 2015? Would you expect to see a slowdown in that growth as clients migrate more cash into higher-yielding securities? Or do you expect those cash balance to actually remain a bit stickier?

Based on all of our analysis of history and different events, they are that are pretty sticky. So we would not see much of a change there. It will go up and down based on asset gathering and it will go up and down based on market sentiment. but of all of our analysis, it is not so much the deposit balances that change, what changes that client cash to client assets range is the denominator. So it's a client asset. So when you get an environment where, like we did last year, the S&P 500 rises 30%, your ratio of client cash to client assets is going to drop. It just is going to. We could show you charts in the past and then if we have a correction, it will rise. And so it's much more sensitive to the denominator than it is to the numerator. But the client deposits themselves basically have been pretty sticky and pretty stable through a variety of environments, I think this year was the first year we didn't see it grow much and I think that follows on the environment. Basically you saw a rise of 30% in the S&P 500 in 2013 and people started to invest in the market. And so you do see a little bit of that. But I remind you, it would have stayed flattish, it just didn't grow if the rates we have seen for the last number of years. Hopefully, that helps you.

No. Actually, it's really helpful, Fred. Thank you. And then just a little more quickly on some of the technology investments that you highlighted. It sounded as though the bulk of those investments are actually tied through revenue generating activities. I just wanted to see whether your investment plans, at least for this coming year, contemplate the need to maybe make more meaningful investments in some non-income generating areas such as cyber security is probably the one that comes up most often?

We have been having investors in what we call technology resiliency, stability and security now for as long as I have been the CEO. It's an area that just never ends. Just give you some examples. We put in our new data center and all new infrastructure probably four years ago. We are adding another core data center again next year. And we are moving to what, just to impress you with, not to try to impress you, but some technical terms that allow us to mirror data between both data sites. So we will actually have three datacenters with two that are live back and forth and synchronous at all times, which would be state-of-the-art for resiliency and data recovery when you have events. We continue to invest into cyber security and we are involved in all the industry tests with all the different players. This is something I don't think any of us can let up on. It's something you have to stay on every day because the game keeps changing and the attempts keep moving. So it's a never-ending race. And so we continue to invest there. And we will invest a lot next year in terms of, we are putting in a new order management system. We are going to have a new clearing strategy in terms of our back office and middle office operations in terms of how we architect those various systems and structure them for increased flexibility and resiliency. So there is lots in those areas too. I just don't cover them because it's really try to, in these calls, talk more about the things that drive the numbers.

No. Fair enough. All right. Fred, well, I appreciate the color and congrats on the quarter.

Thanks. Well, thank you very much. I think that brings us to the end. Does it? Okay. Well, thank you, everyone, and I think in closing, 2014 is now in the past. It was a fantastic year for TD Ameritrade, with records on virtually every metric that matters and record earnings. So we feel very good about that as a management team. We have already rotated into 2015 and we are off to a great start with a little bit more volatility in the markets which certainly bodes well for trading, but also bodes well for our asset gathering efforts. So we are off to a good start but we recognize we have got just over 11 months to go here and the management team remains focused and we will talk to you again in January. Take care.

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