The three-year anniversary of TFSAs saw the popular savings vechicle reach 1.6 million accounts in the retail brokerage channels, or a 15% share of all retail brokerage accounts as of March 2012. Over the past three years TFSAs have amassed nearly $18 billion in retail brokerage assets. TFSAs represent one fifth of total accounts and 3% of the online/discount brokerage (ODB) channel assets; compared to 12% of total accounts and 1% of assets of clients of the full-service brokerage (FSB) channel.
Notably, TFSA share of total accounts has increased in each successive quarter since inception – in both channels. Since their launch in the first quarter of 2009, TFSAs have also accounted for 83% and 80% of all net new account openings in the ODB and FSB channels, respectively. TFSAs strong growth momentum in the brokerage channels has continued in 2012, easily outpacing the account and asset growth of other account types in both channels.
The rapid expansion in the TFSAs in the retail brokerage channels begs the question: Is there still room to grow? TFSAs have certainly become the “go-to” account for self-reliant investors (please see the special research feature “Online/discount brokerage: Guided by the evolution of self-reliance” http://investoreconomics.com/issue/retail-brokerage-fall-2011-quarterly-report in the Fall 2011 issue of the Retail Brokerage and Distribution Advisory Service). Yet, as of March 2012, the average online brokerage TFSA account size was $8,500, or roughly 43% of the now-$20,000 TFSA contribution room. At $14,800, the average TFSA account size in full-service brokerage is a higher 74%, suggesting both a more efficient use of the vehicle by advisors and the higher-end profile of the FSB clientele. Thus, despite already having made an impact on the retail brokerage industry, the average TFSA account size suggests further inroads are possible, particularly in the ODB channel.
For more information and up-to-date statistics on retail brokerage channels, please refer to the upcoming edition of our Retail Brokerage and Distribution Advisory Service http://investoreconomics.com/issue/the-retail-brokerage-report. Posted by Matthew Goldstein Matthew@iei.ca.