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TD Ameritrade Launches Virtual M&A Matchmaker for RIAs

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The new RIAConnect technology tool that TD Ameritrade Institutional launched Monday will make it easier for independent RIAs to meet potential M&A partners virtually, especially during the current pandemic, according to TD Ameritrade and Joel Bruckenstein, head of Technology Tools for Today (T3).

RIAConnect will also make it easier for advisory firm executives to meet virtually with potential successors and find next-generation talent, including college graduates and career changers looking to join an advisory firm, TD Ameritrade said.

Using the platform, RIAs can create profiles that include location, investment philosophy, value proposition, professional goals and objectives, the company noted. RIAConnect uses that criteria to suggest firms or individuals that may be a good match, and advisors can then message other advisors or next-gen candidates — “directly, anonymously and secure — revealing their identity only when they choose,” the company said.

These services are provided to TD Ameritrade advisors at no cost and are available on the Veo One custody and brokerage platform, it said.

The RIAConnect platform was built by RIA Match, “with a lot of input from TD Ameritrade Institutional” and “has been in development for more than a year,” TD Ameritrade spokesman Joseph Giannone told ThinkAdvisor.

It is just a “coincidence” that the new platform, which he called a “totally customized solution for independent RIAs and for NextGen talent,” has launched “in the midst of a period of social distancing,” he said.

“Advisors for a long while have been asking us to help develop such a solution,” he said. After all, he explained: “Firms want to hire next-gen talent, but they don’t always know where to look. Likewise, firms that are looking to grow via M&A are always eager to find good business partners, yet the traditional method of traveling and face-to-face meetings takes time. RIAConnect will allow buyers and sellers to make more contacts with advisors. We believe our technology will help advisors narrow the field to advisors that meet their criteria.”

It is, however, too soon to say whether the tool will continue to be used after the Schwab-TD Ameritrade merger is finalized.

“I can’t answer your question about the future of this or any other program following the merger’s completion,” Giannone conceded, adding: “Integration planning is still in the early stages and many decisions are still to be made. Keep in mind it could take 18 to 36 months for the two companies to be fully integrated. As for the completion date, we still expect that will take place in the second half of this year.”

A Schwab spokeswoman told ThinkAdvisor Monday: “Planning for the integration is underway, but we don’t have any decisions related to specific tools or platforms to announce at this time. We continue to expect the transaction to close sometime in the second half of the year.”

Bruckenstein’s Take

Bruckenstein echoed Giannone, telling ThinkAdvisor it was not easy to predict whether it would make sense for Schwab to continue offering the tool companywide after the pandemic because it would involve “making the technologies match up and talk together, and Schwab already has, I’m sure, their own thoughts on the way certain things have to work during and after the merger.”

However, the advisory technology guru added: “If TD in any way, shape or form has technologies that could be beneficial to all Schwab advisors and the current TD advisors really like [that tech], and there’s a way for them, without too heavy a lift, to adapt those technologies to the Schwab platform, one would assume that they would want to do that.”

Regardless, “the timing of it is good,” Bruckenstein said of RIAConnect, adding: “I think it’s a service that certainly some advisory firms will welcome. I just don’t really see any downside to it. If I’m an advisor and I’m sitting there and TD offers me something like this and I may be in the market even now or in the not-too-distant future, I would be excited about it.”

Although Bruckenstein stopped short of calling the new tool a “blockbuster,” he said: “Clearly, there’s been a lot of M&A activity in the market over the last few years and clearly the coronavirus has at least put a little bit of a damper on the activity, it seems. So the fact that TD Ameritrade is trying to use technology to help their advisors connect and match up firms that might possibly want to merge I think is a good thing.”

The tool and industry consolidation also stand to benefit TD Ameritrade, he added, pointing out: “It’s easier and cheaper for them to service one, let’s say, $1.5 billion firm than two $750 million firms. So the consolidation — not just for TD, but I think for any custodian — is something that’s somewhat beneficial to them.”

As for the Schwab-TD Ameritrade merger, he said, “it certainly feels like” a done deal at this point. “Once it got past the DOJ and once it got shareholder approval it’s difficult to imagine a scenario where it wouldn’t go through,” he said, pointing to the fact that the vast majority of shareholders of both firms voted Thursday to support the deal and that development came hours after Schwab said the Justice Department had approved the transaction.

“I think most of the major roadblocks are out of the way, so, to me, it feels more like just a timing issue now,” Bruckenstein said Monday.

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