Schwab announced last November it would buy rival broker TD Ameritrade in an all-stock deal valued at $26 billion. The merging of the two biggest publicly traded discount brokers will create a mammoth with more than $5 trillion in client assets, $3.8 trillion from Schwab and $1.3 trillion from TD Ameritrade.
While some Wall Street analysts are worried the consolidation of two of the biggest players could flag antitrust issues, the company will only capture about 11% of client assets in the retail financial services market, Schwab said at the time the deal was announced.Consolidation in the brokerage industry was expected given the massive amount of disruption that has taken place, with all the major brokers dropping commission fees at the end of last year.
Charles Schwab CEO Walt Bettinger said in an earnings release the broker saw "monumental volumes" of trading from the 609,000 new broker accounts added in the first quarter, with over 280,000 in March alone. TD Ameritrade said last month that retail clients opened a record 608,000 new funded accounts in the first quarter, with more than two-thirds of those opened in March.
The broker industry's next approval will be Morgan Stanley accusation of E-trade, which isn't expected to flag any antitrust issues, analysts tell CNBC.for exclusive insights and analysis, and live business day programming from around the world.
This deal will put pressure on Fidelity and other large trading platforms to either merge or expand their services. Otherwise, competitors won’t be able to compete in terms of economies of scale. Marketing Business Stanford
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