Displaying items by tag: TDA

Tuesday, 10 December 2019 08:10

Will Schwab Alienate Small RIAs in TDA Deal?

(New York)

One of the big worries on small RIAs’ minds right now is whether Schwab is going to leave them out on an island to wither. Small RIAs have always been the bread and butter market for TD Ameritrade, but with its recent acquisition by Schwab, that could all change—such is the fear of the small independent shop. However, Schwab has taken a couple of moves that seem to indicate they are not going to forget about the group. In particular, they have hired Tom Bradley from TDA, who for years ran TDA’s RIA custody business, to lead the new combined effort.


FINSUM: There is still a good degree of doubt over whether Schwab will mainly focus on its institutional clients and large RIAs, but this is a sign that Schwab is not likely to forget about its small RIAs.

Published in Wealth Management
Monday, 09 December 2019 09:01

TDA Says Now is the Time to Breakaway

(Boston)

Earlier this year (before the Schwab deal), TD Ameritrade put out an interesting report about breaking away. The report was centered on advisors’ motivations for breaking away as well as their likelihood of doing so. One of the most interesting findings is that as of July, 46% of advisors who were thinking of breaking away said that they had increased urgency since the start of the year. 44% said they would move within the next year. The main reasons were freedom, compensation, and client service, all of which they felt were better at an independent. Another key finding is that only about 36% of advisors wanted to breakaway on their own; most wanted to merge with another partner or join an established firm.


FINSUM: The breakaway movement is only gaining momentum. Wirehouses are shedding advisors and RIAs and IBDs are picking them up left and right.

Published in Wealth Management
Monday, 25 November 2019 11:19

Schwab-TDA Deal Poses Trouble for ETFs

(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.

Published in Wealth Management
Wednesday, 16 October 2019 08:32

Mutual Funds Aren’t Included in Zero Fee Shift

(New York)

Investors and advisors—don’t get too excited about the zero fee shift among the big brokers, it is not all that it appeared to be. In particular, mutual funds seem to have been entirely left behind in the zero fee shift. Essentially, none of the big brokers has scrapped fees on mutual fund trades. While ETFs are now free to trade, mutual funds in some cases have transaction fees as high as $75.


FINSUM: This is going to wound the mutual fund market further, as not only do mutual funds have higher fees, but trading them will now be commensurately more difficult than ETFs too.

Published in Wealth Management
Friday, 11 October 2019 08:37

Fidelity Cuts All Commissions (plus a Twist)

(New York)

It actually took longer than we expected. Last week there was a big splash in markets and media when Schwab, TDA, and E*Trade all cut their commissions in response to a first move by Schwab. Now, unsurprisingly—except for how long it took—Fidelity has followed suit. The unique part about Fidelity’s move is that in addition to free trades, it is also offering free money market funds for any cash left in accounts. Those are currently 1.58%, and way ahead of the near zero yield you get on cash at Schwab, TDA, and E*Trade.


FINSUM: The whole market has gone to zero on trading commissions. One wonders if the same is going to happen on large ETFs.

Published in Wealth Management
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