The following article ran in the September 21, 2020 issue of the Wall Street Journal.
By Daniel Pianko Sept. 21, 2020 7:12 pm ET
Remember paying your broker $200 a trade? Higher education is at that stage today.
The Covid-19 pandemic forced colleges to shift to online learning, often with disastrous results. Students are no fools and many of them are suing for a discount. They have realized what higher education is loath to admit: Instruction is not what they, their parents and the American taxpayer are paying full price for.
The most common discount on offer appears to be a 10% tuition reduction, but some students are pushing for far more. They claim that nonacademic activities, from school plays and concerts to networking and parties, represent a lot more than 10% of the price tag of college. Such discounts imply that students are still getting 90% of the value of higher education (about $45,000 worth, on average) from their Zoom lectures, but much of the educational content has become widely available for free. Students and parents can’t be faulted for suspecting that an online education should cost next to nothing.
At some institutions, it already does. Primarily online Southern New Hampshire University recently announced a free first year for incoming students in light of the pandemic. California-based National University-which offers an array of online classes-cut tuition by up to 25% for full-time students and says that new scholarships will make enrollment nearly free for Pell Grant-eligible students.
Can the pandemic finally bring the traditional college pricing model to its knees?
Or will these examples remain outliers?
Insight into the future of higher education may come from an unlikely source: the brokerage industry. Like higher ed, stock trading is a highly regulated field with massive barriers to change. Recall the stereotypical stockbrokers of the 1980s: Tom Wolfe’s “Masters of the Universe” or Merrill Lynch’s “Thundering Herd.” For years, the traditional brokerage industry was considered too difficult to replicate with technology. How could the internet replace a white-shoe adviser who not only took trade orders but also answered the phone, offered personal advice, and took part in estate planning and other higher-order wealth-management tasks?
The mighty were felled quicker than expected. Over 30 years, technology reduced the cost of trading a stock from hundreds of dollars to virtually zero.
In 1988, a ragtag group working far from Wall Street began disrupting the brokerage business. It was led by Joe Ricketts, the larger-than-life founder of Ameritrade, who was the first to enable stock trading by touch-tone phone.
Ameritrade introduced online stock trading only seven years later.
My first client as a junior investment banker out of college was Ameritrade, and much of my job involved carrying bags for Mr. Ricketts on roadshows. In 1998, when most other firms charged $199 a trade, he revolutionized the brokerage industry by offering to trade unlimited shares for $8 a trade. After days on the road together, I finally worked up the courage to ask him: “How much lower than $8 a trade can stock trading go?”
With a twinkle in his eye, Mr. Ricketts responded, “One day, Ameritrade will pay you to trade.”
I thought he had lost his business sense, if not his mind. Who gives away a product that everyone else is charging $200 for?
Yet Mr. Ricketts saw the future: Today, almost no large brokerage firm is charging for stock trades. Firms make money from new revenue sources, like selling order flow to market makers. It’s not unlike the way Gmail is free for users, whose data then helps Google sell targeted advertising. In the first quarter of 2020, fintech unicorn Robinhood raked in $100 million in order-flow sales alone. Ameritrade’s successor was sold last November for around $26 billion.
Higher ed is where the brokerage business was in the late 1990s: poised for transformation. Even before the pandemic, momentum was building in the education market away from high-cost operators and toward low-cost ones. Southern New Hampshire University and Western Governors University, nonprofits that charge less than $10,000 a year in tuition, have already become some of the largest and fastest-growing institutions in the country. They each serve more than 100,000 students by using online delivery and competency-based instruction to drive down costs dramatically without sacrificing quality.
These mega-universities will leverage technology to drive tuition revenue to zero over time. Some are already on the way, and the pandemic may accelerate the shift for many others. Rather than collecting tens of thousands of dollars from students up front, colleges might make money by forming partnerships with employers, by charging students a percentage of their post-graduation income, or via government-issued social-impact bonds tied to successful outcomes like graduation rates.
Mr. Ricketts’s lesson should be clear to every college president in America: Technological change affects industries in deep, novel ways that established players ignore at their own peril. New education models are already driving tuition down, but there’s still room for massive, structural price-driven disruption in this industry. In the wake of the pandemic, the winner will be the institution that takes the cost of online learning down to free.
Just as no one 30 years ago could have foreseen what would befall brokerage fees, few now can imagine what will befall colleges in a world without tuition revenue. But that world may be coming. If it is, the debate over free college will become an anachronism. Will you greet it with disbelief or a twinkle in your eye?
Daniel Pianka is co-founder and managing director of University Ventures.
I don’t normally post news articles here, but I feel so strongly about this topic. Jobs matter. One of the great satisfactions of my career is creating them. And I was proud to stand up for Omaha jobs when we merged TD Ameritrade with another organization.
I don’t normally post news articles on my blog but this one was important to me so I wanted to highlight it here:
Charles Schwab and TD Ameritrade were set to publicly roll out a blockbuster brokerage merger that
would shake up the investment industry, send both companies’ stocks
soaring and fan deep fears of job loss in TD Ameritrade’s home city of
Omaha.
Then
just hours before the planned announcement, timed to hit just before
markets opened Thursday, Nov. 21, Schwab officials noticed something
concerning: The sale of TD Ameritrade had not been signed off on by the
firm’s biggest individual shareholder, company founder Joe Ricketts.
The
announcement was suddenly off. And when Schwab reached out to Ricketts
later that morning, his representatives communicated a condition
Ricketts wanted if he was going to sign off on voting his shares for the
merger. The deal would have to include language offering some
protection for TD Ameritrade jobs in Omaha.
In the end, Ricketts reportedly was satisfied with what he got — a signed agreement intended to provide a measure of security for TD Ameritrade’s Omaha workers.
Joe Ricketts initially delayed the TD Ameritrade-Schwab merger until an agreement on some protection for TD Ameritrade jobs in Omaha. “Omaha has been, and we hope may continue to be, an important employment center for our company,” said spokesperson Kim Hillyer. REBECCA S. GRATZ/THE WORLD-HERALD
On
its face, the wording in the agreement Schwab filed with federal
regulators last week provides no guarantee that all — or even any — of
the 2,300 TD Ameritrade jobs will remain in Omaha for the long term. The
language gives Schwab much leeway to reduce the acquired firm’s
workforce in the city, and the agreement sunsets after two years.
But
an expert on mergers law says the words could still pack both legal and
practical punch. And a person close to the transaction says Ricketts
was satisfied the agreement will accomplish his goal: requiring Schwab
to be deliberate in the coming years as it considers how to integrate TD
Ameritrade’s Omaha operations into its own.
“It’s
not a rock solid ‘no one can get fired,’ but it’s a commitment by
Schwab to be reasonable and thoughtful in how they approach this, and
the fact Schwab agreed means they are taking it seriously,” said the
source, who had knowledge of the agreement and spoke on condition of
anonymity. “It’s a merger. Changes are going to happen. But they’re
going to happen in a thoughtful way.”
A
spokesperson for Schwab declined Friday to comment or answer questions
about the agreement or how it came about. Joe Ricketts through a
spokesman also declined to comment.
However, Nebraska
Gov. Pete Ricketts, his son, said the agreement “reflects a commitment
to maintain a level of jobs in Nebraska” and “gives us the opportunity
to make the case to Schwab to grow here in the future.”
Pete
Ricketts, a former TD Ameritrade executive who as governor is the
state’s de facto chief economic development officer, said he has since
Monday spoken to Schwab chairman and founder Charles “Chuck” Schwab and
company CEO Walter Bettinger.
“I will continue to make the case in the coming months,” Ricketts said.
The
jobs agreement, signed by Bettinger, Joe Ricketts and his wife,
Marlene, was part of a pile of merger-related legal documents Schwab
filed with the U.S. Securities and Exchange Commission Wednesday. Here
is how the relevant language reads (“Parent” being Schwab and “Company”
being TD Ameritrade):
Post-Closing
Integration. Parent commits in good faith to seek to maintain, from the
Closing Date through the second anniversary of the Closing Date, a
level of employment in Nebraska comparable to the Company’s level of
employment in Nebraska at the Closing Date, taking into account
voluntary attrition and transaction-related integration plans.
