Charles Schwab’s first detailed announcement on how it plans to integrate TD Ameritrade’s technology into the combined entity is drawing mixed reviews.
Schwab said late Wednesday that TD Ameritrade’s thinkorswim and thinkpipes trading platforms, educational resources and tools will be part of what it offers clients of independent advisors and other investors following its acquisition of a former rival, set to wrap up by year-end.
It also plans to keep TD Ameritrade Institutional’s portfolio rebalancing solution, iRebal, for RIAs. The full technology integration is expected to take 18 to 36 months to complete after the deal closes, meaning the tech tie-up would be ready in about mid-2022 at the earliest and by the end of 2023 at the latest.
Schwab’s plan is “definitely a win for TDA advisors, as those assets were truly differentiated from TDA’s superior technology offering vs. Schwab,” Tim Welsh, head of the consultancy Nexus Strategy told ThinkAdvisor by email on Thursday.
“However, as history has shown, nothing ever goes smoothly in a technology integration, so the disruption from the massive merger for advisors will be real,” he noted. “Will they stick around and muddle through it? That is the $26 billion question.”
Meanwhile, Joel Bruckenstein, head of Technology Tools for Today, called Schwab’s plan a “good move” in a tweet on Wednesday.
(The thinkpipes platform offers advisors features that include real-time charting and efficient trading and allocation.)
More Critical Views
Gavin Spitzner, president of Wealth Consulting Partners, differed from Bruckenstein in his views of the tech development. He called Schwab’s announcement “non-news news in the sense that I can’t imagine Schwab saying anything other than they’re going to maintain thinkorswim and other legacy TDA solutions.”
Schwab seemed to be “simply saying they’re retaining both legacy trading platforms — thinkorswim and Schwab’s StreetSmartEdge — and they’ll figure out how to integrate later,” Spitzner told ThinkAdvisor by email on Thursday.
“They’re not going to tell either set of existing users they’re shutting down their platform. Instead this freezes the market and kicks the can down the road, which is exactly what I would do,” explained Spitzner.