As a financial professional, you’d have to be living under a mushroom not to have heard by now all the hullabaloo over the proposed Charles Schwab/TD Ameritrade deal.

Sure, it’s not closed as of this writing and there are all kinds of potential problems that could prevent it from actually coming to pass, not the least of which is that pesky little word “antitrust”. 

But for the sake of argument, let’s say it goes through. 

In the words of the Talking Heads, “Well, how did (we) get here”?

I have one word for you—fintech.

We often say that financial technology is nothing new. Going back thousands of years, the Mesopotamian numbering system was a form of financial technology. The Sumerian abacus was a form of financial technology. More recently, the (now seemingly ancient) Quotrons on the market floors were financial technology. And let’s not forget that interesting innovation that birthed a little over a decade ago called Bitcoin. 

But the NEW financial technology—the one that consumers can participate in via desktop and mobile devices—is what REALLY brought us to the point of this massive pending merger.

For years now, challenger banks like British-born Revolut and trading apps like Robinhood have been chipping away at the millennial market by offering new and more fun ways to trade and conduct financial transactions, often with extremely compressed (or no) transaction fees. 

And it’s that little “or no” clause from the sentence above that caused the likes of Interactive Brokers, TD Ameritrade, Schwab and others to completely eliminate their trading fees recently. Of course, these firms have other revenue streams, but even so this action hit their bottom lines and opened the door for this massive Schwab/TD Ameritrade deal to take place. 

As we’ve often said, it’s important for financial advisors to stay abreast of the emerging consumer-based fintechs. While some of their offerings might look sleek, they often provide extremely simplified portfolio and planning tools. And advisors should avail themselves to the myriad of wealthtech firms that offer institutional-level portfolio management, tax planning, risk assessment and more. 

Expect more M&A deals like this to come down the pike all thanks to innovation in finance—or in another word, fintech.