Irina
Fox, a mergers and acquisitions expert with Creighton University’s law
school, agreed that the latter part of that wording does give Schwab
much freedom to reduce Omaha employment. But she said no one should
overlook the significance of Schwab’s commitment to “in good faith” seek
to maintain Omaha employment — words that also carry significant legal
meaning.
“That
does put a little restriction on their discretion,” she said. “If they
were to fire a significant percentage of the Omaha employees, they would
need to do quite a bit to justify that decision. There is a good faith
clause there where they promise not to do it arbitrarily. I think this
clause has some teeth.”
Legalities aside, it’s probably not a bad thing for Omaha’s future job prospects that
Schwab’s leadership made a promise to TD Ameritrade’s founder. All
things being equal, it’s certainly not unheard of for boardroom politics
to play a role as companies make decisions on where jobs will be
located.
And that may be particularly noteworthy in this case, in which the two company founders have a long shared history.
By 1999, Joe Ricketts was a billionaire — something Ricketts credits in part to TD Ameritrade’s back office trading center, operated so efficiently and cost-effectively, no competitor could afford to offer online trades for less. “It had always been a point of pride with me that this business I had built was helping bring prosperity to some of my neighbors,” Ricketts wrote in his recent book. KILEY CRUSE/THE WORLD-HERALD
As
it happens, within a single month this fall, both Chuck Schwab and Joe
Ricketts came out with autobiographies telling their own life stories.
And in back jacket quotes, each man actually offered praise for the
other.
Schwab
lauded the guts, tenacity and creativity of his Omaha-based competitor.
Ricketts described Schwab as a man of high integrity and a fierce rival
who he now considers a friend.
Indeed, the two men have much in common.
In
1975, Ricketts and Schwab founded two of the nation’s very first
discount brokerages, their low trade commissions helping to democratize
stock trading, bring investing to the masses and shake up the Wall
Street establishment.
While
Schwab’s San Francisco-based firm largely evolved into a traditional
wealth management company offering financial advice to individual
investors, Ricketts’ firm in Omaha was more of a technological
innovator. One of his first breakthroughs was a niche technology he
developed that allowed customers to make automatic trades on their
touch-tone phones.
That
platform left Ricketts’ firm well-positioned in the 1990s when the
Internet and home computers rose to prominence. In 1995, Ricketts’ firm
bought the company that had just pioneered the first online trade, and
he dove headlong into the fast-growing, lucrative new business line.
The
sales commissions starting rolling in, and TD Ameritrade shot off like a
rocket. By 1997, Ricketts took his family business public. By 1999, Joe
Ricketts was a billionaire.
The
company continued to grow and thrive in Omaha, becoming the industry’s
largest volume online brokerage with its widely recognized “eight bucks a
trade” pitch. But technology and marketing aside, Ricketts spoke to a
World-Herald reporter in 2006 about what he considered the secret of his
firm’s success.
The
key, he said, was the low-cost operations of TD Ameritrade’s back
office trading center, at the time in the Southroads Mall in Bellevue.
Staffed 24/7, it operated so efficiently and cost-effectively, no
competitor could afford to offer online trades for less.
Ricketts
also expressed an appreciation and affinity for his staff, talking of
the pride he felt in helping create jobs that made a difference in the
lives of his employees and their families.
“It
had always been a point of pride with me that this business I had built
was helping bring prosperity to some of my neighbors,” he wrote in his
recent book. At times when he had to lay off workers due to stock market
crashes, he’d do so, but said he’d “rather cut off my own arm.”
Once
TD Ameritrade went public, the control the Ricketts family held over
the firm loosened with time. Joe Ricketts retired as CEO in 2001, saying
he was firing himself to put the company in more capable hands. He left
the board of directors completely in 2011, though other members of the
Ricketts family have continued to hold at least one board seat since
that time.
Tapping
its TD Ameritrade fortune, the Ricketts family in 2009 acquired the
Chicago Cubs baseball team. Joe Ricketts became one of the largest
funders of conservative politics and libertarian thought. He saw his
son, the firm’s former chief operating officer, win the Nebraska
Governor’s Office in 2014.
