Charles Schwab announced today it has closed on a deal to acquire TD Ameritrade.
While the deal has closed, much remains to be decided about transitioning TD Ameritrade’s clients, technology and platforms over to Schwab, said Bernie Clark, executive vice president and head of Schwab Advisor Services, in a Tuesday morning press conference.
“This is still the early days of the transition, and I do remind everybody that this is the first time we’ve been able to talk about this, so it is only a beginning,” said Clark. “The independent space is a $20 trillion-plus asset business that we now have the opportunity to more fully penetrate. We’re going to be a $6 trillion firm with $2 trillion in advisor assets.”
Day One will be “business as usual,” said Clark, as Schwab considers the future of TD Ameritrade’s platforms and it works to combine the cultures of the two firms.
Clark noted the two firms already share a culture and a common philosophy on technology.
“We will train people across technologies, systems and organizations as we put our cultures together,” he said. “What advisors should expect is that more good things will be happening with the strength and the size that we have and the scale that we can create for advisors and our selves. We’ll be open architecture in our APIs and engage in aggressive technology approaches.”
However, he added, Schwab’s systems will serve as the foundation of the combined firm’s technology, and TD Ameritrade’s iRebal, Thinkpipes and Think or Swim platforms will all become part of Schwab’s new platform. Eventually, Schwab will operate with a single, unified platform.
In addition, Clark said, Schwab is “working aggressively” to combine the two firms’ advisor referral networks: Schwab’s Advisor Network and TD Ameritrade’s Advisor Direct.
“Our principles going forward will be quite similar,” he said. “You need to make sure you’re creating a situation where there’s a great enough supply to match the demand. After going through at least three iterations of advisor referral programs, we realized that having everyone in a program that has little supply doesn’t make anyone very happy. We’ll find our way to make sure this retail-driven program has reach and power.”
Clark pointed out that Schwab Advisor Center was responsible for $100 billion in advisor referrals throughout its existence.
It’s still “a little too soon” to talk about personnel changes at the combined firm, said Clark, though there have been a few notable recent exits from TD Ameritrade. That includes technology leader Dani Fava, TD's former director of innovation, who jumped to Envestnet, as well as public policy and regulation guru Skip Schweiss, formerly the managiing director of advisor advocacy, who left the firm earlier this year without stating his future plans. (Schweiss will serve as the 2021 president of the Financial Planning Association.)
And most recently, TD Ameritrade senior communications strategist Joseph Giannone announced his exit to take on an editorial role at Dow Jones & Co.
“We’re just starting to get into the depths of this transition, getting to know each other and figure out what kind of different things to expect,” said Clark.
Schwab plans to move its headquarters from San Francisco to West Lake, Texas, at the beginning of 2021. As of yet there are no plans for TD Ameritrade’s headquarters in Jersey City, N.J.
“This has to be more than one and one equals two," Clark said. "We want this to be great."