TD Bank 2011 Annual Report Download - page 29

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TD BANK GROUP ANNUAL REPORT 2011 MANAGEMENT’S DISCUSSION AND ANALYSIS 27
BUSINESS HIGHLIGHTS
• Wealth Management net income of $776 million was 21% above
2010, while Global Wealth, which excludes TD Ameritrade, was
up 27%. The Bank’s investment in TD Ameritrade contributed
earnings of $207 million for the year, 7% higher than the
previous year.
• Global Wealth had a record earnings year with net income of
$569 million. Despite the challenging economic environment,
all businesses experienced solid growth and delivered
strong results.
• Global Wealth assets under administration of $241 billion as at
October 31, 2011, increased by $16 billion, or 7%, compared with
October 31, 2010. Assets under management of $189 billion as at
October 31, 2011 increased by $6 billion, or 3%, compared with
October 31, 2010 primarily driven by net new client assets.
• The Canadian direct investing business increased their number
one market share position in Canada in both assets and trades.
In the U.K., our direct investing operation maintained the
number one market position, as ranked by trades per day.
• Our full-service and direct investing businesses ranked
number 2 among Canadian banks in the J.D. Power and
Associates customer satisfaction survey results for 2011.
• Our Advice businesses in Canada hit a milestone and exceeded
$100 billion in AUA despite volatile markets, clients continued
to choose to open new accounts with us increasing our
asset growth.
• TD Mutual Funds launched Target Return funds in September
2011, a first for the Canadian mutual fund industry. These
Funds take an outcome-based approach to investing by seek-
ing to provide three key benefits: 1) Potential protection
against inflation; 2) Opportunity for reduced volatility; and
3) Defined target return.
• TD Asset Management Inc. (TDAM), the manager of TD Mutual
Funds, was recognized at the Canadian Lipper Fund Awards.
TD Monthly Income Fund (Investor Series) was awarded for its
excellent performance over the past 10 years, and the TD U.S.
Mid-Cap Growth Fund (Investor Series) was awarded for both
its five-year and 10-year performance.
• TDAM launched two institutional low volatility funds. These
funds are differentiated in the marketplace as they seek to
provide equity market returns with lower volatility.
CHALLENGES IN 2011
• Assets under administration and assets under management
were negatively impacted in the second half of 2011 by
weakening global economic growth, sovereign debt issues
in Europe and U.S. debt ceiling negotiations.
• Low interest rates and economic uncertainty throughout the
year challenged revenue growth.
INDUSTRY PROFILE
TD Wealth Management operates in three geographic regions: Canada,
the U.S., and Europe. In Canada, the industry is extremely competitive
consisting of major banks, large insurance companies, and monoline
wealth organizations. TD has a leading market share in direct investing
and asset management, and a growing share of the advice-based busi-
nesses. Given the level of competition in Canada, success lies in our
ability to differentiate our client experience in our direct investing
business, and to provide investment solutions and advice to manage
our advised clients’ wealth accumulation, preservation and transition
to meet their needs.
In the U.S., the wealth management industry is large but fragmented,
consisting of banks, mutual fund companies, and discount brokers. In
our Maine-to-Florida footprint, the Bank competes against national and
regional banks, as well as brokerage companies.
In the U.K. and Europe, the industry is led by strong regional players
with little pan-European presence or brand. TD competes by providing
multi-currency and multi-exchange online direct investing services for
retail investors, and custody and clearing services for corporate clients.
OVERALL BUSINESS STRATEGY
Global Direct Investing
• Build on leadership through best-in-class service and intuitive
functionality.
North American Advice-based Business
• Provide comprehensive investment and wealth planning services
to deliver on pre-retiree and retiree clients’ needs in terms of the
preservation and transition of wealth.
• Continue to deepen the business referral relationship with personal
and commercial banking partners in Canada and the U.S.
• Focus on unique client segments by catering to their specific
investment needs.
Asset Management
• Deepen channel penetration, broaden institutional relationships,
and expand international equity capability.