Key questions and answers from the first quarter fiscal 2009 earnings call conducted by TD AMERITRADE Holding Corp. (AMTD: chart) on January 20, 2009.

Howard Chen (Credit Suisse): Could you provide an update on where your thoughts are for the breakaway broker opportunities and where RIA assets stand today?

Fredric J. Tomczyk: RIA assets currently stand about 30% of our total assets. We're happy with how our RIA business is doing. As we said last year, it was one of our more challenging years but we're quite happy with the start to 2009.
Having said that, on the breakaway broker market there's two things going on. Number one, we're seeing sales activity and the number of people we're talking to at a very high level with all the dislocation going on at the full-service brokerage organizations. However, I would say that the close rate on those sales activities are probably also at the other end of the spectrum at a low end.
There are lots of brokers right now that are getting - if you were a full-service broker today and your revenues were down significantly and your clients were feeling like the way they probably are, you'd be asking yourself, ""Do I take the retention payment where I am or at another full-service broker or is this really the kind of market - do I want to step out and put my own money up?"" A lot of them are hesitating and it wouldn't surprise me to see that part of the market pull back a bit here for awhile.
That's not to say that the long-term trends will fundamentally change. I think it will go back to the breakaway broker is very attractive. We could see a bit of a lull here for a period of time because of the current market environment and their views.

Howard Chen (Credit Suisse): In the revised outlook statement, specifically for the average fee-based rate earned and the step down assumed in the forward outlook, are you now baking in any money market fee waivers and what's driving that decline?

William J. Gerber: We are baking in money market fee waivers. We're expecting that the interest rate environment is going to continue and that we would waive to keep our clients at zero, so yes, that's built in.

Richard Repetto (Sandler O'Neill & Partners L.P.): Could you give more specifics on the net new assets?

Fredric J. Tomczyk: We do think there are a couple of things going on. If you look at it year-over-year, we have said that we're quite happy with how our retail business has been doing and that continues. On that side, we continue to see very good asset retention and client retention. You've seen the new account numbers. That definitely contributes. Our new accounts are up 49% year-over-year. We're quite happy on the retail side.
What we've seen year-over-year is last year wasn't our best year in the RIA business in the wake of the Waterhouse conversion. We've talked about that before. It took us awhile to earn back our credibility in the market; we think we've done that. That's starting to show up in some of our numbers.

Richard Repetto (Sandler O'Neill & Partners L.P.): Are you seeing more because of the turmoil at the larger brokers or the smaller brokers?

Fredric J. Tomczyk: Turmoil at the larger brokers is probably the number one contributor. Your comment at the last quarter was it was the first time in our history when we increased advertising in the fourth quarter, and that really did pay off as we hit it just right to take advantage of the dislocation in the market. We were clearly there and very active during October and November.

Richard Repetto (Sandler O'Neill & Partners L.P.): On the expenses, you're talking about trying to take out $60 million run rate and if you look at your guidance and the midpoint, it looks like you're baking in around $ million to $40 million in the year. Can you give detail on the timing of these expenses takeouts?

William J. Gerber: You're right. Rich. About two-thirds of it will hit in 2009 and then the run rate would be in full effect by 2010.

Richard Repetto (Sandler O'Neill & Partners L.P.): Schwab's got $30 plus billion in the Treasury money market. Can you tell us how much is in the funds and what's the yield?

William J. Gerber: A lot of the funds are very low. We have about $30 billion in total money market funds and the vast majority of those have yields in the single digits.

Patrick O'Shaughnessy (Raymond James): Could you provide some updates on some of your asset gathering plans, specifically some of the things that you're trying to do at TD Bank to better work the relationship that you have?

Fredric J. Tomczyk: We talked about three areas that we're working with TD Bank. Number one was us originating more accounts and assets out of their customer base and branch network. Number two is increasing the breadth and depth of our banking-type products to our customer base. Three was working with TD Waterhouse in the U.K.
The reality is that all those are at very early stages. They're really not impacting our asset gathering numbers as of yet. I'd say the last one, the one with TD Waterhouse U.K. is probably moving along the quickest because that clearly is a win-win for both organizations. The other two, because our partners at TD Bank USA are in the midst of a significant conversion, that is their top priority and ought to be their top priority. On that one, until they get through that, which will be September, we will continue to pilot different programs but not really get at it in real earnest and have any impact on us until probably 2010 fiscal.

Daniel Harris (Goldman Sachs): Can you talk about the change in the commission rate that you have in the new outlook versus the old one? Do you expect the level of free trades and sort of a lower percentage of option trades to continue over the next few quarters?

William J. Gerber: Not really. We're expecting that to revert back to the mean. We think that the options trading, particularly the volatility was so high this last quarter that options became fairly expensive and so as that volatility moves back we would expect to see more options trades. The free trades, as we mentioned, the 217,000, was the second-best quarter in our history, only exceeded by one back in March of 2000 and so we would expect to see free trades probably abate as well.
Right now we're expecting a range of right around $13.25 for the midpoint for the commission for the year or for the next nine months.

Daniel Harris (Goldman Sachs): With regards to the outlook statement and expenses, you've got revenues down 12% or so on average and advertising down 3%. Is the thought here continue to spend at a similar level and hopefully take more market share or is that just not something that you had anticipated lowering at all anyway?

Fredric J. Tomczyk: Our view on marketing, at $215 per account to $300 an account, if we can continue to do that and get the new account flows and share of wallet lifts that we are seeing, we'll continue to make those investments through this cycle.

Daniel Harris (Goldman Sachs): Is there any reason why you couldn't repurchase debt other than the fact that you'd like to hold more cash right now?