Scottrade customers may be seeing changes to the discount brokerage services they receive,such as higher fees,by the end of September 2017,as TD Ameritrade,America's largest discount brokerage by trade volume,purchases the privately held Scottrade Financial Services for four billion dollars.In turn,TD Bank,Toronto Dominion Bank's US subsidiary,will then buy Scottrade Bank for 1.3 billion.
TD Bank owns nearly 42% of TD Ameritrade.*
Although based in St.Louis today,Scottrade derives its name from the fact that it was founded in Scottsdale,Arizona.Founder and CEO Rodger Riney,who suffers from multiple myeloma blood cancer,will become a member of the TD Ameritrade board post-merger.Mr.Riney has become a familiar face to Americans by appearing in several TV adverts for his company.*
The deal is expected to realise cost savings of about 450 million dollars annually for TD Ameritrade,and more than 300 million in additional longer-term opportunities.As a result of the merger,TDA will grow to 600 retail branches,but intends to slim down to about 450.*
The discount brokerage business has been hurt by intense competition and the trend of switching to passive investing rather than the day trading model,making organic growth more difficult.*
TD Ameritrade Holding Corp (AMTD)