Two things of note on this story.
First, there seems to be some interesting M&A going on in the trust/RIA space of late. In August, Atlanta-based RIA Ronald Blue & Co. agreed to sell its assets and customer base to Thrivent Trust Co. and reestablish as a trust firm under the Thrivent umbrella. Now we hear word that Trust Company of America, which is succinctly positioned to the wealth management sector with custody services and an RIA technology platform, has been sold to E*TRADE for $275,000,000. Clearly, with fee compression, firms have to have more AUM and shared back offices in order to stay profitable.
Also, according to their own website, “E*TRADE is a financial services company that provides online brokerage and related products and services primarily to individual retail investors.” By acquiring Custodian Trust Company, E*TRADE can move into the wealth management sector with a significant footprint.
Other major brokerages such as Schwab and Fidelity are already well entrenched within the RIA space through their own divisions or acquisitions. This move enables brokerage behemoth E*TRADE to crack into the sector with some teeth.
San Francisco-based Financial Technology Partners served as “sole strategic and financial advisor to Trust Company of America (TCA) on its $275,000,000 all-cash sale to E*TRADE (Nasdaq: ETFC). TCA is a leading provider of technology solutions and custody services to the independent Registered Investment Adviser (RIA) market with approximately $17 billion in institutional assets under custody and over 180 active RIAs on its platform.”
An overview of the full transaction can be viewed at this link.