What Advisors Should Know About the Schwab-TD Conversion

Charles Schwab’s managing director of Advisor Services Integration, Jessica Heffron, spoke with RIA Intel about what advisors can expect in the coming weeks.


Illustration by RIA Intel

Over Labor Day weekend, Schwab Advisor Services will transition more than 7,000 independent advisory firms representing nearly 4 million client accounts from TD Ameritrade to the Schwab platform.

While the bulk of account transfers will happen this weekend, Schwab said it will continue to transition TD Ameritrade client accounts through the first half of next year and that the TD Ameritrade brand name isn’t going away just yet.

Charles Schwab first announced it was planning to acquire TD Ameritrade in November 2019 for $26 billion and got final approval for the deal from the Department of Justice in June 2020.

Since then, the two companies have gone through their ups and downs with reported complaints about service and growing custodial competition.

Last week, the company announced in its regulatory filing that it planned to cut jobs and downsize some of its corporate offices in a bid to reduce operating costs.

Jessica Heffron, managing director of advisor services integration at Schwab, answered questions from RIA Intel via email about what advisors should expect from the company moving forward.

Answers have been edited for length.

What should advisors know about the conversion taking place this weekend?

After the conversion, advisors from both platforms will enjoy the full benefits of our combined offer, a custodial platform of the future designed to help RIAs of all sizes grow and succeed.

Schwab Advisor Center will incorporate Veo One’s most popular features and functionality, and Ameritrade advisors will have access to the breadth of Schwab’s offer, including Schwab Charitable and Schwab Bank. Meanwhile, legacy Schwab platform advisors will gain access to TD Ameritrade’s industry-leading trading tools — thinkpipes, iRebal, and Model Market Center.

Additionally, advisors will have access to more than 23 API third-party technology solutions integrated with Schwab Advisor Center. All third-party vendors have received support and preparation for the transition. Advisors should be able to quickly reconnect all their third-party integrations through a simple login and one-time reauthentication process on September 6.

Is there anything that advisors should do this week to prepare?

If advisors have not recently logged into the Schwab Advisor Center, we recommend they do so with their credentials before end of day Friday. Beyond that, much of the preparation has already taken place.

For the last several months, advisors have been active and engaged to prepare for the conversion weekend. In fact, more than 98 percent of firms have taken steps to prepare for the transition. Over 90 percent of transitioning firms have already set up credentials on Schwab Advisor Center, over 20,000 Veo One users have accessed Schwab Advisor Center, there have been more than 46,000 average daily sessions on Schwab Advisor Center, and over 60,000 individuals from more than 5,000 firms to date have attended at least one educational webinar session.

Leading up to conversion, we provided a broad, multichannel range of both on-demand and hands-on guidance, including detailed communications, a downloadable Transition Planning Guide, and an RIA Ed Center. We’ve hosted a number of client events, including integration webcasts, office hours webcasts, virtual, and in-person SOLUTIONS client conferences, and focused integration sessions at IMPACT last year. Additionally, TDA advisors have had access to Schwab Advisor Center since June 21 in order to have time to explore and familiarize themselves with our technology well ahead of the transition.

What happens after this weekend?

Once all client accounts and assets transfer to Schwab, as of September 5, advisors can begin doing business on Schwab’s platform. If they have not already, clients of advisors will be invited to set up credentials for the Schwab Alliance client portal.

To assist advisors with any potential questions or challenges, we’ve prepared for this moment by hiring aggressively over the past year to fill out service and operations staff. We are prepared if there is an increased volume of service calls, and our teams are trained on the combined company platform. We’ll be working to address all calls as quickly as possible, and we’ve invested in technology that helps route calls to the right person faster for better service.

What are some of the changes clients and advisors that were with TD Ameritrade can expect going forward?

Over the last three years, we’ve made significant investments in the Schwab Advisor Center user experience, including UX design enhancements, 100 percent digital onboarding, eAuthorization, and Move Money redesign.

Transitioning advisors will have access to iRebal and thinkpipes as of September 5, and we will roll them out more broadly to all advisors on our platform through the remainder of 2023. Schwab Advisor Center will incorporate Veo One’s most popular features and functionality.

End client accounts for TDA advisors have all been created on the Schwab BD and will serve as the foundation for all conversions.

You said last year at the Impact conference, that functionality on the platform will be limited during this transitory period and likened it to building a house. Has the house been built, and should advisors expect any issues or limited functionality going forward?

What we told advisors last year is that we were taking a careful and thoughtful approach to combining our two custody platforms. As part of that process, Schwab over this past summer built an exact replica of their firm as it exists on the Ameritrade platform. To continue the analogy, Schwab completed the movement of data from Ameritrade to their “new home” on the Schwab platform.

We also invited transitioning advisors to log on to Schwab Advisor Center and explore our platform starting June 21, so that they are better prepared to do business after their firm’s transition. When advisors go to work on the morning of September 5, they should be able to conduct business as usual with no major disruptions.

Following conversion weekend, our work will not stop. We will continue to invest in a wide range of products, solutions, and technologies and we’re always working to improve the advisor experience and listening to their feedback.

For advisors and clients with TD Ameritrade, how long will essential activities be available this week? When should they have access to it once again?

All essential activities will be available on the Schwab platform for advisors and clients on Tuesday, September 5. We have communicated all cutoff dates for activity on Veo One to transitioning advisors.

Is TD’s name and branding officially retired after this weekend?

The answer to your question is ‘No’. The TD Ameritrade name and brand will not be retired immediately after the Labor Day weekend, as Schwab will continue to transition TD Ameritrade client accounts through the first half of next year. As we have announced previously, the TD Ameritrade brand will eventually be retired in the marketplace.

TD Ameritrade was known for serving smaller advisors. Some advisors have expressed concern that’s no longer the case and other custodians have entered the space focused on these smaller advisors. Has TD’s commitment to smaller advisors been adopted by Schwab or are you focused on a specific demographic of clients?

Schwab has long prided itself on its ability to serve RIAs of all sizes, and our combined platform includes “best-of-both” technology to benefit all advisors. Prior to integration, more than half of Schwab Advisor Services clients were firms with less than $100 million in AUM. Now, 80 percent of advisors on our platform are firms with $300 million or less in AUM.

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