Thinkorswim Sunk Now That Schwab Owns TD Ameritrade?

Charles Schwab (SCHW) closed its purchase of online brokerage rival TD Ameritrade (AMTD) Tuesday. But there’s a big question for traders: What happens to Thinkorswim?


Schwab plans to “integrate” Thinkorswim, TD Ameritrade’s popular online trading platform long used by traders, into its own tools for both retail and independent advisors. The plan was confirmed to Investor’s Business Daily Tuesday by Schwab spokeswoman Alison Wertheim.

“The specifics will come over time,” she said via e-mail, over what changes will come after the two online brokers combine. For now, the company’s statement on the combination and what it means for Thinkorswim goes back to a statement from Barry Metzger, senior vice president of trading services at Schwab in August.

“For users of Schwab’s StreetSmart Edge platforms, there is no change,” Metzger said. “As we look ahead, we intend to thoughtfully combine the great capabilities, tools and service at both firms to provide a unified, world-class trading experience for clients.”

The statement implies Thinkorswim will be baked into Schwab’s StreetSmart Edge platforms. It’s unclear what will happen specifically to Thinkorswim’s unique features with stock charting, investment screening, live financial TV and paper trading. But Metzger told IBD in January, Schwab is committed to remain a top online broker.

Schwab Folds In TD Ameritrade

Schwab’s aggressive more than $20 billion buy of TD Ameritrade, announced in November 2019, signals a big bet. The combined company is hoping to build up its dominance of the custodian business for independent advisors.

Many advisors hire TD Ameritrade and Schwab to hold customer assets. Advisors use both firms’ tools to manage accounts, build portfolios and trade stocks on behalf of clients. Schwab is also doubling down on offerings to provide advice to long-term investors directly itself, including automated robo-advisors.

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But what about the surge of individual investors who want to buy and sell stocks themselves, using time-tested rules?

Both Schwab and TD Ameritrade fill and process massive amounts of order flow. The combined firm has $6 trillion in client assets, 28 million brokerage accounts and fill more than 5 million trades daily.

But they’ve seen revenue from trading disappear as commissions dropped to zero in 2019. Meanwhile, startup brokerage app Robinhood has been winning over large numbers of younger customers who prefer to buy individual stocks.

What’s Next For Schwab?

Some hope Schwab isn’t doing away with TD Ameritrade’s trading tools, just picking the top parts of both. “They (Schwab) have said clearly that the combined platform will take the best of both platforms and that Thinkorswim would be among them,” said Stephen Biggar, analyst at Argus Research.

The most concrete detail is that changes and integration won’t happen immediately, but stretch out for 18 to 36 months. A TD Ameritrade spokeswoman referred comments to Schwab.

“I think it will be a rather slow integration as they make customers comfortable with the transition, and that any tools removed will be very carefully selected as being hardly used by clients,” Biggar said. “They have one shot to get this right and do not want to lose customers to other advisor custodians or retail brokers.”


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