As the Charles Schwab and TD Ameritrade Institutional merger and integration moves forward, advisors are noticing a decline in client services from both firms. Several advisors have identified problems stretching back for months, they said, including incorrect processing and “massive delays.”
An error in TDAI-processed automated savings instructions spurred Michael Baker, an advisor at Vertex Capital Advisors LLC, in Fort Mill, S.C., to take to social media expressing frustration with TDAI client service having “fallen off a cliff.”
“It’s just becoming quite a slog to deal with them,” he said, after criticizing the company on social media, “and they are making it much more difficult to work quickly and efficiently.” He cited paperwork that returned a NIGO, only to later discover it was processed incorrectly, “form ambiguity,” and “no follow-up[s]” as just some of the problems that have been building “for weeks—if not months.”
Problems that Baker had encountered were mostly service-related, not tech-related, he added. Charles Schwab cut key TDAI personnel in October, part of its integration-related layoffs that affected approximately 1,000 employees, or 3% of the combined workforce.
Baker was soon joined by other advisors sharing their own negative experiences.
Hold times were a common complaint. “Call times have increased SIGNIFICANTLY,” said Darren Straniero, founder of OnPlane Financial Advisors in Darnestown, Md., via Twitter.
With staff still working from home, and Schwab and TDAI in the midst of an integration expected to take a minimum of 18 months, advisors aren’t sure where service has broken. But they know something isn’t right.
“They are awful lately. Double check everything they do,” said Mark Meredith, founder of Meredith Wealth Planning in Maryville, Ill., in another social media post.
“Things that used to be completed in one day, now take five or six days,” he explained in an email. “I'm not sure if it is a result of everyone working from home, or from the Schwab merger activity. Either way, it has been a noticeable difference.” He first started noticing problems and delays in the middle of 2020.
“I’ve been waiting on a large non-ACAT from Morgan Stanley since December 11,” added Rockie Zeigler III, a planner at RP Zeigler Investment Services in Peoria, Ill., via social media. “At this point I have zero idea [whose] fault it is anymore.”
“In my opinion, it’s a hang up at the processing department at Morgan Stanley,” he clarified via email, adding that he was typically happy with TDAI's service. “But, again, I’m not 100% sure. Maybe this is just how long these things take.”
“Things are beyond absurd with Schwab,” said Michael Brown, CIO for The Planning Group, in Northfield, Ill., in a social media post. “In December, waiting beyond an hour [for client service] was the norm.” Schwab and TDAI are in the midst of their integration and advisors have not all been brought under one roof.
In a statement, Schwab acknowledged the poor service it had been providing to advisors, attributing the missteps to “a confluence of challenging factors.” It did not describe what those factors were.
“We are aware there have been instances over the past few months in which we have not met our usual high standards for client service,” according to the statement. “We are actively working to resolve issues that may have led to an unsatisfactory service experience or longer than usual hold times.
“These issues are the result of a confluence of challenging factors, but, importantly, they are not due to the ongoing integration of Schwab and TDAI. We certainly regret any inconvenience our service levels may have created and we’re working to resolve them as quickly as possible,” the statement continued.
One unnamed source inside TDAI said employee attrition is to blame. The integrated company is not recognizing the value of its staff, which is being hired away by competing incumbents and not being replaced, said the source. “This whole acquisition has been a financial synergy and shareholder value play; it is not about the people at the company.”
The integrated firm is “definitely not adding bodies to make up for the natural attrition from these people being hired away,” the source added. “That means the staff left are having to do more with less.”