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Schwab/TD Ameritrade Merger: A Short and Easy Trip Thumbnail

Schwab/TD Ameritrade Merger: A Short and Easy Trip

TD Ameritrade recently sent out communications, “Transition to Schwab: Important details about your upcoming account move,” where they officially announced that your accounts at TD Ameritrade will be moving to Schwab. 

I thought the letter did a good job walking through the merger process, but I’ll highlight some of the bigger points:

  • Everything will remain the same with our relationship and service levels. I’ll have the same authorizations and abilities that I currently have.
  • No action is necessary from you. Your accounts will automatically transfer to Schwab over the Labor Day weekend. There are no forms for you to complete and there is no cost to you.
  • Business will be open as usual with your deposits and withdrawals happening as scheduled. You and I will have full access to your TD Ameritrade account through Friday, September 1st. Starting Tuesday, September 5th, we’ll have full access through Schwab. 
  • After the move, you will have access to view your accounts through Schwab’s client portal (Schwab Alliance). You’ll receive information about this portal in mid-August.
  • Schwab has set up a Client Information Hub with more information about the transition. Visit https://welcome.schwab.com/alliance for more details.

The Road Ahead Looks Clear

Schwab purchased TD Ameritrade in 2019. As a satisfied TD Ameritrade user for more than a decade, I was initially concerned with the Schwab purchase. (We’ve all had the experience where a favored restaurant was taken “under new management” and the result was not quite the same.) After attending more than ten hours of presentations with Schwab’s key management and transition teams, I’m confident that your experience will be comparable to what you have experienced at TD Ameritrade.

My confidence comes from many angles:

  • Schwab is the leader in the qualified custodian space. The firm is over 30 years old, has over $3.5 trillion in assets under management, and works with over 15,000 advisor firms.
  • I used the Schwab platform for over 12 years before working with TD Ameritrade. (I’ve been to this “restaurant” before and it’s better than the last time I was there.) I’m very familiar with Schwab’s forms, support, tools, and technology. With the TD Ameritrade purchase, Schwab is rolling in some of the great tools I use today. 
  • Schwab recently merged millions of “retail” (non-advisory) TD Ameritrade accounts with few hassles. They are updating their communications and processes using what they learned. 
  • I know many advisors who are using the Schwab platform today, and several are using both TDA and Schwab. Universally, they comment that their experience with both firms is similar.
  • I’ve been reviewing alternative custodians. After a relatively deep dive with five different options, I did not find any firm that looked better than Schwab. I’ll continue with these reviews and will make a change if it will improve your experience and financial results.

The Roadmap 

Here's the timeline for the transition journey:

  • 60 days before the switch, Schwab will send you an Account Notification letter (this already went out)
  • 28 days before transition, you'll be asked to create new Schwab Alliance login credentials; this is the only step that requires any work for you
  • 3-4 weeks pre-transition, a Key Information packet with your new Schwab account number and important details will be sent to you
  • The transition weekend will be the Labor Day Weekend

Points of Interest

Let me point out some things you might be wondering about:

  • Schwab’s trading fees are going to match what you currently have at TD Ameritrade
  • Your holdings will transition “in-kind;” this merger will cause no forced sales, costs, or tax consequences
  • Following the transition, you'll receive two statements: one for your TD Ameritrade account showing a zero balance, and one for your new Schwab account
  • You will receive two batches of tax paperwork when tax season rolls around in 2024
  • Schwab has several advantages over TD Ameritrade that make me more efficient as I work with your accounts:
    • Using the Schwab Charitable platform (for those making larger charitable donations) worked seamlessly with their custodian platform
    • Schwab’s fixed-income platform is more robust than what TD Ameritrade offers
    • Schwab has more branches available in the rare cases they are needed
    • Schwab’s tools will simplify future paperwork needs (i.e., account changes, money movements, etc.)

Are We Home Yet?

Although there is nothing you need to do to make the transition run smoothly, I’ll be working proactively to make sure we are set up for success. Specifically, 

  • I’ll remain in tight contact with Schwab to ensure an easy transition. I’ve already set up my advisor access and am working to (re)familiarize myself with Schwab’s tools and team members.
  • Schwab will provide me with a preview of what the transitioned accounts will look like on their platform long before the actual transition date. I’ll comb through all client accounts to see if any issues come up.
  • I’ll make a full copy of your historical information just before the transition date. This step will allow me to match up your statements, tax data, and holdings to ensure everything goes smoothly. I’m trusting but also verifying everything. 

Along For The Smooth Ride

As the Schwab and TD Ameritrade merger unfolds, the path ahead looks promising. TD Ameritrade and I will keep you updated as we move forward. Please let me know how I can make the “trip” more comfortable for you.