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Industry Spotlight > RIAs

Advisors Frustrated by Schwab, TD Ameritrade Service Delays

By Jeff Berman

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Advisors have reported 45-minute wait times on the phone and weeks-long delays on service tickets, among other service problems with TD Ameritrade and its new parent, Charles Schwab, in recent months.

The issues were apparently first raised in a tweet Thursday by Michael H. Baker, a manager and founding member of Vertex Capital Advisors in Fort Mill, South Carolina, and reported by Wealth Management on Friday.

In a tweet that followed that day, Baker said he “caught a mistake today that quite frankly could have gotten me fired… totally not my fault, but doesn’t matter.”

Baker didn’t get into specifics on Twitter. But in an email on Monday, he told ThinkAdvisor the decline in service has “been going for a little while now [but] I probably began to notice more since the merger with Schwab” that was completed in the fall. “I would say the last 2 months or so have been the most noticeable.”

The mistakes he experienced were mostly service-related ones as opposed to technical issues, including “form ambiguity” and a lack of follow-up from TD Ameritrade. An error in TD-processed automated savings instructions “was the specific instance that prompted my tweet,” he said, explaining: “Frustration had been building for a while, though.”

There were other issues he experienced, but “I don’t wish to discuss specific issues as [they] may potentially be tied to clients,” he told ThinkAdvisor.

TD management had “reached out” to him “but we have not been able to connect,” he said, adding: “I do plan to speak with them and share my concerns.”

‘Beyond Absurd’

It was not just Baker who had issues with TD Ameritrade. Several advisors responded to his tweet, saying they, too, experienced problems in recent months. Some also complained of service problems with Schwab.

“Things are beyond absurd with Schwab,” Michael Brown, principal at The Planning Group in Northfield, Illinois, tweeted Friday.

The issue started in March and “steadily got worse throughout the year,” Brown told ThinkAdvisor on Monday. “The peak was in December with us having regular wait times of over an hour to reach the right people at Schwab. On multiple occasions I had to call in with clients who had to wait 45 minutes in order to reach somebody.”

New Service Model

Brown chalked up the problem to “Schwab switching from a dedicated team-based service model to a general pool, which goes along with [its] new phone system which is supposed to route you to a specialist who can deal directly with your specific problem.”

There has “been a big push” by Schwab to “get all of our interaction with the company moved online,” Brown said. “Ironically this one’s … leaving our most valuable joint clients in the lurch because they are often older and less capable or less interested in interacting electronically.”

It was also “sadly not limited to delays in reaching somebody,” he explained, explaining: “We regularly submit service tickets which wind [up] sitting for days and sometimes weeks without being acted on.

“In the past it was normal to have a member of the team call back if there was an issue that couldn’t be resolved immediately,” the advisor stated. “We’ve had several important service items where we get multiple promises for callbacks and nobody takes ownership and nobody follows up.”

Brown had been in contact with Schwab about the issues, he added. “Our understanding is that they are going to be doing a beta test of the old service model. They have not given us a reason as to why this would be happening. My guess is that it’s due to the massive increase in volume on the retail side combined with their new phone system.”

Schwab Responds

Schwab spokesman Rob Farmer said in a statement: “We are aware there have been instances over the past few months in which we have not met our usual high standards for client service. We are actively working to resolve issues that may have led to an unsatisfactory service experience or longer than usual hold times.

“These issues are the result of a confluence of challenging factors but, importantly, they are not due to the ongoing integration of Schwab and TDAI. We certainly regret any inconvenience our service levels may have created and we’re working to resolve them as quickly as possible.”

— Related on ThinkAdvisor:

Jeff Berman

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