TD Ameritrade (Nasdaq:AMTD), Charles Schwab (Nasdaq:SCHW), TradeStation (Nasdaq:TRAD) Preferred by FBR Capital

Looking into investment services for 2011, FBR Capital said they prefer online brokers such as TD Ameritrade (Nasdaq:AMTD), Charles Schwab (Nasdaq:SCHW) and TradeStation (Nasdaq:TRAD) over asset managers.

FBR also noted that even in the asset management segment there will be an increasing transfer of assets away from bonds to equities.

FBR said, "As we look toward 2011, our outlook for investment services, including asset managers and online brokers, remains challenged. We expect macroeconomic factors, such as unemployment and further consumer de-leveraging, to sustain headwinds that may keep investors from reengaging fully in the equity markets, which could dampen inflows into mutual funds and client trading activity. At the same time, our expectations of continued low interest rates will likely mean more money market fee waivers for asset managers and spread compression for the online brokers. As such, we still favor asset managers that are more weighted toward fixed income, such as Franklin Resources, Inc. (NYSE: BEN)(Outperform), versus equity managers—at least heading into the early part of 2011. Overall, however, we favor online brokers over asset managers. What happens to interest rates will define much of the stock performance for this group in 2011. As macro conditions improve, we believe investors will move first toward online brokers, such as TD Ameritrade Holding Corporation (Outperform), Charles Schwab Corporation (Market Perform), and TradeStation Group, Inc. (Market Perform), in anticipation of the earnings leverage created by rising rates in those models. While asset managers outperformed online brokers during the last rising rate environment, rates are starting at much lower levels today, and as a result, there is more net interest margin (NIM) expansion to unleash this time around. At the same time, investors will likely shift out of fixed-income trades among the asset managers and into those with higher equity exposure, such as Janus Capital Group Inc. (NYSE:JNS)(Market Perform); Waddell & Reed Financial, Inc. (NYSE:WDR)(Market Perform); and T. Rowe Price Group, Inc. (Nasdaq:TROW)(Outperform). Absent such a recovering macro and rate environment, we believe consolidation among the online brokers will begin to occur, providing another reason to favor the group."

TD Ameritrade was trading at $18.50, up $0.01, or 0.03 percent, as of 2:14 PM EST. Charles Schwab was trading at $16.61, $0.20, or 1.19 percent. TradeStation was trading at $6.55, up $0.06, or 0.92 percent.