What happened to Scottrade?
The acquisition of Scottrade was completed by brokerage firm TD Ameritrade on September 18, 2017.
Scottrade was an online brokerage firm that served over 3 million accounts in the United States and managed $ 170 billion in assets.
Founded in 1980 by Rodger O. Riney, the company had approximately 500 branches across the United States that provided in-person support and small group educational seminars.
When Scottrade launched its website in 1996, it was one of the first brokerages to offer online trading. The company offered a full line of investment products, trading services, bank accounts and market research tools. Here’s a look at what happened to Scottrade and how the deal affects customers.
- Scottrade was an online brokerage firm that served over 3 million accounts in the United States and managed $ 170 billion in assets.
- The acquisition of Scottrade was completed by brokerage firm TD Ameritrade on September 18, 2017.
- Following the official closing of the acquisition, all Scottrade accounts were officially transferred to TD Ameritrade in February 2018.
- Scottrade was sold to TD Ameritrade for several reasons, including concerns about growing regulatory pressure in the brokerage industry as well as the health issues of founder and CEO Rodger Riney.
- Scottrade has been rated by several sites that have unanimously given the broker high marks for customer service.
Why did Scottrade close?
Scottrade Financial Services closed after TD Ameritrade bought Scottrade for $ 4 billion in cash and stocks.
Ameritrade and private company Scottrade announced that they had reached a definitive agreement at the end of October 2016. The acquisition was completed approximately one year later, on September 18, 2017.
In a statement, TD Ameritrade said, “The transaction combines two highly complementary organizations with a long history of helping millions of people invest in their financial futures.
The decision to sell came at a time when the brokerage industry was facing several new challenges. The issues included demands for innovative technology and new federal rules requiring companies to act in the best interests of their clients when giving advice on retirement accounts.
Securities analyst Michael Flanagan said Riney and her company “are looking forward to and seeing many challenges in the industry.” Flanagan added that “Wall Street continues to be assaulted by regulators, so compliance issues are endless” and that regulators “are spending more money on technology and legal issues.”
Scottrade was not the only online brokerage that decided to go out of business in 2016.
In April of the same year, Ally Financial agreed to buy online brokerage and independent advisor TradeKing Group for around $ 275 million. In July, E-Trade Financial Corporation announced that it had agreed to acquire OptionsHouse’s parent company, Aperture New Holdings for $ 725 million in cash.
Scottrade’s decision to sell was also influenced by Riney’s health issues.
At the end of 2015, he announced that he had been diagnosed with multiple myeloma, an incurable form of blood cancer. Riney and his wife, Paula, made an initial donation of $ 5 million to support multiple myeloma research at the Siteman Cancer Center, where Riney was undergoing treatment.
The Alvin J. Siteman Cancer Center at Barnes-Jewish Hospital and Washington University School of Medicine is a cancer treatment, research and education facility.
“When we found out that there wasn’t a lot of money for multiple myeloma research, Paula and I decided to get more involved,” Riney said. “This is cutting edge work, and our initial investment can make a difference by opening the door for additional grants. ”
The Rineys donated an additional $ 20 million to create the Paula C. and Rodger O. Riney Blood Cancer Research Initiative Fund at Washington University School of Medicine in 2018.
What happened to Scottrade accounts?
After the acquisition was completed, Scottrade Bank accounts were closed on February 17, 2018. Bank account balances were automatically deposited into clients’ Scottrade brokerage accounts or sent as checks to close the accounts. . Brokerage account balances have been transferred to clients’ new TD Ameritrade brokerage accounts.
The transition needed to be as smooth as possible for Scottrade’s clients. They were able to log into their new TD Ameritrade accounts using their existing Scottrade account numbers as user credentials along with their old Scottrade passwords. Scottrade clients can also access their past tax statements and documents through TD Ameritrade.
Today, TD Ameritrade provides brokerage services for 11 million accounts with over $ 1,000 billion in assets.
What did Scottrade’s critics say?
