Schwab plan to purchase TD Ameritrade will be boon to fortunes of both companies

Schwab plan to purchase TD Ameritrade will be boon to fortunes of both companies
The transaction would create a firm with roughly $5 trillion in combined assets.
NOV 21, 2019
By  Bloomberg
Charles Schwab Corp.'s plan to buy TD Ameritrade Holding Corp. for $26 billion is proving a boon for the fortunes anchored by two of America's biggest brokerages. [More: Charles Schwab to buy TD Ameritrade for $26 billion, reports say] TD Ameritrade founder Joe Ricketts is set to add $400 million to his $2.4 billion net worth after his firm's shares rose 21% in Thursday. Charles Schwab's $8.8 billion fortune will increase by about $500 million based on his company's gains. The deal is worse news for Thomas Peterffy, chairman of rival Interactive Brokers Group Inc., whose net worth was down about $100 million at 11:50 a.m. in New York. [Recommended video: Carrie Schwab-Pomerantz: Power of creating financial accessibility The transaction could be announced as early as Thursday, according to a person familiar with the matter. It would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated when Schwab last month announced plans to eliminate commissions for U.S. stocks, exchange traded funds and options. The combination may pose a threat to fund managers such as Vanguard Group Inc. and BlackRock Inc., according to Bill Capuzzi, chief executive at Apex Clearing, a custodian that focuses on fintech firms. "It signals Schwab is going to continue to lean really hard into the advisory side," he said. "A gigantic percentage of the advisory world will be leveraging one firm for passive custody and clearing services." [More: Schwab's next target? Financial advisers] For Schwab, the net worth gain may be particularly sweet. In an October interview, he criticized wealth taxes like those proposed by Democratic presidential candidates Bernie Sanders and Elizabeth Warren as a "negative reward for success." Other winners from the potential acquisition include Toronto-Dominion Bank, which owns 43% of TD Ameritrade, and Canadian insurer Sun Life Financial Inc. with a 3.9% position as of Sept. 30. Generation Investment Management, the firm co-founded by former Vice President Al Gore, owned a 2% stake in Schwab at the end of the third quarter. Register nowfor our ESG & Impact Forum at the U.N. on Dec. 5.

Latest News

Trump announces auto tariffs with 'no exceptions' and markets got spooked
Trump announces auto tariffs with 'no exceptions' and markets got spooked

Expectation of the Fed staying on hold for longer is also rising.

How much do American teens really know about money?
How much do American teens really know about money?

Spoiler Alert: Not as much as they need to, report reveals.

BlackRock's Boivin expects US stocks performance rebound
BlackRock's Boivin expects US stocks performance rebound

Investment Institute head says European stocks gains will be short-lived.

Robinhood to offer private bank, enhanced wealth management
Robinhood to offer private bank, enhanced wealth management

Trading app to add new services in collab with banking partner.

Hedge funds buy the dip in cyclical funds
Hedge funds buy the dip in cyclical funds

Banks, energy companies among investors' targets.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve