TD Bank 2006 Annual Report Download - page 43

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Management’s Discussion and Analysis 39
ECONOMIC OUTLOOK
•Money market and cash instruments will benefit from the past
rate hikes by the Bank of Canada, but short-term interest rates
are expected to fall slightly in 2007.
•Bond yields are expected to remain in the low to mid single
digit per cent range.
•Corporate profit growth is expected to slow in response to
an anticipated pullback in selected commodity prices and in
reaction to modestly slower economic growth.
•Strong corporate balance sheets should allow the majority of
firms to bear slightly more challenging economic conditions
and equity valuations generally look reasonable, both of which
should limit any weakness in equities.
•Trading volumes may temporarily rise on concerns over the
future strength of the economy, but these worries should
diminish over the course of the year.
•Continued healthy personal income growth should be support-
ive to investment inflows in the coming year. Weaker economic
conditions may encourage a temporary shift towards more
defensive financial asset holdings.
•Financial planning and wealth management should continue
to benefit from an aging population.
BUSINESS OUTLOOK AND FOCUS FOR 2007
The outlook is favourable for continued revenue growth
in 2007.
Key priorities for 2007 are:
•Improve new client asset growth by increasing the num-
ber of client-facing advisors, both through competitive
hiring and training programs for new and experienced
advisors.
•Focus on diversifying revenue stream to more stable
sources such as fee-based products and net interest
income, thereby placing less reliance on transactional
volumes.
•Ensure that revenue growth exceeds expense growth
through disciplined control of costs.
•Continue to grow our under-penetrated advice-based
businesses by adding new advisors, assets and products.
•Maintain the momentum in mutual funds by increasing
fund sales in our retail branch and external channels.
•Aggressively target the active trader client segment
within discount brokerage, by capitalizing on our new
technology platform and tailored pricing.
•Ameritrade will focus on successfully completing the
integration of TD Waterhouse U.S.A., continuing its
shift toward asset-based revenues and aggressively
managing costs.