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Industry Spotlight > Mergers and Acquisitions

No Big Issues With TD Ameritrade Integration: Schwab

By Jeff Berman

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Schwab Advisor Services executives said Tuesday that this past weekend’s conversion of TD Ameritrade advisors to Schwab’s custodian platform went remarkably well, with no significant problems.

“This weekend, we moved [over] 7,000 advisor firms from the green platform, [which is] the TD Ameritrade platform to the blue, or the Schwab, platform,” Bernie Clark, head of Schwab Advisor Services, said during a media phone briefing.

Schwab Advisor Services also transitioned 3.6 million accounts held by advisors’ clients and about another 3.6 million on the retail side also, with “$1.3 trillion in assets moving overall,” making it the largest conversion weekend for the company among the three it did, Clark said.

As of now, “80% of all clients have now transitioned over to the Charles Schwab platform,” with the advisor transition completed entirely over the past weekend, he said.

Not Out of the Woods Yet

But, during the Q&A, fintech expert Joel Bruckenstein, producer of the annual Technology Tools for Today (T3) Conference and publisher of the T3 Technology Hub, said: “From where I sit, I see one more day at least of hurdles, which is the first day of trading,” one day after Labor Day, and “reconciliation and all of that.”

Therefore, he said: “Before you circle the wagons and say this has been a total success, we need to see how tonight goes.”

However, Bruckenstein noted: “I certainly appreciate the complexity of what just happened. So congratulations. I think it’s a major accomplishment.”

On Monday, the technology expert told ThinkAdvisor by email: “I’ve talked to a number of vendors. For the most part, all is going well (I predicted there would be some minimal outliers). [The] next test will be tonight/tomorrow morning when all the RIA firms finalize their side. Then, Tuesday evening/Wed morning with the first full day of Schwab trading/recon.”

“Minor” Issues

Whenever there is a conversion from one custodian to another, “there’s always some things where maybe a position doesn’t transfer exactly as expected or sometimes there’s issues with timing where something comes in after-market and pricing doesn’t come in there,” Jess Heffron, managing director of Advisor Services Integration at Schwab, said in response to a ThinkAdvisor question.

“We were able to address a lot of that over the weekend but there’s some items that may be processing tonight and will be there tomorrow,” she said. But, when you think about the millions of conversions that were done over the weekend, the number of problems are “very minor in the big picture,” she added.

Among the customer service phone calls that Schwab received over the weekend, “it’s all about login; password resets; questions around functionality; a lot of validation, making sure that move money instructions … came over as they wanted,” said Tom Bradley, Schwab managing director. “It’s a lot of check-ins and that’s about it really,” he noted.

The issue with logins that he cited was backed up by the small number of reported problems with the Schwab platform at Downdetector.com Monday evening at 5 p.m. through Tuesday afternoon at 2 p.m., with no more than nine reported problems at any one time during the period. Of the problems reported, 63% involved login, followed by 25% portfolio management and 13% website, according to the site.

Other Data Points

Providing more numbers, Schwab Advisor Services said that, when it came to advisor engagement, over 98% firms “took proactive steps to prepare for the transition” and Schwab hosted over 50 integration education events that included almost 100 hours of content.

More than 60,000 individuals from over 5,000 firms, meanwhile, attended its integration education events, the firm said.

Across all those education events, Schwab fielded (and answered) about 16,000 questions from advisors. Also, more than 13,000 advisors registered for SOLUTIONS, either the two-day virtual event in August or one of four in-person events in July. In all, Schwab offered 52 hours of in-depth education at annual SOLUTIONS events, the firm said.

TD Ameritrade employees received more than 30,000 hours of training on Schwab systems, Schwab noted.

Schwab also developed a comprehensive Transition Planning Guide and has regularly updated and expanded it. The firm has already created 13 RIA EdCenter modules to help TDA advisors get trained on Schwab Advisor Center, Move Money, trading and research, and other platform tools, it said.

Schwab will host more live training sessions and office-hours webcasts following this past weekend’s integration.

Schwab has been moving accounts in groups since February. The transition to the Schwab platform scheduled for Labor Day weekend, Sept. 2-5, represents the final major step to integrate the two companies as part of Schwab’s $22 billion acquisition of TD Ameritrade that closed in October 2020.

Credit: Shutterstock

Jeff Berman

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