Good day everyone and welcome to the TD Ameritrade Third Quarter Fiscal 2007 Earnings Results Conference Call. This call is being recorded. With us today are Chief Executive Officer, Mr. Joe Moglia; Chief Financial Officer, Mr. Bill Gerber; and Managing Director of Investor Relations, Communications, and Public Affairs, Mr. Bill Murray, Please go ahead, sir.

Good morning, everyone. Before we begin, let me just say that we appreciate your patience this morning. We had some unavoidable technical difficulties, we're all squared away and we are ready to go. Certainly by now, you've seen our press release, which was made public this morning. If you have not seen it you can go on to our website www.amtd.com. If you ha e copy of the release, as well as submit questions to us from there. Also on amtd.com is a copy of the presentation that we will be making this morning. So you can print it out to follow-on more easily. If you want to contact us after the conference call please call investor relations at 800-237-8692. I'd like to note that this call contains forward-looking statements that are made pursuant to Safe Harbor provisions of the Federal Securities Law. These statements involve risks, uncertainties and assumptions that may cause actual results to differ materially from those anticipated. Listeners are advised to review the risk factors contained in our most recent annual report on Form 10-K and quarterly report on 10-Q for a description of risks, uncertainties and assumptions related to the forward-looking statements. As a part of our presentation, TD management will discuss non-GAAP financial measures, such as operating margins, EBITDA and liquid assets. Listeners can find a reconciliation of these financial measures to the most comparable GAAP financial measures and other required disclosures in the slide presentation and on our website again at amtd.com. Call is intended for investors and analysts and may not be reproduced in the media, in whole or in part, without prior consent of TD Ameritrade. This time, I would like to turn the call over to TD Ameritrade CEO Joe Moglia, who will be followed by our CFO, Bill Gerber. Joe.

Thanks very much, Bill and good morning, everybody. It hits me that you know in this day and age whenever anybody in the industry postpones a meeting, postpones a call, postpones a session, whatever it is, the immediate rumors in the marketplace that are hot. There is something going on, there is a story, et cetera, et cetera. So it hit me this morning when we pushed our call back a half an hour, they made very well then an entire group out there that were thinking aha, they have something special to tell us. Don't mean to disappoint you on that, but I apologize about having to push the -- put the call back and as Bill had said, we appreciate your patience as far as that goes. So on with the actual call itself, we take a look at our first slide, we did have -- we've been around about 32 years now, we did have the best quarter in our history. We came in at $0.26, as far as our earning go and there were couple of reasons why we were ahead of our own midpoint. First as we're all aware there was greater retail activity over the span of the last couple of months than we had anticipated and then commission rates on average had gone up primarily because of the mix of business and what we've seen in our option business. Our net revenues came in also, it was a record of $542 million, that's 61% of those revenues are driven by our assets. Pre-tax income, another record at $255 million, our pre-tax margin at 47%, I had said for the last couple of years now, that when we get the integration behind us, going into 2008,we expect to be back above 50% pre-tax margins…

Okay. Thanks Joe. We had a historic quarter by completing the largest conversion ever in our industry and producing record results of $0.26 per share, which is up 13% or $0.03 per share over the same quarter last year. Our pre tax margin and return on equity continues to be a leader and not only in our industry but in the entire United States, finishing the quarter at 47% and 33% respectively. Our EBITDA was a record $304 million or 56% of revenues advancing our cash generation abilities. And our revenue stream remains stable as our asset-based revenues still account for approximately 61% of total revenues. Let's now turn to the actual June results as they compare to the same quarter last year on slide 8. Our net revenue was a record $542 million, up slightly from last year. Transaction revenue of $198 million decreased $15 million, mostly due to 8,000 lower trades per day, and the pricing change to $9.99 which occurred May 1, 2006. Trading activity was 245,000 trades per day or 3.9% activity rate versus last year's activity rate of 4.1% or 253,000 trades per day. Our average commission per trade for the quarter came in at $12.82 down $0.57 versus '06. The price change to $9.99 was the largest factor of this decrease, along with the lower priced fixed income products and higher promotional trades we discussed last quarter, also negatively impacted the rate. However, these were offset by a favorable mix which showed an increase in our options trades in our payment order flow of business. Asset-based revenue of $333 million increased $15 million almost entirely due to $12 billion increase in balances with over $3 billion coming from investable assets and $9 billion in money markets and mutual funds. Most of the $3 billion…

