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

Featured video

INTV

FPA's Shannon Pike: What's next for the financial advisory profession?

As we head toward 2019 and beyond, regulation and compensation will continue to dominate the headlines. Shannon Pike of the FPA explains.

Latest news & opinion

LPL rolls back recruiting policy aimed at driving more assets to its corporate RIA

LPL erases $50 million hurdle for new advisers to join so-called hybrid firms.

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

10 states with the most college student debt

Residents of these states have the most student debt when you consider their job opportunities.

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.

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