Schwab to Integrate thinkorswim Platform into Trade Offerings

Charles Schwab SCHW announced that following the acquisition of TD Ameritrade Holding Corporation AMTD, it will integrate the thinkorswim and thinkpipes trading platforms, and educational resources into its offerings for retail clients and independent advisors.

Notably, on Jun 4, Schwab’s all-stock deal to acquire TD Ameritrade for $26 billion received consent from the U.S. Department of Justice (“DOJ”). In fact, with more than 99% of votes cast in favor of the deal, shareholders of both the companies have already approved the transaction, which is expected to be completed in the second half of 2020.

Post deal closure, the integration is expected to take 18-36 months.

In light of its plans of integrating the award-winning platforms, Barry Metzger, senior vice president of Trading Services at Schwab, stated, “Our plan to adopt the thinkorswim suite of products and educational resources reflects its status as one of the strongest retail active trader platforms in the industry. For users of Schwab’s StreetSmart Edge platforms, there is no change. As we look ahead, we intend to thoughtfully combine the great capabilities, tools and service at both firms to provide a unified, world-class trading experience for clients.”

Bernie Clark, the executive vice president and head of Schwab Advisor Services, said, “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 advisors when integration is complete.”

Per Schwab’s plans, TD Ameritrade Institutional’s customizable portfolio rebalancing solution, iRebal, will be retained and offered to independent advisor clients.

The executive vice president of Schwab’s Integration Management Office, Jason Clague, said, “These decisions demonstrate Schwab’s dedication to continually innovating and enhancing the experience for our clients. We will keep clients informed as plans take shape and the integration process unfolds in the months ahead.”

Notably, the TD Ameritrade deal is expected to result in substantial strategic benefits for the combined firm. Also, clients of both Schwab and TD Ameritrade will benefit from enhancement of “investing and trading experience”.

Schwab has been taking several inorganic growth initiatives for the past few months. These are expected to further strengthen its position as a leading brokerage player and be accretive to its earnings. Moreover, its efforts to augment trading revenues will likely continue boosting profitability.

Shares of Schwab have lost 28.1% so far this year compared with the industry’s decline of 12.5%.

Currently, the company carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the same space are mentioned below.

ETRADE Financial Corporation ETFC witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has risen 21.7% over the past year. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Interactive Brokers Group, Inc.’s IBKR current-year earnings has been revised 12.7% upward over the past 60 days. Its share price has increased 8% over the past 12 months. The company currently carries a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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