This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

TD Direct Being Sold?

TD Direct, a favourite execution-only stockbroker among private investors, is likely to be sold according to a report by Sky News. There are a number of suggested bidders but one of them is Barclays Bank who run a similar platform under the name Barclays Stockbrokers. With TD Direct having £13 billion of assets under management, a merger of those platforms would still leave the combination somewhat smaller than Hargreaves Lansdown, the market leader.

Mergers and restructurings are the name of the game among “platform” stockbrokers of late for a number of reasons (for example Alliance Trust recently acquired the execution only business of Stocktrade from Brewin Dolphin). With such heavy capital investment in technology required, size and transaction volumes really matter to enable them to compete on price – which is the only thing many execution only clients look at. With retail stockbroking volumes relatively quiet, brokers have also been hit by the very low rates on client cash deposits held in nominee accounts (that they retain the interest on rather than passing it on to their clients). That was, and still is, a major source of profits for brokers.

Barclays and TD Direct apparently declined to comment on the story, which is a sure sign, is it not, that things are afoot? TD Direct clients should anticipate having to learn and accept a new platform which is the usual result of stockbroker mergers, and not always to everyone’s liking. Plus of course possibly higher charges which is also often part of the package. It can be annoying when you have chosen a service for its features, ease of use and costs that suit your needs to find your business has been transferred to someone else!

Roger Lawson

  1. ali haouas says:

    I am unfortunate to be with TD direct not by choice- but doesn’t the broker give a choice for clients to move somewhere else if they don’t like barclays as indeed i don’t

  2. sharesoc says:

    You can of course move your business to any other broker you choose and at any time. But you would have to take the initiative on that. If you plan to move anyway, best to do it a.s.a.p. to avoid confusion. Or leave it until after the transfer to any acquiring company has taken place.
    Be warned that transfers to another broker can take a very long time.
    Roger Lawson

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