TD Ameritrade said quarterly profit climbed 5.5 percent on a jump in net new assets, and forecast further asset growth of 7 to 11 percent in 2015, sending shares up 3 percent in morning trading.
The company said Tuesday it had enough extra cash to increase its quarterly dividend to 15 cents per share this fiscal year from 12 cents, despite spending heavily on new technology in the past year—on mobile applications and other ways to improve clients' trading experience.
The biggest U.S. discount broker as measured by client trades—which is 40.7 percent owned by Canada's Toronto-Dominion Bank—said net new assets rose 32.7 percent to $13.4 billion in its fiscal fourth quarter from a year earlier.
It forecast further growth in assets of 7 to 11 percent in fiscal 2015. More than half of the company's asset growth, which creates higher fee revenue, comes from independent investment advisers who direct their clients to TD Ameritrade for products, trading and custody of their money.
"With improved investor sentiment, retail investors returned to the markets in 2014, increasing engagement across our platforms and boosting trading volumes," Chief Executive Fred Tomczyk said in a statement on Tuesday.
TD Ameritrade's net income rose to $211 million, or 38 cents per share, for the fourth quarter ended Sept. 30, from $200 million, or 36 cents per share a year earlier.
The company's profit beat the average analyst estimate of 36 cents per share, according to Thomson Reuters I/B/E/S.
Shares of TD Ameritrade were up $1.03, more than 3 percent, in morning trading.
The company's net revenue grew 12 percent to $795 million.
TD Ameritrade forecast earnings for its next fiscal year of $1.45 cents to $1.70 cents per share, putting the midpoint below analysts' average estimate of $1.61 per share.
Daily average client trades rose to 402,638 in the quarter from 381,657 in the same quarter last year. An increasing number of trades come from higher-commission options and futures trading, which represented a record 41 percent of daily trades at the brokerage firm.
Derivatives trading boosted the firm's average commission to $12.97 per trade, up from $12.61 in the year-earlier quarter and well above the $9.99 price of an online stock trade.
On a conference call with analysts and investors, TD Ameritrade Chief Executive Fred Tomczyk said the company has no plans at this time to introduce an automated investing platform similar to the one unveiled on Monday by rival Charles Schwab Corp. Schwab said its platform will go live in February and not charge advisory or transaction fees.
"Purely online models will struggle to (achieve) scale," Tomczyk said, adding that firms must combine automated investing with human advice to achieve profits. "If we need to make adjustments, we will, but right now it's full steam ahead."
The company's shares over the past 12 months have gained 15.9 percent, including reinvested dividends. (Get the latest quote here.)