Investment News has an article entitled “Chuck” Schwab eyes short list of successors. Buried in the article is an interesting tidbit that could be very bad for independent advisors:

…Schwab also is studying ways to spend the $2.5 billion after-tax proceeds from the U.S. Trust sale… The two obvious candidates, E*Trade and TD Ameritrade Holding Corp. of Omaha, Neb., are both priced at about $10 billion, Mr. Schwab said. “Can we get the appropriate return? It’s very difficult to get a clear answer on that. Do we want to be a consolidator?”

The article focuses more on the possibility of an e*Trade acquisition but TD Ameritrade is held out as a second possibility. That would be bad for independent advisors.

TD Ameritrade is one of the three big providers of custodial services to reps. If they were to be acquired by Schwab, then we’d be down to two (Schwab and Fidelity). Granted, there are quite a few other second-tier custodians, namely First Trust and Pershing. But Schwab, Fidelity, and TD Waterhouse Ameritrade have the bulk of advisor assets.