Consolidation in the World of Discount Brokers
On November 21, 2019, CNBC and Fox Business both broke the news that Charles Schwab Corp. formerly announced their intention to pursue an acquisition of TD Ameritrade Holdings (the custodian for Noble Wealth Partners) for $26 billion. Charles Schwab is currently the largest discount broker in the nation and TD Ameritrade is the second largest. If this acquisition occurs, it would create a brokerage behemoth managing over $5 trillion of client assets. But what does this mean to you?
Understand that Noble Wealth Partners is a Registered Investment Adviser and we do not work for TD Ameritrade or Charles Schwab. At any point, if we feel this potential acquisition could hinder our clients’ ability to achieve their financial goals - we will find another custodian to do business with. It is that simple. You do not need to read any further if you are not interested in this news, or, if this is all you needed to know.
At the inception of Noble Wealth Partners, our firm conducted an analysis of potential custodians we wanted to hire. If you are unfamiliar with the term, according to Investopedia a custodian is a financial institution that holds customers' securities for safekeeping in order to minimize the risk of their theft or loss. A custodian may also provide other services such as: security trading, client onboarding, clearing, reporting, billing, and many other services not listed above. Our firm chose to use TD Ameritrade as our custodian due to their strong position amongst brokerage firms, exceptional trade execution, technology, and customer service. We have been pleased with TD Ameritrade and we do not believe the acquisition would significantly change our experience, or yours (if it occurs).
Noble Wealth Partners is free to do business with multiple custodians. If it’s possible our clients’ needs are better met outside of TD Ameritrade, Charles Schwab (or the name of the combined firm), you can rest assured that we would begin the process of working with another custodian. Even in that scenario, we would continue to use TD Ameritrade as a custodian while giving our clients the option of using another custodian, if they prefer.
Like all our business matters, we will be transparent as this story develops. Until then, we encourage you to reach out to us with any questions or concerns.
Sincerely,
Your team at Noble Wealth Partners
