HR Block 2005 Annual Report Download - page 72

noncompliance could cause M&P to lose the ability to perform See discussion in ‘‘Risk Factors’’ for additional information.
audits of financial statements filed with the SEC.
INVESTMENT SERVICES
GENERAL ⬎⬎⬎ Our Investment Services segment provides 2004, we added 258 and 255 advisors, respectively. These
brokerage services and investment planning through HRBFA to additions were offset by attrition of 233 and 230 advisors,
our clients in the U.S. Services offered to our customers include respectively. Our overall retention rate for fiscal year 2005 was
traditional brokerage services, as well as annuities, insurance, approximately 77%, essentially flat with the prior year. The
fee-based accounts, online account access, equity research and retention rate for our higher-producing advisors was
focus lists, model portfolios, asset allocation strategies, and other approximately 92%, down slightly from 93% in 2004. Advisor
investment tools and information. Segment revenues constituted productivity by recruitment class is as follows:
(in 000s)
5.4% of our consolidated revenues for fiscal years 2005, 2004
Revenue Total Production
and 2003. Per Advisor Revenues
HRBFA is a registered broker-dealer with the SEC and is a
Fiscal year 2005 ⬎⬎⬎
member of the New York Stock Exchange (‘‘NYSE’’), other Pre-2003 class $ 230 $ 121,342
national securities exchanges, Securities Investor Protection 2003 recruits 114 16,416
Corporation (‘‘SIPC’’), and the National Association of Securities 2004 recruits 98 19,941
2005 recruits 65 8,203
Dealers, Inc. (‘‘NASD’’). HRBFA is also a registered Fiscal year 2004 ⬎⬎⬎
investment advisor. Pre-2003 class $ 216 $ 135,128
The integration of investment advice with our tax client base 2003 recruits 84 17,717
allows us to leverage an already established relationship. In the 2004 recruits 61 7,664
past two years, new service offerings have allowed us to shift our Financial advisors generally reach full productivity levels
focus from a transaction-based client relationship to a more approximately 24 to 36 months after they join our company.
advice-based focus. PARTNERING WITH TAX PROFESSIONALS ⬎⬎⬎ The
CUSTOMER ACTIVITY ⬎⬎⬎ Customer trades in fiscal year H&R Block Preferred Partner Program
SM
facilitates strategic,
2005 totaled approximately 0.9 million, compared to referral-based partnerships between tax professionals and
approximately 1.0 million in 2004 and approximately 0.9 million financial advisors. The program includes the Licensed Referral
in 2003. Average revenue per trade increased to $123.33 in fiscal Tax Professional (‘‘LRTP’’) program and, new for fiscal year 2005,
year 2005, up from $119.36 in 2004 and $120.15 in 2003. We had a non-licensed option, which allows non-licensed tax
431,749 traditional brokerage accounts at April 30, 2005, professionals to gain additional rewards and recognition when
compared to 463,736 at 2004 and 501,001 at 2003. making qualified client referrals to financial advisor partners. The
FINANCIAL SERVICES OFFERINGS ⬎⬎⬎ We offer a full range LRTP program helps tax professionals become licensed to sell
of financial services, including financial planning, college savings securities, teaming them with a financial advisor and providing
products, flexible brokerage accounts with cash management a commission to the LRTP for business referred to
features, and a comprehensive line of insurance annuity products. Investment Services.
Clients may also open professionally managed accounts. As of April 30, 2005, our Preferred Partner Program had
As previously discussed in ‘‘Tax Services,’’ we offer our tax 6,442 active tax partners, of which 686 were licensed. We had
clients the opportunity to open an Express IRA through HRBFA 461 licensed tax partners at the end of fiscal year 2004. As a result
as a part of the tax return preparation process. Clients opened of this initiative, we added 18,164 new customer accounts and
approximately 106,500 Express IRAs during tax season 2005, assets totaling $573.0 million during the current fiscal year. We
approximately 145,400 in 2004 and approximately 105,400 in 2003. will continue to increase the number of tax partners in the
We act as a dealer in fixed income markets including corporate coming year.
and municipal bonds, various U.S. Government and INTEGRATED ONLINE SERVICES ⬎⬎⬎ We have an online
U.S. Government Agency securities and certificates of deposit. investment center on our website at www.hrblock.com. Online
FINANCIAL ADVISORS ⬎⬎⬎ Key to our future success is users have the opportunity to open accounts, obtain research,
retention and recruiting productive financial advisors. One of our create investment plans, buy and sell securities, and view the
key initiatives in fiscal year 2005 was to build revenues through status of their accounts.
the addition of financial advisors. During fiscal years 2005 and
H&R BLOCK 2005 Form 10K
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