Brokerages Firms 2013 Resolution - Let's Adapt or Be Broke

Tue Jan 15, 2013 8:01am EST

* Reuters is not responsible for the content in this press release.

LONDON, January 15, 2013 /PRNewswire/ --

    Brokerages and money managers, which include E*Trade Financial Corp. 
[ ], The Charles Schwab Corp., Morgan Stanley and TD
Ameritrade Holding Corp., have roared out of the gates thus far in 2013, propelled by
renewed investor confidence in the direction of the global economic recovery. Volumes
are still lagging behind though as average investors still appear hesitant to jump
completely back into trading. According to the NYSE Euronext, trading volumes in both
the European and U.S. equities markets fell on both a year-over-year and sequential
basis. These declines were also confirmed in independent market researcher ITG's latest
volumes report. The company reported December U.S. trade volumes of 3.6 billion shares
with an average daily volume of 182 million shares. These figures fell from November's
total of 4.0 billion shares with an ADV of 188 million. However, ITG did report that
these figures were a slight improvement over the year ago period. See how these
companies in this industry performed in the past years and how they are expected to
perform in 2013. Talk to our analysts, sign up now for free at  

    Broader volumes may have declined but some brokerages managed to see some gains in
the past few months. E*Trade Financial Corp. (NYSE : ETFC) recently released its daily
average revenue trades (DARTs) data for the month of November. DARTs came in at 130,202
for the month of November marking a 5% improvement from the month prior but a
year-over-year decline of 8%. Sign up today and get insight from our financial experts
on E*Trade at  

    Despite a better economic outlook, several brokerages have been anything but
complacent through the first two weeks of the year. Renewed emphasis on innovating and
taking new approaches to trading could lift the industry even higher. TD Ameritrade
(NYSE : AMTD) provides a good example of this trend. Today it will introduce a new
behavior-based index to better track investor sentiment. The novel index will track all
trades to get a better sense of investors' moods while buying, selling and trading. The
service, dubbed the Investor Movement Index, will give TD Ameritrade a better idea of
what its investors are doing and therefore give it more information to better tailor its
offerings to its customers. TD Ameritrade is on our analysts' list of stock to follow,
sign up to talk to them now at  

    The above sentiment tracking index also reflects an industry-wide shift to greater
transparency. It appears that many throughout the financial sector are gaining a better
appreciation for investor confidence and are taking steps to preserve and increase it
whenever possible. The trend could also be considered a preemptive move to placate
regulatory bodies which favor greater transparency. The Charles Schwab Corp.
[ ] (NYSE : SCHW) joined a growing list of U.S. money
market fund managers that have all agreed to publish daily fund asset values. Prior to
this, fund managers typically posted monthly values and even those were on a 60-day

    The movement towards greater transparency also illustrates an increased willingness
on behalf of the financial sector to address regulatory issues before they become
problematic. The threat of further regulatory changes will always loom over the
financial sector and investors would be wise to closely follow any potential

    Efforts to become efficient and shed underperforming assets are also still ongoing
for many companies within the industry. Morgan Stanley
[ ] (NYSE : MS) announced this week that it plans to
reduce its Asian investment banking workforce by around 15%. The move to reduce its
workforce in the region could be in response to its declining position in certain areas
of the Asian markets. A slowing Chinese economy could also be behind the company's
decision to dial back its employee count in the region.  

    Moving forward, if trade volumes can bounce back, brokerages and money managers may
be in-line for substantial gains this year. Even without a significant improvement, the
outlook for the industry is currently positive because the economy keeps moving in a
forward direction while internal efforts to improve are also ongoing. Another round of
fiscal cliff concerns could certainly undo some of the industry's progress though.  

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CONTACT:  William T. Knight,, +1-646-396-9857 (9:00 am
EST - 01:30 pm EST)
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