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Frequent Contributor

Schwab in Talks to Buy TD Ameritrade

https://www.cnbc.com/2019/11/21/charles-schwab-in-talks-to-buy-td-ameritrade-a-deal-could-be-announc...

Most sources are citing Fox Business as the source,   https://www.foxbusiness.com/markets/charles-schwab-buying-td-ameritrade-for-26b

When the fee war broke out, the speculation was that E*Trade could be the next one to be acquired and that may still happen. Pre-market activity, SCHW +9%, AMTD +24%, ETFC +2%.

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Frequent Contributor

Re: Schwab in Talks to Buy TD Ameritrade

Yep. Fidelity + Schwab will get bigger, VG already the biggest and Schwab will be the most flexible on fees (or maybe not when they realize it hurts the bottom line, Schwab doesn't match cash rewards anymore)

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Frequent Contributor

Re: Schwab in Talks to Buy TD Ameritrade

Interesting...  TDA/Thinkorswim absorbs Scottrade only to (maybe) be absorbed itself by Schwab?  That seems like a BIG bite to take?!

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Frequent Contributor

Re: Schwab in Talks to Buy TD Ameritrade

There is an opinion on this possible merger in Market Watch.

However, it wouldn't bother me as an investor but not the stock of the merged company.

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Re: Schwab in Talks to Buy TD Ameritrade


@ECEPROF wrote:

There is an opinion on this possible merger in Market Watch.

However, it wouldn't bother me as an investor but not the stock of the merged company.


Isn't Fidelity still bigger than Schwab?

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Explorer ○○

Re: Schwab in Talks to Buy TD Ameritrade


Wow this will be interesting - a merger of 2 big Brokerage firms....assuming everything comes thru.

I know of several locations where a Schwab and TDA office are nearby each other.  

I hear that many of the TDA advanced investors are somewhat worried/concerned ---- they love the Think or Swim (TOS) platform and hope Schwab won't mess with or replace that.

 

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Re: Schwab in Talks to Buy TD Ameritrade

Good luck to them. I have accts at both and would be happy to have them consolidated. Hopefully the result will keep the best of both. Right now, TDA customer service is light-years ahead of Schwab's.
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Explorer ○○

Re: Schwab in Talks to Buy TD Ameritrade



@FatKat wrote:

Isn't Fidelity still bigger than Schwab?


Yes Fidelity is bigger than Schwab as far as total assets and number of accounts.  In fact, Fidelity is bigger than even a combined Schwab + TD Ameritrade.  

However for RIA Custodian - Schwab is the largest in that category.  

It'll be interesting to see how Schwab handles the integration --- when Scottrade was taken over by TDA, I believe Scottrade customers were essentially forced to migrate over to the TDA platform and many customers complained about lost Cost Basis and Transaction History information.  

Wow what a play by Schwab --- announce zero commissions and TDA had to follow, tanking their stock and wounding them - Schwab sweeps in with intentions to buy.  TDA was looking for new leadership too because their CEO is set to leave in Feb 2020.  

But Canada's TD Bank has to approve of some sort of deal or structure as they own 43% of TDA.  

The CASH sweep account that TDA uses is affiliated with TD Bank - where TD Bank recognizes that revenue on their balance sheet, from what I have read.  But of course if Schwab buys TDA ---- Schwab has their own Bank where I'm sure they'd want to manage/operate the cash accounts. 

 

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Frequent Contributor

Re: Schwab in Talks to Buy TD Ameritrade

In Schwab takeover of USAA Brokerage business, the USAA customers are unhappy - they had access to higher paying m-mkt funds as core/settlement under USAA but will be shifted to very low paying Schwab Bank core/settlement.

TD Ameritrade had already removed m-mkt funds as core/settlement and had moved to TD Bank as core/settlement. After the existing contract expires, these core/settlement may be shifted to Schwab Bank.

There hasn't been much subsequent news on this acquisition and there are reports that regulatory clearance for Schwab + TD Ameritrade won't be easy.

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Participant ○

Re: Schwab in Talks to Buy TD Ameritrade

I just received the email from TDA an hour ago:

"We're excited to announce that Charles Schwab and TD Ameritrade have reached an agreement for Schwab to acquire TD Ameritrade.

The combined company will retain the Schwab name, and will reflect the best that each legacy firm has to offer, including leading trading and wealth management platforms, investor education, award-winning service, and banking.* This should bring clients like you an outstanding investing experience.

