Business Strategy and Outlook| Michael Wong, CFA, CPA |
We assess that a combined Charles Schwab-TD Ameritrade is a financial sector powerhouse that will be able to compete in an environment where traditional industry lines have increasingly blurred. The combined firm had over $7 trillion of client assets as of the end of May 2022, which compares favorably with the largest wealth managers, asset managers, and banks. In addition to its pure scale and efficient business model, both companies have a history of adapting to new sector trends, so we are confident that together they will be a key financial sector player over the next decade. With expense synergies to be realized over the next two years and much of the revenue synergies tied to the gradual movement of client cash from Toronto-Dominion Bank to Charles Schwab, the combined firm should experience a prolonged earnings tailwind.