Thank you. (Operator Instructions) We will go first to Mike Vinciquerra with BMO Capital Markets.

Thank you. Good morning, guys.

Good morning, Mike.

Joe, can we talk about the accelerated stand here, can you give us a sense where -- do you know the first round of spending are you going -- obviously you told us last time that your senior management was going to come to you and give you their proposals for where they want to spend. Where are you seeing the first opportunities, and why the acceleration right now?

Yeah, well, Mike when we talked about this you know, we talked about a $100 million spend, and frankly the sooner we implement that spend, we think the sooner that we are going to get results. So, the management team has come to me with individual requests; I have allocated probably 85% or 90% of that so far. You should assume all $100 million dollars is absolutely going to be allocated for 2008. And wherever we had approvals, we began to make those investments right away. The vast majority of those investments early on are in the sales force and greater support in the call centers.

And across the various product areas, RIA is your core business, is there anything specifically being focused on?

We know, it would be across the respective client end segments, but I think the greatest emphasis is in the areas where we think we can openly gather assets.

Okay, fair enough. Thank you. And then is there any financial impact you can provide for us on the five serve deal in terms of rough revenue contribution because you are buying most of that organization, but there is a piece that’s going to another buyer, and I don’t know what the pre-tax margins are going to be on the piece that you are buying. Anything you can provide there will be helpful?

I think, we are going to close that beyond a million of asset. We are going to close that deal over the span of next 3-5 months and I am glad to give you whatever we can disclose. Geb, what do we have there?

Some $60 million of revenues.

$60 million of revenues. We have already said that, right?

And about a $40 million of expenses.

Okay, Mike?

Sure, and I would assume that you have plenty of synergy with your current business that you presume that you are going to increase that pre-tax margin?

We certainly ought to.

And then just one last question on, you spend some balance of about the 12B-1 fees and the potential that some people are pushing for a reduction there. Obviously, that would be a wind in your face in terms of growing your asset management business and growing your mutual fund side. Any comments on how that might impact you if something comes through?

What I think, you know, right now I don’t think it’s going to be that much of an issue for us. I think the way pricing takes place in the industry can adjust overtime anyway, and today the 12B-1 fees are rather a really small piece of what we do, and as we look at how we want to gather assets, while certainly we need to be able to be in the middle of a mutual fund business with regards to offering products etcetera. We are going to be looking at other things, our own index funds, GPS etcetera, etcetera. So, right now that will not have much of an impact on us. If that indeed happens, you know, I think the path that we are taking anyway may very well be a little bit more away from mutual funds any how.

Okay. Thank you very much

Thanks Mike.

We will take our next question from Rich Repetto with Sandler O'Neill.

Good morning Joe.

Hi Rich.

First question, a little bit more on the incremental, the investment spend.

Yes.

So the chart or the slide depicts it as -- is it a one time $20 million in the fourth fiscal quarter or is that something that's you know it's just for the sales force, is it safe to say that, you have spent $20 million in fiscal 4Q that's going to be $80 million next year?

Yeah, you should assume it's going to be $80 million next year. So the way to approach it that these are not meant to be one-time spend, they are meant to be permanent investment, you know one of our ongoing effort is be able to generate greater revenues, so again if you think in terms of $100 million incremental spent for 2008, you will be covered on that, but that's just not go away in 2009.