But
over the years, Ricketts also continued to own huge amounts of TD
Ameritrade stock, despite the persistent advice of financial advisers
that he should do more to diversify. TD Ameritrade remained his baby.
To
this day, he and his wife hold 8.6% of TD Ameritrade’s shares, and his
children own sizable stakes as well. Before word of the Schwab merger
leaked, Joe and Marlene Ricketts’ shares were worth almost $2 billion.
Based on the premium they and other shareholders will receive from the
sale, those shares are currently worth $2.5 billion.
Joe
Ricketts rode his company’s stock through highs and lows over the
years. He also watched as the firm gobbled up competitors and in 2013
moved into its new headquarters, a green-tinted tower meant to resemble a
ticker tape that rises over Interstate 680 and West Dodge Road.
But in recent years came an industry challenge that finally proved the company’s match.
An
upstart called Robinhood in 2014 began offering no-commission trading
on a phone app, causing all the traditional players to start ratcheting
down their commission rates.
On
Oct. 1, Schwab announced it was eliminating all sales commissions on
U.S. stocks and exchange-traded funds. Within hours, TD Ameritrade and
other competitors were forced to match the move.
Schwab
was completing the “race to zero,” and it appears to have been a
strategic play, as it disproportionately hurt Schwab’s chief
competitors.
For
Schwab, the lost commissions reportedly amounted to less than 5% of
revenue. For Ameritrade, the loss was 15%, nearly $1 billion a year. TD
Ameritrade’s stock price plummeted by almost one-third.
At
some point, Schwab and TD Ameritrade began merger talks. And when they
got serious, TD Ameritrade officials provided Joe Ricketts and his
family a “voting support agreement.” Such documents are common in
business mergers and acquisitions, signed statements that bind major
shareholder to vote stock in favor of the merger.
Such
an agreement wasn’t needed for the deal to go forward. The considerable
Ricketts family holdings were still just a fraction of TD Ameritrade’s
shares.
And
Ricketts actually fully backed the merger. According to the source
close to the transaction, Ricketts believed that in a zero-commission
world, having a company of significant scale would be critical to future
success. Marrying TD Ameritrade with Schwab would provide that scale.
But
Ricketts simply wasn’t interested in signing the voting support
agreement. He just wanted to vote his stock the same way any other
common shareholder would, later when TD Ameritrade schedules the
shareholder vote.
While
the reason is unclear, the fact Ricketts declined to sign the agreement
apparently was not communicated by Ameritrade officials to Schwab until
just hours before the planned Nov. 21 announcement.
Schwab’s leadership balked. They weren’t comfortable going forward without the Ricketts agreement.
It’s
not exactly clear why Schwab officials hesitated. But it’s conceivable
they were concerned that Ricketts owned enough stock he could cause
difficulties for the merger if he suddenly decided the deal was a bad
one and worked against it before the official shareholder vote.
Nebraskans
in recent years have seen firsthand the power that can be wielded by a
significant minority shareholder like Ricketts. Sidney-based outdoor
outfitter Cabela’s was forced to merge with a competitor in 2016 after
an activist investor owning 9% of its stock vocally objected to the
firm’s financial performance and led a campaign for major change.
With
the announcement suddenly off, the source said Schwab officials reached
out to Ameritrade’s founder. Ricketts’ representatives explained that
he simply didn’t want to sign the agreement. But they said he’d be
willing to do so if Schwab made a commitment to preserve jobs in Omaha.
The memo details the $26 billion transaction and provides, it says, “answers to common questions.”
“Joe
is a businessman,” said the source. “If you’re going to ask something
from him, he’s going to ask something from you. The only thing he asked
for was the jobs language.”
Ricketts was certainly realistic that the elimination of redundancy between the two companies will require job losses in Omaha.
He wasn’t going to ask for blanket protection. But he still wanted to
pursue language that would make Omaha jobs “top of mind” for Schwab —
potentially easing the impact, the source said.
Schwab
officials were “thoughtful and respectful” and took the request by
Ricketts seriously, the source said. It was considered at the most
senior levels of Schwab. It’s unclear to what degree Chuck Schwab
himself, as Schwab’s chairman, participated in the considerations.
With some tweaking, the language was officially agreed to on Sunday, Nov. 24. The merger was announced the next morning.