For now, the transaction is subject to customary closing conditions and is expected to close in the second half of 2020. During that time, there should be no impact to your account or how you work with TD Ameritrade.

For additional information about the transaction, please visit www.amtd.com for details."

I was a former Scottrade customer and have been enjoying the $17 fee for transaction fee mutual funds at TDA for that reason. I guess this will probably not continue under Schwab.

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Explorer ○

Re: Schwab in Talks to Buy TD Ameritrade

I'm not happy about this, having recently gone thru the conversion from Scottrade to TDA. I wonder if I'll be able to keep the same holdings, since a few were grandfathered in from Scottrade (allowed to buy PIMIX for much reduced $$ restrictions). 

Although the transition from Scottrade to TDA went fairly smoothly, considering how complex & large that transfer to TDA's platform was, it was a headache and stressful. There were missing dividends that took a while to show up. New platforms to get used to, etc. 

Since this is an outright purchase by Schwab, I assume TDA accounts will be transferred to Schwab. I looked at Schwab at the time of the Scottrade transfer, considering transferring somewhere other than TDA, but I decided against both Schwab & Fidelity. Although I did like Fidelity. I don't remember anything about Schwab, except that I didn't like it much.

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Re: Schwab in Talks to Buy TD Ameritrade

Too big to fail the "remix?"   Just another reason we need to really think about brushing off Glass Steagall.  Individual investors are enamored about not having to pay certain fees, but they are drastically overlooking the risk being added to the financial system with the direction these companies are going.  

I'm for blocking this merger for this reason as well as competitive reasons.   

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Explorer ○○

Re: Schwab in Talks to Buy TD Ameritrade


https://www.cnbc.com/2019/11/26/schwab-td-ameritrade-deal-could-create-new-challenger-to-big-banks.h...

Charles Schwab-TD Ameritrade deal will create a ‘powerhouse’ that could become a ‘default banking provider,’ says ETF pro

 

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Explorer ○○

Re: Schwab in Talks to Buy TD Ameritrade


Bloomberg had a fun title calling this merger/buyout.....Schwameritrade 

 

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Participant ○

Re: Schwab in Talks to Buy TD Ameritrade


@Kenster-man wrote:


Bloomberg had a fun title calling this merger/buyout.....Schwameritrade 

Can imagine ThinkOrSwim being renamed to ThinkOrSchwim.


 

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Frequent Contributor

Re: Schwab in Talks to Buy TD Ameritrade

There are reports that TD Bank's 43% stake in TD Ameritrade will become about 13% in the combined Schwab + TD Ameritrade, to be just named Schwab [jokes aside]. TD Bank may find it easier to sell/exchange its 13% stake in larger Schwab entity.

It seems that TD Bank will also hang on to its contract with TD Ameritrade for brokerage cash sweeps into TD Bank until 2021, so Schwab would have to wait a while to get its hands on sweeping that money into Schwab Bank.

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Re: Schwab in Talks to Buy TD Ameritrade

The transition from Scottrade over to TD Ameritrade was poorly handled.  Historical reporting, including fairly recent TOD documents were lost and needed to be redone.  I was told by TD Ameritrade that they were "packed" somewhere and could be accessed in an emergency.  I'm sure that access will be lost after the transfer of assets from TD Ameritrade over to Charles Schwab, where I also have an account.

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Re: Schwab in Talks to Buy TD Ameritrade

After TD Ameritrade acquired Scottrade , I was no longer paying $17 fees for transaction fee funds.  I was also charged the higher fee when I sold the fund, regardless of how long I had held it.  In addition, NTF funds at TD Ameritrade need to be held for six months to not incur a fee.  At Charles Schwab, it's three months.

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Participant ○

Re: Schwab in Talks to Buy TD Ameritrade


@Hope812 wrote:

After TD Ameritrade acquired Scottrade , I was no longer paying $17 fees for transaction fee funds.  I was also charged the higher fee when I sold the fund, regardless of how long I had held it.


That doesn't seem right. I continue to pay $17 for TF funds buy/sell after becoming TDA customer from Scottrade. You should ask them. They honor us this so as not to lose the ex Scottrade customers.

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Participant ○○○

Re: Schwab in Talks to Buy TD Ameritrade

Chang,

What do you like at Schwab that’s better than TDA?

I know I will miss the low price TDA TF mutual fund trades (I’m grand fathered in at TDA from TOS buyout) and the free auto invest for TF funds.

Also, the super low mins on MF in retirement accounts.

Does Schwab have lower mins on Pimco & Vanguard Inst/admiral funds?

 

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