(New York)

The Charles Schwab-TDA acquisition will likely have a host of implications for advisors. While it will take time to figure out and explore all of those, one of the immediately negative effects will likely be less funds available on the platform. As advisors will know, TDA did not have its own suite of ETFs, while Schwab does. This meant that TDA did not favor its own funds on its platforms and there was plenty of room for everyone. Schwab openly favors its funds. With the platforms now combining, smaller funds of all varieties are going to be more challenged to find buyers and survive. Even large fund houses like BlackRock might be at a disadvantage because of how the deal will help Schwab grow its ETF offerings.

FINSUM: this is going to lead to further consolidation in the fund business and will likely allow Schwab’s ETFs to grab even more market share. They are currently in 5th place.