TD Ameritrade Reps Can Now Advise Clients on Schwab Products

Although the full integration of TD Ameritrade into Charles Schwab’s platform isn’t expected to be completed until next year, TDA reps can now advise their clients on Schwab products, the company disclosed in a recent winter business update webcast.

“We’ve been embarking on a project we call dual registration, which is allowing us to dual register our Ameritrade sales staff,” according to Jonathan Craig, Schwab managing director and head of investor services and marketing.

“All the regulatory work, all the training, all the supervision is all complete” now under that project, he said.

Effective Feb. 1, “all eligible TD Ameritrade licensed professionals who completed training requirements were granted dual registration status,” Schwab said in a statement provided to ThinkAdvisor.

“What that means is they can talk to their clients about Schwab solutions — but not only talk to them, they can enroll them in the solutions, they can continue to support them and they can get paid on those solutions,” Craig explained.

“If they have a client who wants to bring over assets to Schwab early or maybe wants to be a dual client or maybe wants to bring all their assets over to Schwab early, that financial consultant at Ameritrade can still be the same financial consultant, so the client gets to move early but keep the relationship,” he said.

Also through the dual registration, TDA sales staff have all been trained on Schwab products, solutions and procedures “well in advance of client conversion, which means they will be very well prepared to answer the questions that inevitably their clients are going to have when they do convert,” he said.

The ability of TDA reps to sell Schwab products now means that at least some TDA client assets can start moving over to Schwab ahead of the full integration.

“Dually registered professionals will remain employees of TD Ameritrade but will be able to offer most Schwab products to TD Ameritrade clients,” Schwab added in its statement. “This includes opening Schwab accounts and providing TD Ameritrade clients access to Schwab’s portfolio of solutions prior to account conversion, scheduled for mid- to late 2023.”

Although the company is focused on Schwab investments, it made “surgical investments” on the TDA side in 2021, Craig also said.

Plans Still on Track

Schwab, meanwhile, is still on track to complete the integration on time next year, within the 30- to 36-month timeframe the company gave after announcing plans to acquire TDA, according to Joe Martinetto, Schwab managing director and chief operating officer. Schwab announced the completion of the merger in October 2020.

The company is “about halfway through the technology work we have to do” to transition TD clients to Schwab, he said.

Schwab is also still confident it will achieve $1.8 billion to $2 billion in run-rate expense synergies as part of the merger, he noted, saying about half the synergies were already achieved. That included the closure of about 215 branches combined across the two companies, he said.

“Most of the remaining synergies are likely to come after the client and advisor transitions,” according to Martinetto. “That’s not to say that we won’t see some small benefits as we continue to work our way through the work of this year, but the big drivers of expense synergies yet to come will largely come after that transition.”