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3 Big Advisor Worries About Schwab-TD Ameritrade Deal: Joel Bruckenstein

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From left: Joel Bruckenstein, Heather Fortner, Shannon Spotswood and Teri Shepherd. (Photo: Jeff Berman/ALM) From left: Joel Bruckenstein, Heather Fortner, Shannon Spotswood and Teri Shepherd. (Photo: Jeff Berman/ALM)

Continued consolidation — especially the planned merger of Charles Schwab and TD Ameritrade — was among the standout concerns expressed by advisors, industry executives and others at TD Ameritrade’s recent National LINC 2020 conference in Orlando, Florida.

Of Schwab’s plan to buy TD Ameritrade for $26 billion, Joel Bruckenstein, president of Technology Tools for Today, told ThinkAdvisor that the concerns he heard “voiced most often” at the conference included culture differences between the firms.

While speaking to “quite a few advisors at the conference,” Bruckenstein said, another big concern that arose was around technology. Advisors like the open-access approach of TD Ameritrade’s Veo platform, and they “believe that TD’s tech is superior” to Schwab’s, be said Monday.

Advisors have also told Bruckenstein they think the service model for those with less than $100 million in assets under management will be “less favorable” under Schwab’s ownership, he said.

Of the continued consolidation of fintech players, Bruckenstein had said, during one conference panel, that for each one that worked out well, he could point to one that did not.

While some large firms just buy smaller ones to kill off the competition, in other cases, the cultures of firms that have been bought “changed significantly … so that worries me,” he said.

On Schwab’s purchase of TD Ameritrade, he told the panelists: “If some of the TD technology were to go away, it would be a lot more disruptive to your firms than you are admitting to yourselves. … Because everything from the way they buy and sell to the way their workflows are — they’re not the same. And so, your back-office ninjas are going to have to learn some new skill sets. And that’s going to be disruptive and it’s going to take some time.” Bruckenstein previously expressed similar concerns to ThinkAdvisor.

What is “most worrisome” to him, however, was the “openness that TD has to those bleeding-edge vendors,” he said at the conference, expressing concern that there may be a stifling of industry innovation among startups.

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