A couple of months ago, Charles Schwab & Co. Inc., announced that it had reduced commission for online equity trades to $0. Other discount brokers including: Fidelity, TD Ameritrade (TDA), and E* Trade quickly followed suit.

A month later, Schwab announced that they had entered into an agreement to buy TD Ameritrade for $26 billion. Schwab is already the largest custodian of assets for Registered Investment Advisers with approx. $1.5 trillion. Fidelity Investments has approx. $1 trillion and TDA has approx. $0.5 trillion advisory assets.

With $2 trillion of advisory assets, Schwab will dominate the market for firms offering advisory services to their clients. Their well-timed competitive move was in part to nip the increasing competition from start-up firms and on-line custodians in the bud.

Schwab services approx. 7,500 advisors and TDA services approx. 7,000 advisors.

As a small financial planning and investment advisory firm, HK Financial prides itself on providing a high level of personal service to a select number of clients. Most of our clients have accounts at Schwab and/or TDA.

We believe that when combined, the new Schwab will offer the strengths of both firms, which should ultimately benefit our clients. So long as the combined Schwab/TDA provides accurate and improving custodial service, we will continue to service our clients at a very high level.