Schwab Acquisition of TD Ameritrade: What it Means to You

Amidst an already busy Fall and fast-approaching year-end there has been a piece of significant news in the financial services world: Charles Schwab will be acquiring TD Ameritrade in a $26 billion combination.

What does the Schwab’s acquisition of TD Ameritrade mean for clients and individual investors?

Forget about the numbers for a minute. Here are a few questions and answers that matter to individual investors and clients:

What does this mean for client monies?

  • Namely, that a leading global custodian and financial services provider, Charles Schwab & Co., will continue to be a leading global custodian and financial services provider.

Who are the primary clients served by Charles Schwab & Co.?

This is an important question because Charles Schwab serves two main types of clients, among others:

  • Independent investment advisory firms, like my firm, Main Street Financial Solutions, LLC, for whom Charles Schwab serves as custodian
  • Individual investors who choose to have an adviser who sits at a Charles Schwab office.
  • Both of these clients over the past years and months have seen a gradual decline in the costs to invest and receive account services.
  • Appropriate advice to the end client (you) holds the primary value, along with trust and competency.
  • The combination of Charles Schwab and TD aims to maintain these three pillars, along with the ability to provide value for the stated cost.

What is a custodian?

A custodian is the entity who has legal responsibility for holding and making available client monies. Independent investment advisers in the form of Registered Investment Advisers (RIA firms) must use a custodian to legally carry out their duties in managing client assets.

What does this mean for my financial life?

The combination of Charles Schwab with TD Ameritrade aims to provide clients with a leader in the trading and wealth management world — thus continuing to make it easier and more transparent for clients to get advice, save and invest for today and the future (plus be able to spend your money when and how you desire).

Please do not hesitate to reach out with any further questions – big or small.

Thank you for reading and Happy Thanksgiving!


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