Page 33 - Investment Advisor - December 2021

“We’re carefully reviewing some of the decisions around In October, John Tovar, managing director of wealth man-
the TD Ameritrade integration, because we want to ensure agement services for TDA Institutional, said Schwab was pre-
that we don’t take steps that would risk any further degrada- paring to bring TDA clients to its platform, and the completion
tion in our service quality,” he said. “As part of that, we’re of the integration of TDA into Schwab’s business was still on
examining locations that we might have previously thought track to be completed within 36 months.
we wouldn’t maintain” that Schwab may opt to keep open, “As far as the actual conversion date … when we will be
Bettinger said. moving the accounts and assets from TD Ameritrade over to
However, he was quick to add: “We remain as com- the Schwab platform, we’re still targeting that second half of
mitted as ever to saving the $1.8 [billion] to $2 billion of 2023,” he said.
expenses that would otherwise come from our combined
run rates” through the completion of the integration with
TD Ameritrade. Keith Patrick Gill, who had been registered as a broker with
This year, the “same three strategic initiatives are guid- MassMutual, drove video game retailer GameStop’s stock
ing our efforts,” Bettinger also said, noting they include price up early this year through his recommendations on
increasing scale and efficiency, which includes making con- Twitter and YouTube under the name “Roaring Kitty” and on
tinued progress on the TDA integration and adding new Reddit under the name “DeepF***ingValue.”
digital capabilities. In February, Massachusetts’ top securities regulator,
Only a few days later, Schwab disclosed it slashed another William Galvin, said he was looking into the actions of Gill
200 or so jobs as part of its ongoing integration with TDA. The in relation to the trading frenzy surrounding GameStop
job cuts are in addition to the more than 1,000 jobs that the and other stocks a
company already said it was eliminating across the two firms week earlier.
following the finalization of that deal. The trading frenzy
The latest job reductions are “part of our continuing efforts caused headaches
to reduce overlapping or redundant roles across the two for several firms. A
firms,” a Schwab spokesperson explained at the time. The class-action lawsuit
company did not specify how many of the jobs cut were at filed Feb. 4 in U.S.
Schwab vs. TDA. Nor did it specify what departments the cuts District Court for the
were made in. Northern District of
In March, Schwab said it was dropping the TDA Retirement California alleged
Plan business that serves RIAs and integrating it into the that brokerages,
Schwab Retirement Network for Advisors. fund companies and
A few days later, Tom Bradley, a senior vice president at clearinghouses “con-
Schwab and head of TD Ameritrade integration, said the com- spired” to prevent retail investors from buying stocks like
panies were “aggressively” hiring advisor service staff to keep GameStop, thereby “stripping them of their rights to control
up with the heavy trading volumes seen in recent months. their investments.”
In April, Schwab disclosed it started the process of integrat- The brokerages named in the suit included Robinhood,
ing the Schwab and TDA advisor referral networks as part of Schwab, TDA, Interactive Brokers, Morgan Stanley, E-Trade
an initiative that would result in a decrease in the number of and Ally Financial; the clearinghouses named included Apex
participating RIA firms to 175 from 298. TDA’s AdvisorDirect Clearing Corp. and the Depository Trust & Clearing Corp.;
referral program was being integrated into the new Schwab and the fund firms named were Citadel Securities and Melvin
Advisor Network, Schwab said. Capital Management.
At the same time, Schwab said the total revenue synergies of That same month, Gill and Robinhood Markets CEO Vlad
the merger with TDA would reach $4.3 billion to $4.8 billion, Tenev testified before the House Financial Services Committee
up $800 million from Schwab’s original estimate. on the Reddit GameStop Squeeze.
In May, Schwab eliminated more jobs at TDA, includ- “Robinhood Securities put… restrictions in place” on cer-
ing at least three of its executives, as part of the ongo- tain stocks “in an effort to meet increased regulatory deposit
ing integration of the two firms, an industry source told requirements, not to help hedge funds,” Tenev told members of
Investment Advisor. In July, Schwab eliminated more jobs the House Financial Services Committee.
at TDA, including at least another two of its executives, as Although he was registered as a broker with MassMutual,
part of the ongoing integration of the two firms, according according to his report on the Financial Industry Regulatory
to the source. Authority’s BrokerCheck website, Gill told lawmakers that in

DECEMBER 2021 INVESTMENT ADVISOR 31