In November 2019, Charles Schwab announced its acquisition of TD Ameritrade for $26 billion. The deal closed a year later.
So, for the past three years, Charles Schwab has been integrating TD Ameritrade into its business, including the well-regarded Thinkorswim trading platform.
Thinkorswim has web versions as well as desktop and mobile apps. Its roster of trading tools and features differentiates it from Schwab's online brokerage.
Those are just a few of the offerings that put Charles Schwab on IBD's 2024 list of the Best Online Brokers. It has been named an IBD Best Online Broker for 12 consecutive years — every year the survey has been conducted. Schwab customers lauded the company for its trade execution speed and prices, customer service, research tools and educational resources.
Schwab is joined atop the Best Online Brokers list by Ally Invest, part of Ally Financial, as well as Fidelity Investments and Merrill Edge. Merrill is a part of Bank of America.
See The Full Special Report on IBD's 2024 List Of The Best Online Brokers
TD Ameritrade Deal Integrates Millions
James Kostulias, Schwab's head of trading services, helped manage the integration, which he says is about 90% complete. Previously, he ran two other acquisitions: TD Ameritrade's purchase of Thinkorswim in 2009 and TD Ameritrade's deal for Scottrade in 2016.
"The size and scope of this one stands out," said Kostulias, referring to Schwab's TD Ameritrade acquisition. It involves blending about 17 million TD Ameritrade accounts with about 18 million Schwab accounts.
For Kostulias, the key to a seamless integration is to "look at it through the client's eyes" and identify the best resources that the combined company can offer. Then, invest the time, energy and money to capitalize on those resources and make them stronger and more useful.
Charles Schwab Invests For Growth
Charles Schwab realized the value of Thinkorswim and invested in its growth. When complete, Schwab expects the TD Ameritrade integration will cost more than $2.4 billion, in part to ensure the stability and reliability of its online order execution speed and quality.
"We're primarily using TD Ameritrade's core order management systems," he said. "Now about 98.6% of our orders get price improvement and our average order execution is .02 seconds, which is about as good as it gets in our business."
Schwab customers rated it highly in the best brokers survey category for trade execution speed and price.
Traders Talking To Traders
Schwab's online brokerage seeks to serve a wide audience, from first-time stock buyers to sophisticated options traders. Its 24/7 customer support is set up to serve the company's diverse clientele.
Advanced traders expect specialized service from knowledgeable experts. So, Schwab hires a mix of former traders who worked in the Chicago trading pits as well as newcomers who shadow their more experienced colleagues.
"Our contact center is a blending of seasoned, ex-floor professional traders with associates from other backgrounds, including many we hire out of school," Kostulias said. "We try to segment our contact-center team so that we have the former floor traders talk to those clients who are the most sophisticated traders. We call it 'Support for Traders, by Traders.'"
Overall, Charles Schwab's customer service organization employs about 6,500 people. Schwab trains new hires through instructor-led programs, online self-study, live webcasts and in-person educational sessions.
Charles Schwab: Emphasis On Education
The TD Ameritrade deal means that Schwab's online presence requires expanded capacity to serve millions of newly acquired clients. That includes its new trading experience, Schwab Trading Powered by Ameritrade.
"We see incredibly high login numbers," Kostulias said. Charles Schwab tallies between 1.5 million and 2.8 million logins per day, he says.
A key driver is Thinkorswim with its PaperMoney trading simulator. This lets investors test strategies and place simulated trades without wagering actual money. The platform's emphasis on education includes chat rooms for clients to share ideas and best practices.
Thinkorswim also offers analytic tools and customization capabilities. Specifically, its proprietary programming language, ThinkScript, enables clients to build their own order entry. Strategic testing algorithms see how different scenarios could play out.
Schwab has also harnessed Thinkorswim's extensive digital library of content to enhance client education. From online courses to podcasts to live events, the company offers a range of resources. Integrating TD Ameritrade created more pathways for clients to learn, test their knowledge and connect to coaches through interactive webcasts.