Scottrade has been rated by several sites that have unanimously awarded the broker high marks for customer service. Its reputation for customer service was based primarily on its 500 branches and the relationships that had been established with customers since its founding in 1980.
These benefits were a holdover from the pre-Internet age. Although the company has been offering e-commerce since the mid-1990s, Scottrade’s critics have often pointed out that the online experience is not a strength of the company.
The qualities Scottrade brought into the 21st century from his 20th century roots were in some cases passive as well. The brokerage industry gradually moved away from a few high net worth clients treated through personal interactions in the late 1990s.
Since then, the focus has been on reducing transaction costs and increasing the number of retail investors. The internet has broken down barriers between investors and given them the ability to transact without using a broker.
Confidence in traditional financial advisers and brokers took a hit after the 2008 financial crisis, especially among young investors.
In 2016, Scottrade critics criticized the company for its high minimum balance on premium accounts, its outdated online interface, and its lack of a commission-free ETF.
What did the TD Ameritrade-Scottrade deal mean to customers?
Scottrade brokerage accounts are automatically transferred to TD Ameritrade as part of the transition process.
At the end of 2019, the combined company served nearly 11 million accounts receivable with more than $ 1,000 billion in assets. Scottrade had a reputation for providing excellent customer service.
This was something Ameritrade President and CEO Tim Hockey hoped to continue. According to Hockey, “Scottrade is so well known for its exceptional customer service, a tribute to the culture Rodger Riney and thousands of Scottrade employees have built over the past 37 years. It is up to us to carry on this tradition.
The acquisition adds scale and distribution capabilities to TD Ameritrade’s investment services and education. An Ameritrade press release predicted that “the combination of TD Ameritrade’s award-winning trading technology and long-term investing solutions with Scottrade’s largest branch network should enhance the investment experience by millions. investors ”.
It is now possible to compare the TD Ameritrade Expanded to a popular discount broker like Charles Schwab. For its supporters, TD Ameritrade’s customer service more than makes up for the slightly higher fees.
Scottrade clients who switched to TD Ameritrade had access to:
- TD Ameritrade Platforms, including TD Ameritrade Website, Professional Level Thinkorswim Platform, TD Ameritrade Mobile, and TD Ameritrade Mobile Trader
- More trading products to choose from, including complex options, futures and currencies
- More investment advice and guidance, including managed portfolios, robo-advisors, and free goal planning services
- A wider range of investor education offerings, including classroom learning, one-on-one coaching, print trading and webcasts
- Hundreds of branches across the United States
Prior to the acquisition, Scottrade had approximately 500 branches in the United States. By 2019, these branches had either been converted to TD Ameritrade branches or closed. Customers still had access to Ameritrade’s 360+ branches after the transition.
What happened to Scottrade? Faq
Did Scottrade become TD Ameritrade?
After the acquisition officially closed in September 2017, all Scottrade accounts were officially transferred to TD Ameritrade in February 2018.
Why was Scottrade sold to TD Ameritrade?
Scottrade was sold to TD Ameritrade for a number of reasons, including concerns over growing regulatory pressure in the brokerage industry, as well as health concerns for founder and CEO Rodger Riney.
When did TD Ameritrade take over Scottrade?
TD Ameritrade officially completed the acquisition of Scottrade on September 18, 2017.
Scottrade or Ameritrade, which is better?
On February 18, 2018, TD Ameritrade completed the conversion of Scottrade brokerage accounts to TD Ameritrade, essentially becoming a single platform.
Today, TD Ameritrade is well known for its vast research capabilities, extensive training offerings, numerous support channels, and commission-free transactions.
I sold shares on Scottrade, now how do I get my money?
All Scottrade accounts became fully integrated with TD Ameritrade in early 2018. In order to access funds in your Scottrade account, simply enter your old Scottrade account number and old Scottrade password on TD Ameritrade Login Page.
How can I access my Scottrade account?
As mentioned above, in order to access your Scottrade account, enter your old Scottrade account number in the UserID field and your old Scottrade password on the TD Ameritrade login page.