Wealth Management

Financial results of key product segments within Wealth Management

TD Waterhouse discount brokerage is a leader in self-directed investing, serving customers in Canada, the United States and the United Kingdom. Significant events during the year included:

• The restructuring of the International operations, including the sale of TD Waterhouse Australia and write downs and restructuring provisions totaling $339 million, have positioned TD Waterhouse International to achieve at least breakeven results for 2004.
• Fluctuating trade volumes due to world events and investor uncertainty resulted in continued revenue challenges into the middle of 2003. Increased market activity and investor confidence in the second half of the year generated improved results.
• A significant reduction in the cost basis of operations allowed us to lower the breakeven point and position ourselves to quickly realize the benefits of market improvements.

Revenue decreased by $13 million or 1%, including $39 million related to the joint venture write downs. While global trading volumes decreased from the prior year, an increase in trading activity in North America and higher fee based revenue in all markets contributed to offset the decline in revenue due to foreign exchange and the reduction in revenue from the sale of TD Waterhouse Australia. Expenses increased $149 million or 11%, including the $300 million of restructuring expenses and goodwill impairment charges. The remaining expenses declined due to cost cutting initiatives, the impact of the sale of TD Waterhouse Australia, and the foreign exchange effect on U.S. dollar results.

TD Mutual Funds is the seventh largest mutual fund family in Canada with $31 billion in AUM at October 31, 2003. Although difficult markets in the first part of the year hampered sales activity and AUM growth, the improvement in the capital markets in the second half of the year contributed to the 7% or $13 million increase in year-over-year revenue. Expenses decreased $9 million due to a focus on cost control.

TD Private Client Group includes trust services, private banking and Private Investment Counsel. Despite increases in customer assets, revenues decreased by 3% or $4 million, to $152 million in 2003 primarily due to declines in Estate and Trusts and Private Investment Counsel. Cost control resulted in an $11 million reduction in expenses in Private Client Group businesses.

TD Asset Management is recognized as one of the largest quantitative managers in the country. Services provided include investment management to pension funds, corporations, institutions, endowments and foundations. Despite the challenging market environment, revenues improved $2 million or 2% in 2003.

TD Waterhouse Investment Advice provides full-service brokerage services to its retail customers throughout Canada. Although fiscal 2003 represented a challenging environment for the business, we continued to grow our sales force and AUA, resulting in revenue growth of $5 million. As a result of efforts to improve our competitive position, expenses increased by $45 million or 21% in 2003.

TD Waterhouse Financial Planning continues to aggressively grow its front-line salesforce and invest in a comprehensive technology platform. As a result, revenues increased $11 million in 2003.

 

Wealth Management