The final paperwork and related procedures tied to Charles Schwab’s $22 billion purchase of TD Ameritrade were completed Tuesday. But now — with an estimated 18 to 36 months of integration efforts ahead — the real heavy lifting begins.
“Buckle Up. This one’s going to be bumpy. History of tough competition doesn’t often equate to harmonious marriages,” said industry consultant Doug Fritz Friday on LinkedIn, as more details on the wrap-up were being discussed.
Fritz sees potential tension in the Schwab-TD Ameritrade relationship spilling over into technology: “It will have a definite impact on the conversion timeline. From a system perspective, we’re also predicting serious potholes down the road. These experience issues will (unfortunately) be borne by their clients and advisors.”
TD Ameritrade Institutional’s RIA clients were told last week that the popular National LINC Conference won’t be held in early 2021. Could it return at a future date?
“We are evaluating our events calendar for 2021 and remain committed to delivering valuable content and professional development opportunities in a variety of channels. We will share more detail when we have it,” Schwab said.
It will, though, stage the yearly Schwab Impact event online Oct. 27-28 for advisors working with both parts of the freshly merged firm.
Bernie Clark, head of Advisor Services for Schwab, said during a media call Tuesday that the deal’s significance is “really huge.”
The transaction could be viewed as “the biggest thing we’ve seen happening in this space, in bringing great companies together with like-minded approaches to their clients and an opportunity for all investors,” Clark said.
The combined brokerage firm has over $6 trillion in client assets. In June, the combined assets handled by their registered investment advisor, or RIA, clients was $2.6 trillion — of which $1.9 trillion was at Schwab and $700 billion at TD Ameritrade.
About 30% of RIAs in the new entity work with both Schwab and TD Ameritrade Institutional. The remaining 70% custody with one of the two firms.
Some advisors in these two RIA segments also may work with other custodial firms like Fidelity or BNY Mellon Pershing.
Fidelity Institutional, which includes non-RIA clients, reports that it had about $3.2 trillion in assets under administration as of June 30 and works with 3,000-plus RIAs.
“Over the past year, we have seen a significant increase in inbound calls from firms that want to diversify and work with a custodian focused on delivering the greatest value to them,” said David Canter, head of the RIA and family office segments for Fidelity Institutional, in a statement.