In 2004, I had a good job with a bank, which was acquired by another bank, which was then acquired by yet another bank.  It is disconcerting and confusing for the staff, of course.  Employees of an acquired company invariably expect a “housecleaning.”

Yesterday, Schwab announced it was acquiring TD Ameritrade (TD), subject to various approvals.  Since TD acts as custodian of the assets of my clients, it is normal to wonder how they might be impacted by such an acquisition.

First, this acquisition reflects a changing industry in a changing economy.  The cost burden of technology plus the consumer demand for ever-cheaper prices force more and more consolidation.  Zero trade commissions have been an earthquake for that industry and might cause a “dumbing-down” as service suffers?

Second, TD is merely a vendor, not an employer.  If we want to fire TD tomorrow, we can.  Before retaining any custodian years ago, I studied the alternative providers and judged TD was just the right size to provide my clients both the security and technology services they need.  Once the merger-smoke clears, it will be time for another evaluation.

Third, the worst case for clients is that they may need to sign new paperwork and learn a new website, which is a small price to pay for a good custodian.  While my clients are always my ultimate concern, my immediate concern is for the good employees of TD Ameritrade, who might be “cleaned-out” by Schwab.

Lastly, this acquisition is far from certain and subject to various regulatory approvals, so it is way too soon to be concerned.  Don’t worry, I’ll keep you posted!