Okay. And then Joe I am just trying to get the benefit, any color or info on -- on what the payback on that, now that you've had been a little more time to look at it?

Yeah, well the entire objective Rich, is going to be trying to help us become a greater asset gatherer. So by having more people in our sales force, by being able to provide great -- as a transaction oriented firm over the years, one of the things you wanted to do in the call center, somebody will call frankly, you wanted to get off the phone reasonable quickly in order to be able to solve the client's issue or problem, you can't get off the phone reasonably quickly now, if indeed that's exactly what we are trying to do which it is. So consequently calls themselves, in the call center for example, take more time. So we need more personnel in the call center. You already know that we are in the midst of either or already rolling out or going to be rolling out more of long term oriented products. So is very simply in the bond arena, the ability to do bond online, very, very simple, easy, and the ability to be able to scale that, to be able to do your own bond ladder. We are going create a bond wizard, et cetera. Those are all some of things in effect that we are trying to do to kind of enhance our capability in the long-term investors' space.

I guess, my question regards to then, on the $20 million that turns into $80 million, when you spread it out over year, is it just a sort of sustain the revenue outlook that's current right now or does it, for example bring in at the margin 50%, does it bring in $160 million in additional revenue next year or does…?

Yeah, I think, we are hopeful, certainly that's it going to bring in additional revenue next year. We're going to give you more detail on that in October. But it is also meant to protect the assets we have. So if indeed we lose a client, because we haven't had a long-term offering, but this does a better job of protecting what we already have, as well as helps us to attract new assets. It does both of those.

Okay. And then, I guess, the last thing. This wouldn't be myself, if I didn't asked about, so you've restructured the independent or you have the independent committee to evaluation the strategic alternatives. I guess, the question is, can you give me any insight on what they're doing now, are they meeting with other companies, are they being contacted, are they reaching out to investors or what exactly , because, I hear your deliberate comments, I'm just trying to see, what going on behind the scenes here?

So you're interested in kind of, like the less than deliberate comments. Inside of the secret, inside info. You know Rich, as you know, and as you all know, M&A is something that literally we work at all the time. So to have M&A committee that can assist us in that, help monitor that, help have provide us with ideas as far as that goes. I do believe is a smart and a valuable thing. With all the things going on in the industry we have already said that, you should assume that we are talking to and we'll continue to talk to any player that exist in the industry. Now anything specific with regards to the M&A committee, as far as the discussions with anybody et cetera, et cetera, I wouldn't be able to disclose that anyhow. But again, as part of standard operating procedure, you should assume that the management and the M&A committee is involved with stuff that we've got going on.

Okay. I'll leave it that, that's very helpful Joe. Thanks.

Okay Rich.

We go next to Prashant Bhatia with Citigroup.

Hello.

Hi Prashant.

Now that the integration is done, can you give us a feel for how much attrition you had -- rough numbers in terms of the assets or may be in terms of qualified accounts?

Yeah, I think in terms of the goal-specific -- what's our -- what was that specific, I want to double check on this specific attrition rate for the quarter?

It was under 4 for the attrition rate for the quarter.

Okay that was under 4% for the quarter, and if you recall, when we regionally set this up, we had said that, we assume to 5% attrition rate for our loan accounts. I think we assumed to 7.5% or was it 10%? The 7.5% attrition rate for the TD Waterhouse accounts. So 4% for the quarter that's probably a little higher than what it was and you would expect that to be a little higher, as you are going through the actual conversion and the period subsequent to the conversion. So, if attrition is going to kick up, I would expect that to -- we have already started to see that probably a little bit and I would expect that probably it will continue for a little while until it is early down. But our ultimate goal was to be or have better than 95% retention. We are certainly at 96% plus and we are pleased with that. But now would be the time, into the last couple of months or the next couple of months, we would see it kicked up in the attrition.

