Schwab Gets It Done

By Joel Bruckenstein, CFP

After almost three years of fending off naysayers, Schwab has completed the transition of over 3.6 million RIA managed accounts on the TD Ameritrade platform to the Schwab platform while simultaneously moving another 3.6 million retail accounts. This move was by far the largest transition of its type in the history of the independent RIA history, and it was the smoothest to boot.

The financial advisor press, including yours truly, voices some initial skepticism that Schwab would be able to pull this off so smoothly, however, as time progressed, it became clear or me at least, that Schwab was committing the money and resources to ensure a smooth transition.   

Although Schwab declared victory yesterday, on a press call, there still remained one hurdle to pass. That was passed last night or early this morning when they were able to generate all of the necessary daily data files to advisors and the third parties that serve them on schedule. 

We are all quick to criticize Schwab and some of the other large providers in the industry when they screw up, so it is only equitable that we are equally generous in our praise when they get things right. Let’s be clear: This was an enormously large, complex task. To achieve it with the level of success that we’ve just witnessed, it is very impressive.

The industry also owes a collective “thank you” to all of the third parties that receive Schwab data on behalf of your firms and that process it for you. The list of firms that are processing Schwab data is too long to list here, but it includes every firm dealing with portfolio accounting on your behalf, many of the account aggregators, as well as a host of others. They have, from the reports I’ve received, done outstanding work as well. 

Bernie Clark deserves a great deal of credit for this transition. He hired Tom Bradley, the well respected former head of the RIA division at TD Ameritrade who is trusted and liked by the advisor community. Tom had some experience with transitions in the past that went less well than this one, and I’m sure his experience was instrumental in getting this one right. I have no doubt that other former TD Ameritrade folks including John Tovar and Jon Patullo also played a role. Schwab also has a deep bench of experienced folks who gave it their all to make this work. 

I suspect that there will be more good news for Schwab advisors coming soon. Now that the firm has freed up the resources that they have been devoting to the transition, my expectation is that they will devote some of those resources to continued innovation to support the RIA community. With many competitors new and old looking to provide RIA custody, Schwab will need to stay on their toes to continue their success. 

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