E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million

Oct 19, 2017 @ 6:00 pm

By Mark Schoeff Jr.

E*Trade said Thursday it is buying Trust Company of America for $275 million in cash.

Josh Pace, president and chief executive of Trust Company of America, said in a letter to the firm's investment-adviser clients that the transaction will close by the end of the second quarter of 2018.

"E*Trade brings a lot to the table," Mr. Pace wrote. "We believe the resources and depth of this industry-leading organziation will aid our continued growth, innovative technology, and the world-class service you and your clients have come to expect."

Established in 1990, TCA is an independent custodian with $17 billion in assets that provides technology and custody services for about 180 registered investment advisers on its platform. It has carved out a niche among RIAs while competing against larger custodians, such as Schwab, Fidelity and TD Ameritrade.

In his letter, Mr. Pace said that the he will continue to head TCA and that its "service model...[and] fee structure will not change."

E*Trade will bolster TCA's technology offerings, he said.

"This new chapter of our company will be filled with many opportunities to enhance our technology and grow our company, while maintaining our values and company culture," Mr. Pace wrote.

The purchase of TCA will help E*Trade strengthen its position in the investment-advice sector, said E*Trade chief executive Karl Roessner.

"Their superior technology solutions in the RIA space are a natural complement to the cutting edge digital experiences we offer to retail investors," Mr. Roessner said in an earnings statement on Thursday. "Beyond the ability to offer enhanced services to certain segments of our client base, we are confident that the extension of the E*TRADE brand will provide the TCA team with some additional firepower to accelerate growth."

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Why broker-dealers are on a roll

Deputy editor Bob Hordt and senior columnist Bruce Kelly discuss last year's bounce-back for IBDs.

Latest news & opinion

UBS continues to cut loans to recruits, while increasing compensation to brokers

The wirehouse reduced recruitment loans 20% and increased bonus loans 68% in the first quarter.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print