Following Charles Schwab’s $22 billion purchase of TD Ameritrade on Oct. 6, Schwab is evaluating which platform features will shift over to the combined platform and which won’t, according to Andrew Salesky, senior vice president of Digital Advisor Solutions at Schwab Advisor Services.
“It’s not as if we are going to duplicate every feature” that the companies currently offer, he said Thursday, on a call with the media.
“We are looking at those features that are … most highly utilized, valued by clients [and] ensuring those are included,” he said. While some capabilities won’t make it on day one of the combined platform when it launches, some may potentially be added at a later date, Salesky said.
“We are very committed to creating one platform — one set of tools and capabilities — that really bring together the best of both” firms,” he told reporters.
On Oct. 1, Schwab said its integration of TD Ameritrade should take about 18 to 36 months to complete. This timeline means the technology tie-up and related efforts won’t be done until April 2022 at the earliest and by October 2023 at the latest. Until this process is fully wrapped up, both firms will operate as separate broker-dealers and entities.
In early August, Schwab said 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 the integration — along with TD Ameritrade Institutional’s portfolio rebalancing solution, iRebal, for RIAs.
Meanwhile, Schwab Advisor Center is serving as the “foundation” for the new platform that is being created through the ongoing integration, Salesky said, reiterating the goal is to offer “the best of both platforms.”
“In the interim, TDA clients will continue to benefit from the TDA platforms and, similarly, the Schwab clients will continue to benefit from Schwab platforms,” he explained.
However, the executive added: “Eventually, we do intend to get to a single broker-dealer. That single broker-dealer will be the Schwab broker-dealer and we will have one set of platforms to support our advisor clients.”
Schwab Platform Trends
“Digital adoption continues to increase among our advisors and clients” overall, said Lauren Wilkinson, vice president of Digital Advisor Solutions, on the call.
For example, with its Move Money transfer tool, “70% of our money movements are now initiated online and certain transactions, like very time-sensitive wires, are close to 90% now initiated online,” she explained.
There are now about seven third-party technology vendors that have integrated to Schwab’s Digital Account Open onboarding capability and “six more are in development,” according to Kartik Srinivasan, head of Schwab’s third-party integrations.
Meanwhile, five vendors have already “expressed strong interest” in Schwab’s new Digital Address Change capability and are “actively developing to that integration,” he said.