Okay, great. And then, you have got a model that doesn't have a lot of credit risk, doesn't have a lot of rate risk. It is not that capital intensive. I guess, if you focus more on the asset gathering side of it, do you see an opportunity there to may be better service the customers that you have by taking more of rate or credit risk?

Yeah, I don't think we would be overly aggressive trying to take too much interest rate risk or too much credit risk. Having said that, we are very conservative and if we think that something on a risk reward basis winds up making sense, we don't have a problem taking a look at that ourselves Prashant. So, we are in the process, we are just evaluating that now.

Okay great. And then finally, on the client cash you have been growing, it looks like roughly about a $1 billion a quarter. Looking at kind of the outlook going forward, I think, just more flat on that. Is there something that you are seeing in terms of customer behavior or is that just may be being a little conservative on your part?

That's being a little more conservative, Prashant.

Okay. Great. Thank you.

Thanks Prashant.

We'll go next to Michael Hecht from the Banc of America.

Guys, I am on the phone. I am here. Hi guys.

Okay. Alright.

How are you doing?

Great. How are you doing?

Good. So, just a couple of questions on the incremental investments stand, I mean, can you give us on how in terms of how we should be thinking about measuring the progress, you are showing in about the gathering kind of penetrating the long-term investment stationing, do you have any data that show as form kind of overall flows and things you give us more kind of data and help on going forward?

Yeah, I think Michael in terms of, I think, which you need to be able to look at our assets, I mean, that's what we are trying to do, we are trying to grow our assets. And then as you might breakdown the assets, you look, I would look at assets per take per client or per count. I mean that would probably be the most simple measurement, as far as that goes. Now, I know a lot of times, I get a lot of request with regards to, well, can you breakdown the $100 million and you know what kind of role, why do you expect on a $100 million. We think that all the $100 million are smart well thought out of investments and things that frankly may be we should have already been doing or certainly should be doing now. You know and at the end of the day, I don't know, if we've got to, I don't want to create too many assumptions, but when you look at what we are trying to do, we are trying to gather assets and I think you just keep continue to keep an eye on how we are doing as far as the asset side of our revenue base goes and what that looks like on a per capita basis and you are probably having a good indication as we, well, in terms of we do not have to work. And I am hoping that sometime in 2008, we start to feel in you will start to see that we are actually getting a little bit of a foothold in this arena. But I think what we start to gain some attraction I think the upside becomes pretty significant.

Okay. That's helpful. And then just give me a little more color on the investment spent in the comp, I am looking if you give me color on, it sounds like you are looking to add more people but any commentary on what you are looking to do it in terms of looking at higher or increase in the quality of person or training of person and are you looking at potentially tweaking compensation model and may be make it more variable that actually motivate your sales people or actually sell for some sort of incentive comp?

The majority of our compensation today might for our sales people tends to be variable and the reality is we kind of look at compensation all the time. So, since compensation is probably the one number factor in helping determine the behavior of our associates. Frankly, the analysis of how we do that is something that it is discussed and looked at on pretty regular basis. So, we are doing that, we will continue to do. We will continue to invest money in training and we feel pretty good about the quality of the sales force that we have today. We don't think we have enough. So that's the approach. As far as the individual branches, if you recall, when we did the Waterhouse deal, we inherited about 145 or so. We eliminated assets that we thought we are not particularly productive. So, we don't necessarily feel we've to add branches, although we won't hesitate to do that if we think it makes sense. But to add sales, both on a national basis, or again our Call Centers as well as in branches we'll be, what we will be doing.

Okay. So, really just adding more people, no changes to model or anything like that?

I don't think you need to change the models, but you asked about are we looking at changes in comp, and yeah, we do.

Okay. I got you. And then, just I wanted to come back on the Fiserv. Just want to trying to give a sense, I mean, is this the something which you think about is strengthening your position in the RIA business? And then, just as a housekeeping item, where did you RIA assets end in the quarter and how is that compared to the last quarter? I think the last data point ad was 55 billion?

