As expected, the Federal Reserve Board gave the final approval of Charles Schwab’s $26 billion acquisition of TD Ameritrade on October 6, 2020, forming a brokerage firm with over $6 trillion in client assets.
What do I need to do right now?
Nothing at all. For the time being, you will continue to access your accounts through TD Ameritrade—with the same user name and password. Combining the assets, processes, and services of the two companies is expected to take between 18 and 36 months, so it will be business as usual for the time being. Until the technical aspects of the transition are complete, Schwab and TD Ameritrade will operate as completely separate broker/dealers.
What can I expect from Schwab?
Since he began building his company, Charles Schwab has been decidedly client-focused. While many financial firms have their offices in New York City, the Schwab headquarters are in San Francisco, creating a different corporate culture at the outset. To welcome TD Ameritrade clients, Charles Schwab made a short video [3:53] in which he talks about his motivations for creating the company he envisioned—and how the innovations of TD Ameritrade continued to challenge him. It includes fascinating footage from the early days of stock trading when they were only able to complete 50 trades a day—all by hand with pen and paper!
What’s next?
When the transition is complete, your TD Ameritrade accounts will become Schwab accounts, but this is not expected to happen until 2022 or 2023. As your advisor, I will be monitoring the merger on a regular basis and will let you know of any upcoming changes.
If you have any questions along the way, please get in touch.