My Review of the TD Ameritrade and Schwab Merger, #168

Retire With Ryan

The merger of TD Ameritrade Brokerage and Charles Schwab Brokerage, now known as Schwab, has been completed! And in this episode, I want to provide my insight into how the merger went. I’ll also share some of the issues I and other clients have found since the merger solidified.

You will want to hear this episode if you are interested in...

• Unpacking the merger between TD Ameritrade and Charles Schwab [1:38]
• Where have my spouse’s accounts gone? [3:38]
• Issues with tax withholding [6:06]
• Using caution before changing beneficiaries [9:21]
• Better notifications for financial planners [10:30]
• Final thoughts on the merger [12:40]

And then there was one

The merger between TD Ameritrade and Charles Schwab was completed over Labor Day weekend of 2023. Overall, I think it went pretty well, considering I didn't have any clients whose accounts didn't transfer over, and there are zero missing funds. However, in the weeks following the merger, we found several issues that we were not made aware of before the merger.

The joining of these two institutions to form Schwab has been in the works for two years. In that time, my team and I have attended numerous conference calls and webinars to see if this merger would be the right fit for our clients. We even decided to use Schwab for all new clients so we could learn their system. And while we are quite comfortable using the Schwab Advisor Center, there are still a few outstanding issues we need to navigate.

Working out the kinks

Clients who are new to Schwab can access their account online through the Schwab Alliance platform. However, the first issue we've encountered is clients being unable to see their spouses’ or partners’ retirement accounts through the portal. While you can’t have a joint retirement account, TD Ameritrade allowed clients to sign a form to gain access to their partners' accounts. Oddly enough, Schwab didn’t honor this arrangement at launch, leaving clients to believe everything didn’t transfer correctly. Thankfully it’s an easy fix, but it left many people understandably startled.

Another issue we’ve encountered with Schwab has to do with their tax withholding settings. It’s always my goal as a financial planner to ensure clients pay what is required in taxes without giving the government an interest-free loan by overpaying. TD Ameritrade had multiple options for withholding amounts, while Schwab seems to only have two for state income tax: 0% or the maximum 6.99%. This leaves clients either owing money or subsidizing the government. I’m actively petitioning Schwab for answers, and I will keep you posted. Listen to the episode for more on the Schwab merger!

Resources Mentioned

• Retirement Readiness Review
• Schwab Client Login

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