Charles Schwab to adopt TD Ameritrade’s trading, rebalancing tech

Charles Schwab announced Wednesday it will integrate TD Ameritrade’s thinkorswim and thinkpipes trading platforms, as well as iRebal, an institutional portfolio rebalancing tool, after closing its acquisition of its former rival. 

The discount brokerage plans to combine TD’s trading platform with its own platform, StreetSmart Edge, to provide a unified trading experience for clients, according to the announcement.

Schwab did not specify, however, if other TD technologies, like AdvisorClient, RIAConnect, and most notably Veo One, would be considered for integration. 

“The combination of our respective trading teams’ experience and capabilities with the advanced trading technology of thinkpipes will create an even more compelling offer for advisers when integration is complete,” said Bernie Clark, head of Schwab Advisor Services, in a statement. 

Schwab plans to retain the thinkorswim, thinkpipes and iRebal platforms, along with associated tools, as a part of the overall resulting technology platforms at Schwab after integration, according to a company spokesperson.

Still, it is unclear if combining TD’s trading tools into Schwab's platform means the products will remain standalone offerings, but it makes sense for the firms to keep TD’s active trader platforms separate and avoid migrating users from one platform to another amid the market volatility that is likely to last well beyond the integration of Schwab and TD, according to Aite Group’s head wealth management analyst Greg O’Gara.

To consolidate the platforms, in this current environment, would be too disruptive to their active trader clients, O’Gara said. “Users are entrenched into these platforms that are already well developed,” he said. “No one in a volatile market wants to change to a new trading interface.” 

Having more trading and rebalancing tools will only make Schwab’s portfolio of offerings stronger, he said. “With iRebal, thinkorswim and thinkpipes, I don't see any short-term or long-term reason to consolidate those individual tools, as each tool has a nuanced interface the clients are used to.”

While thinkorswim is tailored for retail traders, the thinkpipes platform provides advisers with additional portfolio management, risk analysis and the ability to place more complicated orders and options trades.

Schwab anticipates the integration of the three tech-driven products to take between 18 to 36 months after completing the acquisition, which is expected in the second half of the year. Once the deal closes, where and how clients of the two firms access their accounts, their pricing and who they contact for service or advice will remain unchanged until the account conversion process begins, according to the release. 

Schwab’s announcement to integrate TD's tech-driven trading and rebalancing tools comes just two months after it received approval from the Antitrust Division of the Department of Justice and stockholders for its $26 billion acquisition of TD Ameritrade.