Yeah. We don't disclose that throughout the span of the year, is that? I am looking at my team, is that correct? We don't disclose at the span of the year, we usually give you an update where that stands on annual basis. So, we'll do that more in October. I think though, we did disclose with regards the Fiserv, that what was our buying as, $28 billion in assets.

Okay. And then…I am sorry.

Michael I will add there a point, you said, $57 billion, it was $70 billion. It was a lot better than the point we gave so.

Now is that one?

That was in the end of the fiscal year.

Okay. Thanks for your time.

And you should assume we should be at $100 billion or so. Let me give you a little bit more color on that year end.

Okay, one other question, any updates on Amerivest and any traction you are seeing there?

Yeah we are actually, it's still -- it's not big enough to break out or talk about from that prospective, but the key to Amerivest in the past, if you recall, was while we would try to market it, there were too many questions associated with it. For example, what does diversification mean? What does it means to rebalance? So it does require a little bit of an educational sales call. So, now that the sales force is on one platform we have actually seen a very nice pick up in interest and business associated with Amerivest, and in our product area with Dave Kelley and his team, we continue to try to frankly expand and improve the whole of Amerivest content. So, the ability to provide portfolio allocation services, not just through EPS, but of course a number of investment products has also stopped that they were playing and working within. I still think that Amerivest could very well be a differentiator product, and we are starting to feel good about the traction that we are seeing.

And Michael, this is Bill, one last to add a there a point it was that $70 billion was as of March, starting out as of September, so the March '07.

Okay, okay that great. Bill, I am sorry, this is really the last question. Just on tax rate, you mentioned the State tax that has just lowered a little bit this quarter, and any thoughts on the Q4 rate which we will be using, should be using may be the 37.5 you had this quarter or the year-to-date rate, 38.5 any thoughts?

We are still looking at 38% to 39%. I think there is going to be of a lot of these things coming through unfortunately on a regular basis, and I think what's spent for you are going to see a lot of more of this going forward, but right now we’ll still say 38% to 39%.

Okay. Cool. Thanks guys.

We will go next to William Tanona with Goldman Sachs

Hey, good morning, guys.

Good morning, Bill.

Just a couple of quick ones here. You know, going back to your investment spends, it was a pretty big jump and if you think about it, you get to about 80% of what you thought you are going to spend. Any thoughts about possibly even pushing that higher or is that kind of a hard and set rule of what you are willing to invest near term?

Bill, no I wouldn’t say it’s a hard and set rule, but I would like to see the results for the $100 million first. So our management team, we would have got problems figuring out a way to get that higher, but I think we have been very thoughtful about where we are going to allocate the $100 million, and I think we got to see some results from the $100 million. If that $100 million really started to pay off and we have found certain areas we would be really getting a tremendous return from, we would not hesitate increasing those areas. By the same token, we found that there were some areas of spend that weren’t doing as well. We would look at being able to shut that down or reallocate some place else. So bottom line is, don’t assume an increase in the $100 million, but we would do that if we thought that made cash. But, right now, I think we have got to see the results of the $100 million first.

Okay. And then how much timeframe do you think you would give before you kind of make those types of decisions?

Over the span of next 12 months.

Right. And then, as you guys talked about guidance for next year, did that kind of guidance include the FISERV acquisition or was that excluding the FISERV acquisition?

It should include the FISERV acquisition.

Okay. And then again --

But again, more details on October.

Sure. Okay. And then last question on attrition. We talked a little bit about overall attrition, but could you kind of talk about what you are seeing specifically in the RIA business. And particularly what the attrition rate might have been since doing the deal with Waterhouse?

