TD Ameritrade Holding Corp.’s top executive said its trading activity improved in January as investors “reengaged in the market.”

During a conference call with analysts Tuesday, Fred Tomczyk, the Omaha-based company’s chief executive officer, said it attracted $9 billion in net new assets in its fiscal first quarter, which ended Dec. 31, as both retail investors and registered investment advisors increased their investments.

He said the breakaway broker market has been “very active” and TD Ameritrade is having success with its AdvisorLink program, which it introduced in April to help advisors looking to buy, sell or merge their practices. (Read more about Fidelity's program here.)

Tomczyk said trading has increased by about 60,000 trades per day to 408,000 in January from a month earlier. He said it is still a little too early to pinpoint the exact reason, but he thinks investors “locked in their positions and took a break” in the middle of November, but they “certainly have come back in January.”

Average client trades fell 7.8% to 379,000 in its fiscal first quarter, but rose 6% from a year earlier. Client assets increased 36% to $318.6 billion  from a year earlier.

On Tuesday, TD Ameritrade reported its fiscal first quarter net income fell 26% to $136.2 million, or 23 cents a share, from a year earlier because of higher expenses and low interest rates. It reported revenue rose 2.3% to $624.6 million. Analysts polled by Thomson Reuters expected TD Ameritrade would report earnings of 26 cents on revenue of $634 million.

Tomczyk said he doesn’t expect Charles Schwab’s announcement this month that it plans to reduce its online equity trade commissions to hamper TD Ameritrade. He said TD Ameritrade values “the straightforward pricing structure. … It is not the only thing, but it is one thing that has worked for us.”

Schwab cut its pricing to $8.95 per online trade from $12.95. The new price point puts Schwab below TD Ameritrade. “Our research and our experience indicates that small differences in pricing don’t matter as much as technology tools, experience and the ability to get good execution,” Tomcyzk said. “People will not move for pricing. We don’t mind competing with anyone on price. At this point, we’ll monitor things any time a competitor makes changes, but we have no plans to change our pricing.”

Bill Gerber, TD Ameritrade’s chief financial officer, said it spent $9 million more on advertising and marketing in it fiscal first quarter because of “
“seasonality and other opportunistic spending."

The company said its operating margins declined to 38.5% from 51.8% because of higher costs associated with the acquisition of thinkorswim Group and increased marketing spending.

The $606 million acquisition, in which TD Ameritrade gained thinkorswim’s $3 billion of client assets under management and 87,000 retail brokerage accounts, gave TD Ameritrade scale and dominance in the online options trading business.

The integration of thinkorswim is going well, Tomcyzk said, as the company continue to generate “record” trades per and new accounts. He said its client retention levels, which stand between 98% and 99%, have improved since the acquisition was announced last year.

He said the company will continue the integration through this year and expects to “begin capturing further synergies in the second half of the year.”

After a difficult 2009, Tomczyk said he expects more brokers to breakaway and move into the independent channel this year because “now that things have stabilized and the worst of the recession is behind us” advisors can begin to consider other alternatives. “Advisors are looking to TD Ameritrade as a preferred custodian,” he said.

Isabella Fonseca, a senior analyst at Celent, a Bosto financial research and consulting firm, said TD Ameritrade's recent expansion beyond their core brokerage capabilities into banking and advisory services has contributed to their solid financial results.

She said the company is also aggressively following the market into options with the acquisition of thinkorswim, targeting the more active traders. "This organic growth has helped TD Ameritrade navigate the current economic environment," Fonseca said.