Change is Hard.
The transition from TD Ameritrade to Charles Schwab:
You are driving down the road past the bank that you have worked with for years but now it has a new sign out. You were told this change was coming. You are hopeful that the new company will provide even better service than what you experienced in the past based on the wonderful ads you see on TV and in newspapers.
When you go into your bank different people are behind the teller desks. This new bank has different processes and procedures for doing almost everything you knew how to do before. This can be a very disappointing and frustrating time. You did not ask for a change, but change was forced upon you.
The transition from TD Ameritrade to Charles Schwab was not something that we chose at Stewardship Advisors. This change was the result of Charles Schwab buying TD Ameritrade. As the president of Charles Schwab, Rick Wurster, said at a recent conference we attended, “TD Ameritrade was one of our toughest competitors and so we bought them.”
The banking industry has experienced high levels of consolidation in the last 40 years. In fact, 40 years ago, there were 14,496 commercial banks in the United States. By the end of 2022, that number was down to 4,136, according to the FDIC. The same phenomenon applies to investment Custodians. Similar to a bank, the Custodian is the company responsible for holding the assets and investments and doing the accounting for the accounts. According to a Cerulli Report, 84% of all Registered investment adviser assets are custodied by the four largest custodians.
Stewardship Advisors does not represent a custodian, and we have the freedom to select the custodian who will best serve our clients. 9 years ago, we conducted due diligence, research, and analysis of the custodian options available for our clients’ investments. We focused on selecting a custodian that would provide the best service and experience to our clients. It came down to TD Ameritrade and Schwab. We selected TD Ameritrade as the “bank” for our client’s assets, and we had a positive experience working with TD Ameritrade for many years.
We then received notice that TD Ameritrade was purchased by the largest custodian, Charles Schwab. Charles Schwab subsequently transitioned all TD Ameritrade’s assets to Schwab’s custody on Labor Day, 2023.
Did I mention that change is hard? Following this transition, many advisors have acknowledged problems with the Schwab system, us included. When your stated goal is to provide the highest level of service to our clients anything that gets in the way of providing that service, it can be very frustrating.
We are evaluating if these difficulties are just a result of change, and we will adjust or if what we’re seeing is a systemic problem. The most important thing to us is to be a buffer from problems and make our clients’ financial lives as easy as possible to manage.
You can be assured we will keep you informed and updated of progress and changes if any should be made.
Lee Shertzer
Managing Partner
Schedule an introductory phone call with Lee at this link: Lee Shertzer – Introductory Phone Call
Like this article? Check out our Personal Finance Archives where we’ve compiled helpful articles to help you plan for life’s transitions.
