I think you will agree that finding the right online broker can be challenging.  There are so many factors and so many different brokers…it is hard to choose!

If you’re like me, you’re probably wondering about two things:

1. Is TD Ameritrade a quality online broker?
2. What does TD Ameritrade look like now that it’s Scottrade Acquisition is finished?

If that sounds like you, this TD Ameritrade review is for you…so read on!

TD Ameritrade Features

TD Ameritrade Brokerage Services Review

Positives of TD Ameritrade Brokerage

• Trading Fees – $6.95 per trade. This is a bit higher than Charles Schwab ($4.95), but the fees are still on par with the industry.
• ETFs – TD Ameritrade has over 300 ETFs that are commission free. This is more than Charles Schwab offers, and is an important factor for consumers.  The ability for low fee ETFs is detrimental to many passive investors (and even some more active investors) and TD Ameritrade meets these requirements.
• Investment options -Nice range of Investment including:
  • Stocks
  • Bonds
  • ETFs
  • Mutual Funds
  • Futures
  • Options
  • FOREX
• Minimum investment. The minimum investment is $0.  I love this because there are many brokers requiring $2,500+ to open an account.  Many customers want to test a broker before they transfer a large amount of capital.  This allows them to test the platform with a small amount of capital.
• Tax loss harvesting – Offers tax loss harvesting. This is an important factor for many investors and traders.

Technology and Research Platform

There both positive features and negative features of the technology of the TD Ameritrade platform.

Positives of Ameritrade research and technology

• Robo advisor – TD Ameritrade created their robo-advisory Essential Portfolios in 2017 after the acquisition of Scottrade.
• Think or Swim – Think or Swim is the name of TD Ameritrade’s trading platform. It was actually purchased by TD Ameritrade circa 2009 and is a desktop application.  It offers a swath of functionality, from charting and technicals, to thinkScript  technical indicators, and Fast Beta.  Think or Swim paperMoney is a virtual account which allows you to test trading strategies so you don’t learn the hard way.
• Think or Swim Education – Active trading is serious and can lead to big losses. The platform offers educational content for those learning how to trade, and also those who consider themselves experienced traders.
• Strategy Roller – Think or Swim includes Strategy Roller, which adds functionality when options trading. It allows an options trader to roll expiration dates.
• Research – TD Ameritrade offers a nice range of research from the following third parties:
  • Market Edge – Includes technical analysis of the markets and ratings of a few thousand equities. The reports include, Second Opinion Weekly for quantitative and technical analysis, and, On the EDGE, providing technical market commentary.
  • Research from third parties such as: Argus, Thompson Reuters, Vickers, Morningstar, and CFRA
  • Morningstar offers a Premier List of funds as well as stock screener capabilities.
  • Social signals, which aggregate data from social networks like Twitter.
  • Bond Wizard, helps with bond investment choices.
  • Market Java is a daily morning report describing market conditions before the opening bell.
  • Market monitor can help visualize the S&P 500.

Negatives of TD Ameritrade research and technology

• Robo advisor – The Essential Portfolios rob-advisor has a minimum $5,000 investment. This is similar to Charles Schwab, but many standalone robo-advisors have no minimum.  Also, they charge a fee of 0.30% which is  a bit high for consumers given alternate options. For example, the M1 Finance robo-advisor charges no fees and has a low minimum of $100.  While it is great TD Ameritrade offers a roboadvisory service, they still have a bit of a higher fee and a high account minimum for the service.
• Third-party research – Much of the research is third-party, which is not bad in itself. There is just a bit less uniqueness than a Charles Schwab, which holds it’s own research and ratings analysis.
• Overwhelming – Think or Swim is not necessary for a casual investor. If you are an advanced trader, you will want to have access to the complex interface of Think or Swim.  For the rest of us who are not into hardcore trading, these bells and whistles just get in the way.  Anyone who considers themselves a long-term investor doesn’t need a Think or Swim account as it offers too much information and is just not necessary for anyone who is not a highly active trader.

Related – M1 Finance is a free Roboadvisor

Banking Services

TD Ameritrade is the sister-company of TD Bank which you may recognize this from their similar logos.

TD Bank is a full-service bank that offers a wide array of banking services.  Some love the ability to house their TD Ameritrade investments with a company that has something as powerful as TD Bank.

TD Bank services

• Hours – The most standout feature of TD Bank are it’s weekly hours. How many times have you gotten off work after the bank has closed?  How many times have you had to leave work to go to the bank?  The great thing about TD Bank is that it is open 7 days per week.  It proudly acclaims to be open longer than any other bank during the week.  This is a big positive.
• Checking – TD Bank offers multiple checking accounts ranging from a minimum deposit balance of $2,500 for their TD Premier Checking, to a $100 minimum balance with the TD Convenience Checking. They also offer a student checking account for full-time students under the age of 24 charging no maintenance fees regardless of balance.
• Credit Cards – TD Bank offers multiple credit card options for customers, including: TD Cash, TD First Class, TD Ameritrade Client Rewards, TD Aeroplan, and TD Business Solutions.
• Savings and Money Market – TD Bank offers savings accounts and money market accounts. If you hold an account balance over $2,500 with your savings account, you will bypass any ATM fees.  The savings accounts will include online banking, mobile deposit and mobile banking, free direct deposit.
• Loans – TD Bank offers both personal loans and mortgage loans. Mortgage loans can range from conventional fixed-rate loans to adjustable-rate loans and even jumbo loans.  Personal loans can include unsecured loans, unsecured lines of credit and personal secured loans.