The attrition in RIA, we don’t break that out specifically, but the attrition in the RIA business has always been, I mean, very, very retention in the RIA business has always been very good. Now, when I talk about some of the -- so when the question was asked thoroughly about what’s going as far as the attrition rate now goes, and I said at the time you are going to see most of the attrition is literally when you first close the deal, and then its through the entire clearing conversion. So, while that has just taken place, the impact that is going to have hangs around for another quarter or so. The impact of that has upon our clients on a direct basis, our long-terms investors and our active traders that also then would have the same type of impact as seen on our RIAs. So any of the headaches that pop up from post-clearing conversion issues will be something that everybody in affect will have to go through. But the retention that we have seen in general across the board has been very good, and it’s been very good in the RIA space. But I think, if we see a spike or we see another issue, it’s going to be like over the span in the next quarter or so.

Okay. Great. Thanks.

Thank you, Bill.

We will go to Matthew Fischer with Deutsche Bank.

Good morning.

Hi, Matt.

First question also just to get back on the expense investment for growth. The 20 million, the increase in 10 million, is that, is the increase compensation related or is the full $20 million compensation related?

No I think a piece of that, the bulk of that is compensation related.

Okay.

Another portion of that would be for personal services, as we are hiring technology people to help with product development; but the vast majority of it is comp.

Okay, that’s the vast majority of the 20 million?

Yes.

Okay. So, then I guess about going forward about 80 million or in that range is of the $100 million is compensation, these are, I guess, so the other 20 million is for products and those type of things?

You know Matt I think, you're probably trying to fine tune into a little bit too much. Right now, the initial part of the spend tends to be for bringing more people on board to help us in our assets gathering effort.

Right.

There are, I mean, $100 million gets broken down a lot of the ways and I would say, a big piece of that is related to compensation adding people, adding professionals, et cetera. But now, we're not going to fine tune or breakout. We want you to always know where that $100 million stands, but we are not going to breakout the details behind the $100 million. But suffice it to say that those are the areas that we're using in it.

Okay. It sounds like you down through, I mean, it does seems like you would maybe need to get dig a lot deeper if and when you start to develop these new products?

Well, that is what we are doing.

Right. The other thing, I guess, you've mentioned some of the metrics that you used in kind of measuring your progress within the long-term investor state, if you could go, maybe run through with that a bit more, if possible?

Okay. If you look at how we generate our revenues, okay, you look at the first part of this transaction, what we are getting with regards to commissions et cetera, et cetera. And then, the second part of that is what's generator of the asset piece. When you look at the assets, we kind of break it down, I think you should still look into kind of two components you've got your net interest margin. We are just part of the way, we have always made money. That's also how we handle our relation with TD as far as our overall banking strategy with how we manage our risk on the yield curve and how we help manage to balance sheet with our client assets. And then you've got the other piece, how do you generate these, mutual funds, and money markets funds, what happens, what else then happens with things like our portfolio services, new products that we come up with. So, you've got fees that are generated, because of your assets away from net interest margin and how you have broken down that way that sort of the way we broken it down. But at the end of the day it comes down to what extent, are you doing a better job of not just growing assets but to growing more assets under management that are generating internal fees for us.

Okay. And then, I guess to tough on the asset growth, your 5% sequential in total client assets, how much of that, could you break that how much is net new assets? And how much is market appreciation?

Okay. We don't break that number out, now we've had people to ask us, they consider whether I would come up with the net new asset number and we have committed to that yet. But it is something that's on the table.

As they had accelerated since you began this first towards the long-term investor?

As our asset growth accelerated?

Well, the net new asset, the organic growth.

The answer is yes.

Okay. I guess, we not yet willing to kind of quantify?

That's what I just said.

Right. Okay. Thank you very much.

Alright. Thanks Matt.

We will go next to Roger Freeman with Lehman Brothers.

Hi, good morning.

Hi Roger.

I wanted to ask you just may be some commentary on what you are seeing in the retail environment in general? There been a few months including June that have been somewhat disappointing from DARTs perspective , and I am wondering if there is any possibility that consumers in -- as they are getting stress with the housing down turn have the less available cash put into the market. Do you have any sense what there might be going on?

