Charles Schwab’s acquisition of rival TD Ameritrade just cleared a major hurdle by securing the blessing of the Department of Justice’s Antitrust Division, according to a news release Thursday morning. The planned merger, announced in November, would add to Schwab’s heft as a major discount brokerage, but it would also create a huge custodian to independent financial advisors. Custodians hold the assets of RIA firms’ clients, execute trades for them, and provide advisors with important technology. Observers have said for months that the key antitrust concern surrounding the merger was the combined firms’ dominance in the custody business, not their discount brokerage operations. Along with Fidelity and BNY Mellon’s Pershing, Schwab and TD Ameritrade make up the “big four” custodians, and Cerulli Associates has estimated the merged company would have a majority—51%—of RIA assets. A related concern was that smaller RIAs, a key market for TD Ameritrade, would not receive sufficient attention from Schwab, which had a reputation for focusing on RIAs managing assets over $100 million. Schwab has taken steps to reassure smaller advisors, however, including hiring a former TD Ameritrade executive to oversee custody for firms with less than $100 million in assets.
I think it’s the opposite of the way I want it. Fragmented markets, darkpools; order flow selling, ridiculous overpriced data, hundreds of obscure order types.... I wonder what it was like back in the days of trading in eighths, call your broker to place an order, figure out position at end of day. Sounds a lot simpler.
As a kid, in my local home town broker (who has a seat on the Pacific Stock Exchange) had a smiley face or a frown in his window, depending where the Dow Jones Industrial Average was for that day!! Talk about advanced...
simpler but less liquidity and much more expensive to transact a trade. If you want simpler do it in your own life by adopting the principle of KISS.("keep it small and simple", or "keep it simple, stupid)