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Tom Bradley,

Industry Spotlight > Mergers and Acquisitions

Schwab Sets Date for TD Ameritrade Platform Conversion

By Jeff Berman

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Charles Schwab intends to complete the conversion of TD Ameritrade onto Schwab’s platform over the Labor Day weekend of 2023, Tom Bradley, managing director of Schwab Advisor Services, disclosed Thursday during an online briefing with reporters.

Schwab completed its $22 billion acquisition of TD Ameritrade in October 2020, forming a brokerage firm with over $6 trillion in client assets.

But the firm had yet to say exactly when the conversion of TD Ameritrade advisors onto the Schwab platform would be completed by until Thursday.

Tom Nally, TD Ameritrade Institutional president, said in January 2020 that integration between the two companies was expected to take two to three years to complete.

Bradley and Jessica Heffron, managing director of Advisor Services Integration at Schwab, provided updates on Thursday.

1. The completion of advisor services conversion of TD Ameritrade onto the Schwab platform will take place Labor Day weekend 2023.

“There’s a lot of thinking that went into picking that particular date,” according to Bradley. Three-day weekends are typically a good time for such conversions to be finalized, he said, noting it “gives you more time to get the data over and check it and make sure everything is OK and make any adjustments that might need to be made.”

Additionally, “there will be some preparation that the advisors will have to do” when it comes to training on the Schwab platform, he added. “We didn’t want that extra work or effort to fall on advisors in the middle of tax season,” which he noted is “typically one of the busiest times of the year for advisors.”

The goal is to have all Ameritrade advisors transferred over to the Schwab custody platform by the start of business on the Tuesday after Labor Day 2023, he and Heffron said.

2. TD Ameritrade advisors will mostly be able to keep their service teams.

“A big question that we haven’t directly answered, but we will right now, [is] do I get to keep my service team; what will my service experience be like?” Bradley said.

“The short answer is that for most advisors, you will actually be able to keep your person or your service team [so] the service experience for all advisors on the Ameritrade platform will be the same on Schwab platform,” he said.

He was quick to add: “There’ll be a few instances where we have to make some changes, but they’re few and far between. We’re having individual conversations with each of those advisors affected.”

3. Schwab said again that there will be no repapering.

The process of moving clients to the Schwab platform has been “top of mind” for most TD Ameritrade advisors, Bradley said. That is despite the fact that Schwab already said there would be no repapering required.

“The shorter answer is no. There is no repapering,” Bradley said Thursday. “I’ve been through many of these integrations. We have a way that we can do these integrations in a paperless fashion. It’s essentially through a negative consent letter and there will not be any repapering.”

4. The TD Ameritrade brand will be retired.

Bradley said once again on Thursday that Schwab Advisor Center will be the platform that remains standing.

But he reiterated that “we are taking popular and important functions from Veo and replicating those in SAC; we’re also keeping iRebal and we’re also keeping thinkpipes.”

He also disclosed that the TD Ameritrade brand “will get retired.”

5. Schwab continues to invest heavily in its platform.

Schwab continues to invest millions of dollars in platform enhancements, and every day there are new releases on the Schwab system, Bradley said. “We’re looking forward to the Ameritrade advisor being able to take advantage of that,” he added.

6. Schwab is hiring more staff ahead of the conversion.

Schwab is hiring people “in preparation of what we anticipate will be more calls around these conversions,” Bradley said, adding: “We usually just get more calls, more questions, especially after that conversion weekend.”

Therefore, “we’re hiring staff actually now because we want people to have some experience and be well trained and have some experience prior to that weekend,” he added.

7. Schwab stepped up its talks with advisors about the conversion over the summer.

At the start of summer, Schwab kicked off conversion discussions with advisors, Heffron said.

“As part of that, we released a roadmap that just kind of talked at a high level what advisors could expect on this journey, and we kind of painted a picture of five key phases on that kind of road to conversion weekend” coming up, she noted.

The first phase was to “get grounded” and there was a “kickoff webcast where we had over 11,000 attendees,” she said, adding: “We had two subsequent webcasts as well.” Schwab also released a transition planning guide, she noted.

That phase was to be followed by: get ready, complete setup, explore/train and conversion, she noted.

8. The Jump Start program is getting less use than expected.

Schwab launched a program called Jump Start in the first quarter of 2022 letting TD Ameritrade advisors choose to open new accounts on the Schwab platform.

“I would say Jump Start’s going pretty well,” Bradley said Thursday. “We got a great response from advisors who are interested in coming over and opening more accounts on the Schwab platform to get to know it.”

But he said: “One observation, though, frankly, is that we’re not seeing heavy [usage]. It’s tough for advisors to break out of their inertia and I thought that we would see more.”

However, “it seems like they’re coming on” to the Schwab platform, he noted. “They’re opening some, some accounts poking around the systems but I wouldn’t say that they’ve actually jumped in.

Bradley would “like personally to see more advisors jump in head first,” he told reporters.

9. Third-party technology vendors are getting up to speed.

The third-party technology vendor community is in much the same place as the TD Ameritrade advisors.

Schwab was “already in touch with all the vendors” that are being integrated into the merged platform, according to Heffron. “We’ve reached out to them. We’ve invited nearly all of them,” she said.

Many vendors were already active and engaged, she said, adding the firm was “strongly encouraging our advisors to talk directly to the vendors.”

10. What’s left now is to execute.

“Most of the planning is done” now for the conversion, Bradley said. “It’s all about execution now.” But he conceded: “There’s still a lot of work before this actually happens.”

Jeff Berman

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