Yeah, we have not seen that yet. I think it's important to remember Roger that the retail investor is a lagging indicator in terms of what's going on.

Right.

But the fact that we are seeing the market it is directed highs. In fact that we've seen really good market performance on an international basis. All those things tend to bring the retail investor into the equation. Now, the fact that they are involved, and I would suggest that they are bullish, does not mean that they are irrationally exuberant. So, when you look at something like co-inflation while that might be in check, actual inflation is up over 5% year-to-date. Now for an individual, that each of an individual that drives a car they feel that, and that would be part of I think of what happens to the retail sentiment across the United Sates. So, the markets are doing well, they have a comfortable level on that, but they are not wildly bullish and they are not totally involved.

Okay. So you think some of the inflationary head wins are offsetting the way they are looking at their market entities setting new levels and maybe not just rushing for the money?

The answer is yes. But for the reason I am giving you, its not just because they say, oh, inflation is up over 5%, if that’s up over 5% number it does translate into what they are paying for heating, what they are paying for fuel, what they are paying for the gas, what they are paying for the daily groceries, and I think that does have a psychological impact.

Okay. That’s helpful. I wanted to ask you just to follow up on the Amerivest comment, can you say how much of planned assets are in this product yet, or will you be able to disclose that for us at some point, so that we can sort of track how it is?

Yeah, I don't know if we are going to disclose it at some point, but we are not going to disclose it now.

Okay. That’s easy. And then there is a last question just around the pricing, some of the moving parts there. Two questions, one is, has payment for auto flow been increasing from the market makers that you spent flow to, and secondly how much has, have options being growing inside the mix. Can you maybe quantify what option versus equities is in your credit mix?

Yes. First, as far as, payment for the flow has been remarkably stable I think over the span of probably the last couple of years. And sometimes it want to kind of goes up and you will see it kind of go down another time but for the most products it's been relatively stable. The payment for the flow with regards to the options continues to be a reasonable piece of that and that continues to be reasonably substantial. Now with a movement toward penny pricing with regards to options we would probably see a tightening of payment for the flow there, but then you would also probably see a corresponding increase in volume. So for the time being payment for the flow is not material enough for us to break it out. But it has been remarkably consistent let's say over the span of the last couple of years, although the mix has shifted a little bit away from equities to options over the span of last couple of years.

Okay and then just in terms of overall options trading because that has a positive mix -- a positive impact on the pricing mix of the rates are higher. How has that been trending and what percentage is the option of trading volume?

Yeah. Options are now about 10% of our trading volume and represents about the lower 20% of our commission.

Alright. Has that changed much since say the end of last year?

It's been creeping up, you know it's been 8 to 20, but it's been trending more toward 10.

Got it. Okay, thanks a lot.

Thanks Roger.

We go next to Matt Snowling with Friedman, Billings and Ramsey.

Yeah, good morning.

Hi Matt.

I hate to beat dead horse on this investment spend, but you mentioned that building of your call center support and that, and whether it's 100 million or something south of that seems like a pretty high number. call center, I am wondering if it's more about hiring more seasoned brokers on the branch level?

Yeah I'd say Matt, it's a combination -- I think, and I obviously do a lot of questions on the $100 million spend and I recognize it, look everybody likes to get much more specificity with regards to granularity on that. But we are not spending a $100 million on the call center. A piece of the $100 million goes for greater call center support and greater education for the call center. Remember, one other thing we said that we want to able to do is, our call centers have predominantly only been service centers. And part of what we want to transition is the sales element within the call center. So, in the past, whatever I could do to kind of help you and solve your problem, today, we might very well start asking the question, were you comfortable with your retirement or have you had a chance to take a took at ABC. That doesn’t happen overnight, that requires probably a pilot program and some education. That requires some cost to it. Away from that, you’ve got sales taking place in the branches. Away from that, you’ve kind of a virtual sales effect that takes place on a national basis, within our own call center and within our core call center. Then you have got, we know what kind of products we want to get out of the door. We want a little bit more help trying to get those products out the door. And as you start to add up all of these things and you can get to the $100 million reasonably quickly. But as I said, there was discipline associated with that, where every individual that we made the request for is on the hook for delivering on that and had to be specifically approved by me. So, and that’s basically, wherein how we’re using the $100 million. So, when we say the bulk of it is kind of more of people,. It’s more people for those reasons. It’s not like, its all in the call center.