Though
it’s clear the language offers no guarantees, the source called it an
important commitment from Schwab — one that bodes well for how that firm
will approach Omaha jobs in the merger.
What
the combined Schwab-TD Ameritrade ultimately looks like will be a long
game that will play out over years. The deal is not expected to close
until next year, with Schwab officials saying the full integration of the companies could take up to three years after that.
The
Omaha agreement isn’t the only geographic consideration. With the
merger, Schwab announced that the combined headquarters will be in the
Dallas-Fort Worth metro area, where both TD Ameritrade and Schwab
already have significant operations.
While
Schwab declined to comment on the Ricketts agreement, TD Ameritrade
officials acknowledged it, but said it’s premature to talk about how it
will impact the firm’s more than 9,000 employees nationwide.
“Omaha
has been, and we hope may continue to be, an important employment
center for our company,” said spokesperson Kim Hillyer. “But it would be
a disservice to our people — in Omaha and in other cities across the
country — to speculate on what staffing in Omaha may ultimately look
like.”
Fox,
the Creighton professor, said the Ricketts agreement won’t keep Schwab
from creating the efficiencies that shareholders expect when two firms
merge. But she said the agreement could help shape where the combined
operations end up. And the firm in many cases will have multiple cities
to choose from, as both companies have operations spread around the
country.
For
example, about half of TD Ameritrade’s 2,300 Omaha workers are part of
its clearing operations, making sure trades get posted to the proper
accounts, at the right price and according to federal regulations. TD
Ameritrade also has clearing operations in Dallas.
For
its part, Schwab has clearing operations in both Dallas and Colorado.
It would seem quite likely the merged company will continue to have
clearing jobs in more than one location.
While
Omaha is officially the home of TD Ameritrade’s corporate headquarters,
company employees say the reality is most of its top executives have
been based in New Jersey for the past decade. In effect, Omaha lost most
of those jobs years ago.
Besides
clearance, the balance of TD Ameritrade’s Omaha workforce is largely a
mix of certified stockbrokers who handle trades by phone and information
technology workers who operate the trading platform. There are such
workers in other locations around the country, too.
George
Morgan, a former stockbroker who teaches finance at the University of
Nebraska at Omaha, said Omaha has lots of business advantages that
should be appealing to Schwab. The city offers low operating costs, is
home to one of the industry’s most user-friendly trading platforms, and
has some of the nation’s best technology infrastructure, part of its
legacy as the strategic home of the nation’s nuclear arsenal.
“From the perspective of Schwab, maintaining a presence in Omaha makes a lot of business sense,” he said.
But
he said the Ricketts-Schwab agreement certainly won’t hurt matters,
either. “I really commend Joe 100 percent for taking care of what he has
built,” Morgan said.
Indeed,
beyond the legal significance of the jobs agreement, Fox said there’s a
practical effect, too. She doubts Schwab and its leaders would take a
pledge they made to the founder of TD Ameritrade lightly.
“It is in the interest of Chuck Schwab to have Ricketts on board with the merger,” she said. “It is in everyone’s best interest to assure a smooth transition.”
This article touches upon important issues for the Omaha community.
By Henry J. Cordes and Jeffrey Robb / World-Herald staff writers Nov 25, 2019 Omaha World-Herald Article
With the gut-punch announcement that TD Ameritrade is being sold, focus turned Monday to how many of the online brokerage’s 2,300 Omaha jobs can be saved.
TD Ameritrade has 650,000 square feet of office space — 530,000 square feet that TD Ameritrade occupies in the tower complex in Omaha’s Old Mill area and an additional 125,000 it leases in two neighboring buildings. The firm also has more than 1,750 parking spaces. RYAN SODERLIN/THE WORLD-HERALD
Ironically,
among those scrambling and pushing for Charles Schwab to preserve
operations in the city was Gov. Pete Ricketts, the son of TD Ameritrade
founder Joe Ricketts and the firm’s former chief operating officer.
“In
the coming days, I will work to personally make the case to Schwab to
stay committed to Omaha,” said Ricketts, whose family long ago ceded
controlling interest of the company.
