|Power Score: 81.96||Momentum Score: 55.29 (9)||HQ: Westlake, TX||CEO: Walt Bettinger|
Valuation: $137.32 billion (+223% YoY)
Amt. Raised: n/a
Lobbying Spend: $2,690,000
Industry Orgs: SIFMA; BPI; FIA
Headcount: 22,739 (+9% YoY)
Engineering Headcount: 2,613 (+17% YoY)
Big Tech Experience: 1.0%
Open Roles: 890
R&D Spending: n/a
Patents Applied For: 10
Patents Owned: 103
Exec Team Exits: No
buying TD Ameritrade in 2020 was like the Los Angeles Lakers signing LeBron James. In both cases, an organization with a storied history attempted to reinvent itself through a big-name acquisition. Also in both cases, critics wondered whether the best days were behind the acquired party — LeBron proved them wrong, but the jury is still out on TD Ameritrade. Before the wave of online brokerage consolidation at the end of the 2010s, TD Ameritrade and Schwab were both often mentioned in the same breath as major market makers. But as trading models evolved, TD Ameritrade's heavier reliance on commissions ultimately put the company in a weaker position as the race to match Robinhood and trading's new faces in zero-commission trading concluded.
When the dust settled on the TD Ameritrade acquisition, Schwab had more than $5 trillion in assets under management, a number that's now in excess of $7 trillion. And, at the end of June 2021, the new-look Schwab's 32 million active brokerage accounts more than doubled the 14 million pre-deal number. That said, the integration has proven more costly — $2.2 billion compared to the initial $2 billion estimate — and on the longer end of the initial timeline projections. Still, when the two companies are fully integrated, the resulting infrastructure will allow for even more expansion as the company continues to be, as CEO Walt Bettinger says, "on offense" against the likes of Robinhood that look set to undermine its power.
In its summer business update, the company highlighted improved infrastructure as a goal while the company completes the TD Ameritrade integration, but the company has also had a push to diversify its product offerings, matching some of the upstarts that are looking to chip away at the behemoth. In June 2020, the company launched a fractional ownership product called Schwab Stock Slices to capitalize on a growing trend — especially among younger investors — that Robinhood, Public.com and the like took advantage of early.
Schwab is warming on cryptocurrency as an asset class, but is still mostly lukewarm as it waits for further SEC clarity about the regulatory environment. In April, though, Bettinger noted that clients' interest had been growing and that, if they do formally enter the market, they'll do so in a "competitive" and "disruptive" fashion. That said, the company published a Bitcoin FAQ in August where it reinforced its position that cryptocurrency wouldn't be the new global currency (not exactly going out on a limb there).
They Said It
"Being a challenger is a mindset to constantly push for change that leads to better results or outcomes for our clients and employees – as well as better long-term results for our company. Many challenger decisions provide immediate benefit to clients, but the rewards for our company and stockholders unfold further in the future. That long-term perspective and willingness to sometimes disrupt our own business are key to being a challenger." — CEO Walt Bettinger in an October 2020 LinkedIn post
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