One of my questions I guess is, you were going out looking for seasoned brokers, with existing books.

Yeah. The answer is we are not going as far as looking for seasoned brokers with existing books, because our sales model is going to be different than what a lot of those others are. We handle that through our RIA business. So, the seasoned brokers with existing books are frankly more of candidates for our RIA sector, than they are for our normal sales forces. So the sales force we have, we feel pretty good with, we want be able add to that, those seasoned brokers are candidates for our RIA business.

Thanks.

And we will take our last question from Mike Carrier with UBS.

Thanks, guys. Good morning. Just one more question on -- just on the investment spend, and not on the investment spend but more on the return, just wanted to know where are these -- one of your line managers comes to you, and you ask her some of this money, is the focus more on increasing the assets in the current accounts, meaning on the MMVA side or the mutual funds side? Or is it more on the side of brining in some of those qualified accounts, or is it -- can you kind of break that down, so we kind of get a sense of how the model should be working as we kind of increase the investment spent?

You know, I think we would literally try to do both of those. We have talked in the past that the three objectives here are growth, retention and yield. So as we roll out cash management products, we become, as we do a better job and manage our own client asset as far as the balance sheet goes from a banking strategy prospective, we should be able generate far greater yield from the clients that we currently have then we have had up until now. I think everybody knows while we do the best majority of our clients trades, we don't have the majority of their assets. So that gives us an opportunity to gain greater share of wealth which is very, very important for us. Well just being able to do that also makes us I think more attractive from an acquisition perspective to bring more clients in the door. So as we look at this, it is literally a matter, it's this simple, and it gets complex a little bit behind us, but you are either asking for incremental funds because you were trying to figure out a way to bring more assets in the door, or you want to do a better job of retaining the assets we currently have, or you want to do better job of generating greater yield on the assets that we already have. And all that would exist throughout the entire organization, so as people come in they'll say, I think I want to use this amount of money and I think this is going to be the benefit etcetera, etcetera. But we need to cover both of those. Now breaking that down or fine tuning it with regards to percentage we are not going to disclose that, but that would be how we look at that.

And Michael, this is Bill, and you were the last questioner today because unfortunately with the time -- the late time start we have to end it but, so do you have anything else to answer?

Yeah and just on the qualify accounts, do have any kind of -- any more color in terms of what the revenues are for those accounts versus the total accounts, if we assume that some of that money is going to bring in the higher revenue generating account and we can follow that?

You know, when we first started to talk about qualified accounts we said that this is about 50% of our client base, and they account for about 90% of whatever ultimate revenues and profitability are. I think it’s fair to say that, that is all probably the same. So, well we haven't seen a significant increase in the qualified account numbers themselves the quality of the business generated as our world business has grown from the qualified account has been good.

Okay. And then just finally on the expenses, could you just go over some of the noise that was in the quarter?

Sure. The, it’s a noise but 8 million of expenses were for the investment, for growth, and most of that was in the sales force to better serve the clients, $3 million was for severance, $6 million was from increased incentive accruals. So, all of those were in compensation. And then there was a positive $4 million settlement with the exchanges regarding a communication “issue: on the Legacy TD side?

Okay. Thanks a lot.

Okay. And thanks again everybody today and if you have any further questions, please feel free to call the Investors Relations Group, and we will get back to you as soon as we can. Thanks everyone. Thanks folks.

That does conclude today's conference. You may disconnect at this time.