Ameritrade, Online Brokers See Gold Mine in Retirement Planning

November 29th, 2011 by Trefis Team
38.38
Trefis
AMTD: AMTD IDEA Group logo
AMTD
AMTD IDEA Group

As economic uncertainty leads consumers to increase (or plan to increase) their savings, investment advisers are offering portfolios to suit their specific needs. Ameritrade’s (NYSE:AMTD) online advisory service launched Amerivest Supplement Income Portfolio, a set of actively managed mutual funds intended to help generate income, with options to investors to customize the payment amount and schedule. [1] The portfolio aims to provide investors with income supplementing other sources of retirement income, such as social security and pensions. Ameritrade competes with other brokerages as Charles Schwab Corporation (NYSE:SCHW) and E*Trade Financial (NASDAQ:ETFC).

See our complete analysis of Ameritrade’s stock here

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Other Brokerages Following Suit

Charles Schwab released nine key guidelines for better retirement planning as almost a quarter of the nation’s population will approach retirement age in the next 20 years. [2] According to TD Ameritrade’s annual New Year’s Resolution survey in 2012, 51% of the people surveyed intend to save for a financial emergency and 30% want to start or bolster their retirement savings. [3] October saw Americans building up their savings, as consumer spending grew less than expected even as income recorded the largest gains in seven months. [4] Ameritrade and Schwab are also enhancing their technology offerings to advisers in order to increase their efficiency in serving their clients. [5] [6]

Our Price estimate for Ameritrade is $22, which is a premium of about 40% to the current market price.

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Notes:
  1. TD Ameritrade Announces the Launch of Amerivest Supplemental Income Portfolios, TD Ameritrade Newsroom [↩]
  2. New Schwab Principles Designed to Help Americans Get Ready to Live on Retirement Income, Charles Schwab Press Release [↩]
  3. Americans Waiting For Economic Uncertainty to Clear; 2012 New Year’s Resolutions are All About “Me”, TD Ameritrade Newsroom [↩]
  4. Orders for U.S. Durable Goods Fall as Demand Cools for Jets, Capital Goods, Bloomberg [↩]
  5. TD Ameritrade Institutional’s New Options Market Center, a Powerful Trio of Technology, Expertise and Education, TD Ameritrade Newsroom [↩]
  6. Schwab Talks Technology for Independent Investment Advisors at Annual Conference, Charles Schwab Press Release [↩]