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 more than 3 million accounts in the U.S. and had consolidated assets of approximately $24.4 billion.
Founded in 1980 by Rodger O. Riney, the firm had about 500 branch offices throughout the U.S. 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 firm offered a full lineup of investment products, trading services, bank accounts, and market research tools. Here’s a quick look at what happened to Scottrade and the effects of the deal on customers.
- Scottrade was an online brokerage firm that served more than 3 million accounts in the U.S. and had consolidated assets of approximately $24.4 billion.
- The acquisition of Scottrade was completed by brokerage firm TD Ameritrade on September 18, 2017.
- After the acquisition formally closed, all Scottrade accounts were officially moved to TD Ameritrade by February 2018.
- Scottrade was sold to TD Ameritrade for several reasons including concerns over rising regulatory pressure in the brokerage industry as well health issues of founder and CEO Rodger Riney.
- Scottrade was reviewed by several sites who unanimously gave 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 stock.
Ameritrade and privately-held Scottrade announced they had entered into a definitive agreement in late October 2016. The acquisition was completed about a year later on Sept. 18, 2017.
In a statement, TD Ameritrade said, “The combination of our two highly complementary organizations would positively alter the landscape of investing, extend our leadership position, and transform the lives of millions of investors for the better.”
The decision to sell came at a time when the brokerage industry was facing several new difficulties. The issues included demands for innovative technology and new federal rules requiring firms to act in their clients’ best interests when advising on retirement accounts.
Securities analyst Michael Flanagan stated that Riney and his company were “looking forward and seeing a lot of industry challenges.” Flanagan added that “Wall Street continues to be assaulted by the regulators, so the compliance issues are never-ending” and that regulators are “spending more money on technology and legal issues.”
Scottrade wasn’t the only online brokerage deciding to close shop in 2016.
In April of that year, Ally Financial agreed to buy online broker and independent advisor TradeKing Group for about $275 million. In July, E-Trade Financial Corporation announced 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.
In late 2015, he announced he had been diagnosed with multiple myeloma, an incurable form of blood cancer. Riney and his wife, Paula, made an initial gift of $5 million to support multiple myeloma research at the Siteman Cancer Center, where Riney was receiving treatment.
The Alvin J. Siteman Cancer Center at Barnes-Jewish Hospital and Washington University School of Medicine is a cancer treatment, research, and education institution.
“When we learned there was not a lot of money going to multiple myeloma research, Paula and I decided to get more involved,” said Riney. “This is cutting-edge work, and our initial investment may move the needle by opening the door for additional grant funding.”
The Riney’s gave an additional $20 million gift to set up 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?
Following the completion of the acquisition, Scottrade Bank accounts were closed as of Feb. 17, 2018. Bank account balances were automatically deposited in the customers’ Scottrade brokerage accounts or sent as checks to close out the accounts. Brokerage account balances were transferred to the customers’ new TD Ameritrade brokerage accounts.
The transition was intended to be as seamless as possible for Scottrade customers. They were able to log into their new TD Ameritrade accounts by using their existing Scottrade account numbers as the user IDs with their old Scottrade passwords. Scottrade customers can also access their previous statements and tax documents through TD Ameritrade.
Today, TD Ameritrade provides brokerage services for 11 million accounts that total more than $1 trillion in assets.
What Did Scottrade Reviews Say?
Scottrade was reviewed by several sites who unanimously gave the broker high marks for customer service. Its reputation for customer service was mostly based on 500 branch locations and the rapport that was built with clients since its founding in 1980.
Those advantages were a holdover from the pre-Internet era. Though the company offered online trading since the mid-1990s, Scottrade reviews often pointed out that the online experience was not a company strength.
The qualities Scottrade brought to the 21st century from its 20th-century roots were also in some cases liabilities. The brokerage industry gradually shifted away from a few high-net-worth clients handled through personal interactions during the late 1990s.
Since then, the focus has been on lower transaction fees and getting more retail investors. The Internet brought down barriers between investors and gave them the ability to make trades without calling a broker.
Faith in traditional financial advisors and brokers took a hit after the 2008 financial crisis, especially with younger investors.
By 2016, Scottrade reviews were critical of the company for its high minimum balance on premium accounts, antiquated online interface, and lack of commission-free ETFs.
What Did the TD Ameritrade-Scottrade Deal Mean for Customers?
Scottrade brokerage accounts automatically transferred to TD Ameritrade as part of the transition process.
As of late 2019, the combined company served almost 11 million client accounts with more than $1 trillion in assets. Scottrade had a reputation for providing excellent customer service.
That was something Ameritrade President and CEO Tim Hockey hoped to continue. According to Hockey, “Scottrade is so well known for outstanding client care—a credit to the culture that Rodger Riney and thousands of Scottrade employees have built over the last 37 years. It’s on us to continue that tradition.”
The acquisition adds scale and distribution capabilities to TD Ameritrade’s investing services and education. An Ameritrade news release predicted that “the combination of TD Ameritrade’s award-winning trading technology and long-term investing solutions with Scottrade’s larger branch network is expected to enhance the investing experience for millions of investors.”
It is now possible to compare the expanded TD Ameritrade to a popular discount broker like Charles Schwab. For its supporters, TD Ameritrade’s customer service more than makes up for slightly higher fees.
Scottrade customers who transitioned to TD Ameritrade were given access to:
- TD Ameritrade’s platforms, including the TD Ameritrade website, the pro-level Thinkorswim platform, TD Ameritrade Mobile, and TD Ameritrade Mobile Trader
- More trading products to choose from, including complex options, futures, and foreign exchange
- More investment advice and guidance, including managed portfolios, robo-advisors, and free goal planning services
- A more extensive range of investor education offerings, including classroom learning, one-on-one coaching, paper trading, and webcasts
- Hundreds of branches across the U.S.
Before the acquisition, Scottrade had about 500 branch locations throughout the U.S. By 2019, those branches had either been converted to TD Ameritrade locations or closed. In September 2022, customers have access to Ameritrade’s 168 branch locations.
What Happened to Scottrade? FAQs
Did Scottrade Become TD Ameritrade?
After the acquisition formally closed in September 2017, all Scottrade accounts were officially moved to TD Ameritrade by February 2018.
Why Was Scottrade Sold to TD Ameritrade?
Scottrade was sold to TD Ameritrade for several reasons including concerns over rising regulatory pressure in the brokerage industry, as well health issues of founder and CEO Rodger Riney.
When Did TD Ameritrade Take Over Scottrade?
TD Ameritrade officially completed its acquisition of Scottrade on Sept. 18, 2017.
Scottrade or Ameritrade, Which One Is Better?
On Feb. 18, 2018, TD Ameritrade fully completed the conversion of Scottrade brokerage accounts to TD Ameritrade, essentially becoming a single platform.
Today, TD Ameritrade is well known for its extensive research capabilities, wide education offerings, numerous support channels, and zero-commission trades.
All Scottrade accounts became fully integrated with TD Ameritrade in early 2018. In order to access any funds in your Scottrade account, simply enter your legacy Scottrade account number and legacy Scottrade password on TD Ameritrade’s log-in page.
How Can I Access My Scottrade Account?
As mentioned above, in order to access your Scottrade account, enter your legacy Scottrade account number in the UserID field and your legacy Scottrade password on TD Ameritrade’s log-in page.