Charles Schwab, TD Ameritrade deal reports prompt analyst questions - Business Insider

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Here's where analysts think E-Trade fits in after reports of Charles Schwab-TD Ameritrade deal talks — and why wealth is the next battleground post-broker wars

would negatively impact quarterly revenue by $90 million to $100 million, or around 3% to 4% of total net revenue.an even bigger impact from the decision, at $220 million to $240 million of quarterly revenue, or about 15% to 16% of total net revenue.

He added that now the "only real differentiator" will be customer service — like assisting customers with account issues digitally or over the phone — for those clients. In a note to clients on Thursday, Brennan Hawken, an analyst at UBS, said E-Trade "looks the most vulnerable," and that it's been "left out in the cold." Investors have long predicted it would be acquired, he told Business Insider in a later interview, and they now see less clearly who might be a potential suitor for the broker.

There are other sources of revenue that are available to discount brokerages, including so-called payment for order flow from routing customers' trade orders to third-party firms to execute as opposed to going directly to exchanges.

 

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