Review of TD Ameritrade post Scottrade purchase

In October 2016 TD Ameritrade made an agreement to buy Scottrade and, within the first quarter of 2018, the conversion of accounts into Ameritrade has been completed.

Changes from Scottrade to Ameritrade

There are a few noteworthy changes that have been made to the TD Ameritrade platform itself since the Scottrade purchase.

If you were a TD Ameritrade client before, you will likely not notice a huge difference, but you may be happy to see some added features.

If you were a Scottrade customer before, there will be some major differences, and some similarities as well.

Main Similarities

• Stock Trades – The commission for trading is the same, $6.95 per trade.
• Options – Options trading is the same: $6.95 + $0.75 per contract.
• Banking – No fees present for checking accounts and both have online banking capabilities.
• Branches – Both have physical office locations, but the acquisition of Scottrade will increase the total number of branches.

Main Differences

• Minimum account balance – Was $2,500 with Scottrade and it is $0 with TD Ameritrade.
• Broker-assisted trades – Are a little over $10 more for TD Ameritrade than they were for Scottrade: $44.99.
• ETF’s – TD Ameritrade offers commission-free ETFs, while Scottrade did not offer this.
• Trading Platforms – Completely different trading platforms and there will be a learning curve for anyone moving to TD Ameritrade.
• Robo-advisor – Before the Scottrade deal, neither TD Ameritrade or Scottrade had a robo-advisor. Recently TD Ameritrade rolled out a robo-advisor called, Essential Portfolios.

TD Ameritrade VS. Charles Schwab

TD Ameritrade’s Scottrade acquisition Final Thoughts

I believe the acquisition is a net positive for clients for the following reasons.

• Learning Curve – Of course, any time you make a change to a new software or online based platform, there is a learning curve. This will be the same for Scottrade customers as you migrate to TD Ameritrade.  The platforms are different, but once you get the hang of it, it should be just like any other brokerage trading platform.  Think or Swim is a popular platform loved by many investors and just because there is a learning curve doesn’t mean Think or Swim and TD Ameritrade are bad platforms.
• Increased locations – The increase in branch locations is a big positive as the fact that there will now be more accessible for clients to be located near an office.
• Account minimum – I love the low account minimum for TD Ameritrade so this continues to be a positive for clients.
• Commissions – Trades are the same price so there will be no price sensitivity if you are already used to Scottrade fees.
• Banking – On the banking side, it is positive that TD Ameritrade already offers banking services through TD Bank. There will be differences in interest rates and products offered between Scottrade and Ameritrade, but they both offer online banking and online bill pay.  It is likely you will feel the two banking services are close in their functionality once you start using them.
• Robo Advisor – Both TD Ameritrade and Scottrade were lacking a rob-advisory arm. This new feature is a big benefit of TD Ameritrade.  It is essential to offer a robo-advisor feature as competition grows between brokers.

This ends the review of the TD Ameritrade Scottrade acquisition.  If you have any personal experience with the acquisition, feel free to comment below!

Conclusion of TD Ameritrade Review

TD Ameritrade was lacking in its pre-Scottrade structure in an essential area: robo-advisory.

With the addition of the Essential Portfolios robo-advisory arm of TD Ameritrade, the platform filled a void it was missing.  Thanks to the new robo-advisory feature, TD Ameritrade now scales the entire spectrum of brokerage services.  Everyone from a beginner investor wanting to trade or invest passively, to experienced investors wanting to invest in low-cost ETF’s and even hardcore traders.

They continue to offer their banking services and access to quality research, and they now have over 360 branches nationwide.

It is essential for a full-service brokerage to have low-cost ETF’s, and TD Ameritrade offers this feature.

The ability for passive investors to gain from any broker lies in the ability to utilize low-cost ETFs, Charles Schwab does a great job with this, and TD Ameritrade is right up there with Charles Schwab.

Think or Swim is a serious trading platform, but, honestly, most investors aren’t day traders (or active traders in general).

I often suggest investors stay away from day trading and speculation, so I don’t believe Think or Swim is necessary for most investors.  That being said, for those traders out there, Think or Swim has great functionality and a plethora of technology that can help you with your trading.  However, at $6.95 per trade, it is possible to find a lower commission platform.

Think or Swim’s advanced structure is not a detriment to using TD Ameritrade.  It is just a platform that is only needed by very serious traders and for any long-term investors practicing valuation and fundamentals, the platform is not needed.

For long-term investors and/or passive investors, technical analysis should not be important, and the technical analysis capabilities should not be factored into your decisions.

TD Ameritrade is the sister company of TD Bank.  TD Bank has one major advantage going for it that other banks do not – it is open 7 days per week.  This is a very advantageous feature of a bank and is a big factor in the banking arm associated with TD Ameritrade.

TD Bank offers all major banking services, from credit cards to mortgage loans.

TD Ameritrade had a gap before it’s Scottrade acquisition, and Scottrade had many gaps.  Now that the purchase has been integrated, TD Ameritrade has bridged the gap in its robo-advisory.

Scottrade’s gaps, which included no ETF’s and no robo-advisory arm, are now filled with the new TD Ameritrade features.

Today, from where TD Ameritrade is positioned within the brokerage industry, it now deserves to be considered a top-tier broker.

TD Ameritrade Offer

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Disclaimer: These are the ideas and opinions of the author.  The author is not responsible for the actions of those who read the posts on this blog.  Each individual reader has a unique situation and unique needs.  This blog is not intended to solve those unique situations of the readers.  This blog is not liable for decisions made by the readers of this blog.

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