Kurz also believed that the acquisition will be a net positive for RIAs.

“Large-scale enterprise firms are here to stay and most will continue to grow and be successful,” said Kurz. “I do not feel that this means the smaller advisor automatically loses out or gets left behind. As custodians grow in their ability to serve more enterprise firms with more accounts and more transactions, they will utilize new technologies to gain efficiencies to serve these firms. I believe that will create more efficiencies to serve the smaller advisor along the way.”

Not all of Schwab’s clients are happy with the level of services they currently received, especially when compared to TD Ameritrade’s offerings. Among advisors who use both Schwab and TD Ameritrade, like Kiely and the anonymous New York-based advisor, many favor the features offered by TD Ameritrade.

“I’ve always told people that if I was starting out today, I would be with TD Ameritrade and not with Schwab,” said Kiely. “Schwab is really looking for the billion-dollar advisor.”

TD Ameritrade’s willingness to work with smaller advisors also gave younger and newly independent RIAs an opportunity to grow and develop at their own pace, advisors said. But new advisors may have difficulty finding custodians to work with them moving forward, worried the New York-based advisor.

“There’s not a clear path for younger advisors into independence now. You’re going to have to start clean and look at the various players in the custodian business,” he said. “If they’re smart, everyone else will put money into marketing to pick off disenfranchised TD Ameritrade folks and position themselves as TD had.”

The timing of the acquisition has also raised some eyebrows, as it comes on the heels of Schwab’s decision to eliminate trading commissions and fees on stocks and ETFs. That move had a small impact of Schwab’s bottom line—trading commissiokns made up 7% of the company’s revenue in 2018—but the decision to follow suit had a major impact on other companies, like TD Ameritrade, who were more dependent on the revenues provided by commissions. Ending commissions sent TD Ameritrade’s stock price on a rapid decline.

“I ... wonder if Schwab deliberately manipulated the markets by cutting fees to zero in order to drive the stock price of its competitor down before the acquisition,” said Kinney, adding that he wonders if Schwab will raise fees again after a successful merger.

RIAs will have plenty of time to survey the industry landscape and decide whether they want to stay with Charles Schwab. According to Schwab executives, the transaction is unlikely to close until the second half of 2020, and the integration of the two companies will take between 18 and 36 months to complete, meaning advisors might not see any real changes or impacts until 2023.

Some advisors noted that the timing of the transaction makes it less likely that regulators will balk at the creation of a $5 trillion financial behemoth that could dominate 70% to 80% of the U.S. RIA custody business.

First « 1 2 3 4 5 6 » Next