The reported talks with Schwab come at a challenging time for TD Ameritrade. The move to eliminate commissions caused a double-digit decline in its stock price in October. Moreover, three interest rate cuts by the Federal Reserve Board has slashed the spreads all financial institutions earn on money market sweep accounts. Last year this was a major source of profits for discount firms.
Additionally, Tim Hockey resigned as TD's CEO in July, citing differences with its board of directors. The discount brokerage has yet to name a replacement.
In the past, TD has been an acquirer. In 2016, it purchased Scottrade and in recent months there had been rumors it would buy E*Trade.