A Historic Moment and Opportunity

Article

October 6, 2020

By Walt Bettinger, Chief Executive Officer

Today, Charles Schwab announced that we have closed the acquisition of TD Ameritrade - a historic moment for our employees, clients and industry. There has never been a combination in financial services quite like this. Together, our reach is now approximately $6 trillion in client assets, 28 million brokerage accounts and more than 5 million daily average trades*. By combining our firms, we are creating a company that is uniquely positioned to serve the needs of all kinds of investors and advisors at every step of their lives.

 

Chuck offers his views on the combined firm

Schwab & TD Ameritrade see the world through the same eyes -- our clients'

But the numbers tell only part of the story.

Schwab has never really had a desire to be large simply for the sake of size, and our founder and chairman, Chuck Schwab, has made that very clear over the years. He’s never tried to be the largest or the most profitable firm as a standalone goal. The goal is to be a strong company, a fortress for clients that they can turn to and have confidence in our integrity. If we’re constantly pushing ourselves to challenge the status quo, growth and profitability will follow.

Opens in popup+ Transcript

Chuck:  Chuck, do you want to be the biggest and most profitable? What do you want to be?

Chuck:  When I started, we were doing 50 trades a day. 50, all by hand with a pen and a pad. I knew instinctively that individual investors needed a better deal, that they were getting a raw deal from Wall Street. I certainly knew in my mind that we had a great business opportunity ahead of us. I'm sure Joe Ricketts felt the same way. We would study our competitors very, very carefully. Kept us fresh, kept us ambitious.

Young Chuck:  Fast service, big discounts, 24 hours a day, seven days a week. I'm Charles Schwab and that's the way I see it from the investor's point of view.

Chuck:  There are many times Ameritrade would come up with some interesting idea. I mean, my goodness, thinkorswim, I wish we had done that. It was always that “Can we leapfrog them?” and they would, I'm sure, say the same thing: "Can we leapfrog Schwab?" One of the earliest to online capabilities...

Man in Ad:  Buy, sell, do your research. I'll just call up a portfolio and the order has been placed in our host computer system.

Man in Ad 2:  Let's go to Ameritrade.com. Research it. All this stuff is provided for you, free of charge.

Man in Ad 3:  No cost.

Man in Ad 2:  Yeah. That's synonymous with free.

Chuck:  It was all about trying to help individual investors, better service, lower prices, faster transactions. Both companies had our freedom to take care of individual investors. In the early days, Merrill Lynch might've been $110 for a trade. And we've brought it down, all the way down. Finally, about a year ago, we were down to $5 and finally, I decided, "Let's go to zero." That's where it should be. Let's go to zero.

Chuck:  It would not have happened except for firms like Ameritrade and ourselves who pushed that envelope. I guess the beauty of being somewhat mature is to see. The most successful people I know are people who are doing something for somebody else. "Owning your tomorrow," is the way we express it or, "Transforming lives." It's the same subject matter. It's really about helping people and that has not changed. You're helping somebody and those are the most fulfilling of all jobs for my money.

Chuck:  This combination is historic. There would be no other company like the combination of the two companies coming together, individual investors and their independent advisors, total focus. There are other companies that might say, "We're like that also," but they're not.

It's the people at Ameritrade and the people at Schwab, we'll be independent. We won't be part of another company that has a different mission in life.

Chuck:  Chuck, you want to be the biggest, the most profitable? What do you want to be? The merger today is not about being the biggest. To me, it's about being the strongest, an unbelievable fortress of a company with the highest level of integrity. That's what you want to deal with. That's what we want to offer. That's who we are.

Close

Article continuation

The other part of the story is one that is over 45 years old and isn’t going to change despite our increased size: we will not change who we are. We are a challenger company, and that has nothing to do with size, history or background.

Being a challenger is a mindset to constantly push for change that leads to better results or outcomes for our clients and employees – as well as better long-term results for our company. Many challenger decisions provide immediate benefit to clients, but the rewards for our company and stockholders unfold further in the future. That long-term perspective and willingness to sometimes disrupt our own business are key to being a challenger.

Walt quote

"Being a challenger defines who Schwab is as a company. That’s who Schwab was when it was a tiny startup with Chuck in the 70s, and who Schwab will still be after completing this acquisition."

-Walt Bettinger, Chief Executive Officer, Charles Schwab

Article

In the face of the economic uncertainty caused by the COVID-19 pandemic, investors everywhere are putting their trust in us to help secure their financial futures. I am confident that Schwabbies, including our new TD Ameritrade colleagues, are committed to and will deliver on our shared mission.  I can’t wait to see what we will achieve together.

 

*Total client assets based on combined data for Schwab and TD Ameritrade as of August 31, 2020, using company reports; all other combined data as of June 30, 2020, calculated using Schwab’s methodology.

1020-028W