TD Bank Profits Glow In Schwab’s $ 100 Million Marketing Spend For TD Ameritrade As It Hires 350 Advisors And Launches Competitive Robot Using Same Brand


The other American offspring of the Toronto-Dominion Bank will launch with an increased wealth management workforce thanks in part to its logo sharing with Schwab.

Charles Schwab Corp. is getting closer to the day it relegates TD Ameritrade (TDA) to the trash, but its former Canadian parent company will sweep the ashes using the same TD logo to launch a competing robo-advisor and strengthen its branch. advice based on a 400% increase in staff.

TD Bank, the Cherry Hill, NJ branch of the Toronto-Dominion Bank of Canada, is in the process of hiring 350 financial advisers in addition to its current 150 with the intention of putting them in branches.

Tim Welsh: “The last thing Schwab wants is to let the TDA mark slowly fade away. “

The goal is to raise the profile of TD Automated Investments, its new robo-advisor, a task aided by leveraging millions of marketing dollars that Schwab invests in TD Ameritrade, which it acquired largely from Toronto. -Dominion in 2020.

The two companies share the same logo (See below).

For Schwab, supporting a brand it plans to kill – and even compete with – only makes the most of a no-win situation, says Tim Welsh, president of Nexus Strategy.

“The last thing Schwab wants is to let the TDA brand slowly fade away, allowing competitors to progress in the meantime before they flip the switch and move all accounts.

“Investors still have TD Ameritrade on their statements, website, mobile app, etc. and that’s why Schwab still has to spend expensive marketing dollars to support the brand as it continues to exist. in the market, ”Welsh said.

Schwab invested $ 326 million in its own advertising and marketing development last year, according to statistica.com.

Under the Schwab umbrella, TD Ameritrade spent about $ 100 million on digital, print and national television advertising last year, according to a separate tracking service.

Play ball

Asked about possible confusion with the Toronto Dominion’s use of the same TD green logo that Schwab spends millions of dollars on promoting, Ken Thompson, CEO of TD Private Wealth, declined to comment.

Trout
Will Trout: “TD Bank will inevitably target independent investors.

One thing is clear, investors know the logo, explains Will Trout, senior analyst at Javelin Research & Strategy by email.

Among other large-scale marketing efforts, TD Bank currently owns the naming rights to the TD Garden, the arena for the Boston Bruins in the NHL and the Boston Celtics in the NBA.

The TD logo is also displayed on minor league baseball parks, including the 8,500-seat Florida Stadium used for spring training for the Toronto Blue Jays.

“Sunbelt states like Arizona and Florida… are home to significant numbers of Canadian snowbirds,” says Trout.

Separately, TDA to pay $ 15 million in 20-year naming rights deal for 24,000-seat TD Ameritrade baseball stadium in Omaha, New Brunswick, another market. major regional Toronto Dominion. The stadium is home to the widely televised world university series.

This visibility will be more than helpful in its marketing efforts, as TDE Bank’s new robot is entering the same mid-market served by both Schwab and TDA.

“I think [TD Bank] will inevitably target the do-it-yourself investors who cut their teeth in the retail brokerage boom of the late 1990s and early 2000s, and who loved the dynamic user experience of TDA, ”said Trout.

“The game here seems to be more for the younger, less wealthy investors, rather than their parents’ generation.”

Head-on competition

Thompson declined to answer whether TD Bank’s use of the TD logo or trademark is limited or prohibited by a non-compete clause in the acquisition agreement.

The Toronto-Dominion Bank is raising millions of dollars in Schwab TD Ameritide marketing by sharing this logo.

“We are currently unable to discuss the details of our relationship with TD Ameritrade / Charles Schwab,” he said.

But one thing is clear, Toronto Dominion is diving into the market to make it cheaper for the bank to attract new customers, says Trout.

“These Millennials and Gen Z customers inherently support digital advice, both standalone and hybrid. Indeed, they see digital advice and banking to be deeply interconnected, an understanding consistent with the concept of financial well-being. “

The 350 new advisers will be part of the company’s financial advisor expansion strategy, Thompson said in an email. The TD Bank subsidiary already has around 150 financial advisers in the United States as part of TD Bank’s new strategy to go down the market.

The focus of these advisors is to provide goal-based advice to the $ 100,000 to $ 750,000 wealthy segment, “and complements our high net worth private client segment which has been in place for a number of years. years, ”said Thompson.

TD Bank’s new robots will allow the company to reach investors at a younger age, said Peter Mottek, executive vice president of TD Bank’s U.S. wealth management operations in a statement.

“I can see a real compulsion for Schwab to move forward as quickly as possible to rename the acquired business to avoid brand name confusion,” said Joe Anthony, president of Gregory FCA, a company public relations officer in Ardmore, Pa.

Maturing market

Ken Schapiro, Backend Benchmarking
Ken Schapiro: “The industry is entering a more mature phase.

TD Ameritrade launched its robot, Essential Portfolios, a year later and previously sold Amerivest robot-style ETF portfolios. See: TD Ameritrade is playing the game to become the best robot by 2016 with out-of-gate revenue of $ 100 million – albeit with some power play risk

TD Bank, on the other hand, has a big catching up to do, Trout adds.

“I think the need for organizations is focused on hiring engineers to support a nice user interface and next-gen business functionality,” Trout said.

“For example, I wonder if TD Bank might want to introduce fractional shares to allow clients with low assets to build up market-monitoring portfolios.”

Robo-advisers managed around $ 785 billion in 2020, but only $ 77 billion is invested in independent fintech providers such as SigFig, Wealthfront and Betterment, according to a Backend Benchmarking report.

“More than 10 years after the launch of the first direct-to-consumer robotics consulting platforms, the industry is entering a more mature phase,” said Ken Schapiro, CEO of Backend Benchmarking. “As the industry matures, platforms also attempt to expand services and functionality.”

Sizing

TD Bank certainly has the clout to compete with Schwab and other titans in the industry. The super-regional bank compares in terms of scale, retail presence, people, and association with people and their money.

The Canada-based Toronto-Dominion Bank and its subsidiaries, collectively known as TD Bank Group, is the 7th largest bank in North America with deposits of $ 1.1 trillion (Canadian) or $ 780 billion (US), according to its report for the first quarter of 2021.

The U.S. subsidiary, TD Bank, has approximately $ 415 billion in bank assets and serves more than 9.6 million customers at more than 1,100 locations in the Northeast, Mid Atlantic, Metro DC, North Carolina, South Carolina and Florida. The bank’s American subsidiary employs 26,000 people.

TD Ameritrade had $ 1.3 trillion in client assets and 12 million accounts receivable with 260 outlets when Schwab completed its purchase in October 2020.

The Toronto Dominion Bank received 13.5% of the share capital of Schwab, as well as 9.9% of the common shares with voting rights under the TDA agreement.

He also won two seats on the Schwab board, held by executives Brian Levitt, non-executive chairman of the board of TD Bank Group, and Bharat Masrani, CEO of TD Bank Group, in 2020.

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