If you follow financial media at all, it is likely that you have seen news about Schwab buying TD Ameritrade in a $26 billion all-stock deal.
Because I custody assets for many of my clients at TD Ameritrade (see postscript for a brief explanation of what a custodian does), some have asked what this deal will mean for them. I am writing this brief post to help address that question. If this subject is of interest to you, please note the following points.
- The deal is not final. Although Charles Schwab announced plans to buy TD Ameritrade, the deal has yet to be approved by antitrust regulators. This means it is too early to speculate about what the terms will specifically mean.
- It will take time. Pending regulatory approval, the integration of the two firms is expected to take 18 to 36 months* after the deal is closed. This means it will likely be a significant amount of time before any clients will be affected by this merger.
- There may be advantages. Some analysts believe the combined firm may be able to cut costs, stream new revenue opportunities and improve the platform. Only time will tell.
- Let’s stay focused on what we can control. When it comes to serving the financial needs of clients, it’s important to stay focused on what can be controlled. We cannot control the markets, the economy, or this merger. We can control the goals we set, the plans we make, and the perspectives we maintain. To that end, please be assured that I will keep looking out for your best interests and will inform you the moment I perceive something that may directly affect you, or if any adjustments need to be made.
Thank you for the confidence you have placed in me. I consider it an honor and a privilege to serve you!
P.S. A custodian is a financial institution that holds securities for safekeeping in order to minimize risks associated with theft or loss.