Schwab execs declare RIA transition from TD a success


Labor Day weekend this year marked more than the unofficial end of the summer. It also marked the end of TD Ameritrade’s custodial platform for independent financial advisors.

Over the weekend, 3.6 million accounts and held across 7,000 registered investment advisors finally moved from TD to Schwab Advisor Services, the most significant step toward completing the integration of Charles Schwab Corp’s $22 billion acquisition. It’s one of the largest data migrations attempted in any industry, let alone in financial services, and countless hours from both Schwab and RIAs went into making the transition go off smoothly.

And throughout the first day, few advisors appear to be experiencing significant problems.

“So far, so good (for my firm),” Jack O’Connor, an advisor with O’Connor Financial Group, said on X (formerly known as Twitter). “Still plenty of time for issues, but I’m pleased so far.”

Some advisors complained on social media about long hold times for service, something that Schwab executives warned could happen despite efforts to staff up call centers. Most calls have been around “basic stuff” such as login information, password resets, questions about functionality and validating things like bank transfers, said Tom Bradley, managing director of Schwab Advisor Services.

“Mostly a lot of check-ins. That’s about it really,” Bradley said Tuesday during a call with reporters.

In all, Day One has been “kind of boring,” which is enough for Schwab execs like Bradley to declare the transition a success.

“We’ve been predicting victory, and today we can absolutely declare victory,” Bradley said. “We’re not seeing any issues of any significance.”

There have been some minor issues, such as positions that didn’t transfer exactly as expected or pricing issues, said Jessica Heffron, managing director of Advisor Services integration. There are some items that may be processing tonight, and the firm has reached out to impacted advisors.

But given the thousands of advisors and millions of client accounts involved in the transition, these errors were marginal and “very minor in the big picture,” Heffron said.

The firm isn’t out of the woods yet, as it still needs to prove that it can handle trades and reconciliation placed by former TD advisors. Things aren’t quite back to “business as usual,” Heffron added.

“For those advisors who previously did not work with us, this is a year of firsts,” she said.

One flub reignited an old concern about how Schwab’s retail brokerage business competes with financial advisors. An email welcoming TD Ameritrade Institutional clients to Schwab talks about trading and wealth management services without mention of the RIA that brought those clients.

This contrasts with previous emails sent to clients that emphasized a partnership between RIAs and Schwab, said Rene Bruer, co-CEO of Smith Bruer Advisors.

“The email is Schwab-centric and does not mention partner RIAs (like my firm) and our services to our clients at all,” Bruer said in an email. “Schwab has reiterated the fact that we’re working together towards the same end-goal for the past 18 months. This email is a direct affront to RIAs and that partnership. The email specifically highlights competing services (in the link) by Schwab to our clients.”

Bruer filed a formal complaint about the email with senior management at Schwab and was told that the email was sent in error to advisors who, like Bruer, had personal TD Ameritrade Institutional accounts that were part of the transition. Bruer confirmed that no clients received the email — just advisors at their personal emails.  

However, it illustrates the ongoing tension between the custodian and RIAs as the dust of the transition continues to settle.

“So far it’s been a lot of work in our part and also a lot of communication and guidance with clients. I’m sure that Schwab’s team has also been working hard too,” Bruer said. “From our perspective, Schwab was regularly communicating the process for the past 18 months and telling us all of the steps to get to this point.

“Everything seemed to be working okay until this email,” he added.

It’s not clear how many advisors received this email by mistake.

“A very small number of advisors received welcome emails from Schwab. These emails were not sent in error, but rather because the advisor had a personal retail account,” said a spokesperson for Schwab in an email. “We clarified this with advisors who had questions and confirmed that no communications were sent to the advisors’ clients.”

Editor’s note: This article has been updated to include a statement from Schwab about the welcome email some advisors received.

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2023-09-06 15:11:15

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