The announcement means Omaha will lose a major corporate headquarters and the hundreds of associated jobs. San Francisco-based Schwab announced Monday the combined headquarters will be in suburban Dallas-Fort Worth, which came out as the biggest geographic winner in the $26 billion deal.
Omaha’s
best hope to keep jobs appears be in preserving some of TD Ameritrade’s
operational and customer service functions. A site selection expert and
local economists think there’s a good chance some of those roles can be
preserved.
“That would be a
best-case scenario,” said John Boyd, principal of a New Jersey site
selection firm. “I know the governor and his team will be working around
the clock to make the case to keep as many jobs as possible. But make
no mistake. Jobs are at risk and likely to be moved to suburban Dallas.”
Early Monday, Schwab made official its rumored acquisition of rival TD Ameritrade, creating a new brokerage industry behemoth that will hold more than $5 trillion in client assets and be based in Westlake, Texas.
Schwab
celebrated the “synergies” and “attractive returns” to shareholders when
the firms are combined. The deal would not gain needed regulatory
approvals until sometime in the second half of 2020. Integration of the
two companies would follow over the next 18 months to three years.
In
announcing the move, Schwab was quite specific about the effect — or,
rather, lack thereof — on its San Francisco employees. It said the vast
majority of jobs there would not be affected, with any moves to Texas
occurring largely through attrition and relocation over time.
“Schwab
was founded in San Francisco and has maintained a longstanding
commitment to the Bay Area, which will continue,” the company’s
statement said. “Schwab expects to continue hiring in San Francisco and
retain a sizable corporate footprint in the city.”
But Schwab had little to say about Omaha.
“We have not provided that level of specificity yet,” Schwab spokeswoman Mayura Hooper said.
TD
Ameritrade officials didn’t speak publicly Monday but acknowledged that
the merger will significantly affect its nationwide workforce of more
than 9,000.
“We believe that a
large number of TD Ameritrade associates will continue on with Schwab
post-integration, but there will likely also be many that do not,” the
company said.
Employees in TD
Ameritrade’s green-tinted tower at Interstate 680 and West Dodge Road
met with company officials late in the day but received few answers
during the 90-minute session, which one employee called somber.
“The
bottom line is people are going to lose their jobs,” said the 20-year
employee, who declined to be named. “Some people are going to keep their
jobs, but they don’t know yet.”
After
watching TD Ameritrade absorb numerous competitors over the years, the
employee said it was strange to watch the other shoe drop.
“It is part of the American corporate culture,” he said. “We basically eat our young.”
Indeed, TD Ameritrade had survived numerous rounds of industry mergers and disruption. But in the end, it appears it couldn’t survive a recent trading commissions war. Joe Ricketts actually has much in common with Charles “Chuck” Schwab. Both men in the 1970s founded discount brokerages that challenged the Wall Street establishment. While Schwab’s became a more traditional brokerage, Ricketts’ Omaha firm made its mark as a technological innovator, in time becoming the nation’s highest volume online trader.
Then Schwab announced last month it was eliminating sales commissions on U.S. stocks and exchange-traded funds. Responding to Schwab’s strategic play, within hours TD Ameritrade announced
that it was likewise doing away with its $7-per-trade commission. The
“race to zero” on commissions had been brewing for years. But TD
Ameritrade was far more reliant on such commissions than Schwab, losing
$1 billion in annual revenues from the move. Wall Street took notice. TD
Ameritrade stock plummeted by almost 30%, no doubt helping fuel merger talks.
Schwab officials said the boards of both companies voted unanimously for the merger. That apparently included Todd Ricketts, son of Joe, brother of Pete and the lone Ricketts on TD Ameritrade’s 12-member board. The move was also approved by an independent outside board that TD Ameritrade established to oversee all negotiations on the transaction.
So why did the new firm land in the northern Dallas-Fort Worth metro area?
Both TD Ameritrade and Schwab have significant operations there, Schwab in Westlake and TD Ameritrade just a few miles away in neighboring Southlake.
TD
Ameritrade already has some 2,000 employees there, almost as many as in
Omaha. Just a year ago, the company consolidated its Dallas-area
workforce in a new Southlake operations center.
Boyd,
the site selection expert, called Westlake one of the most desirable
suburbs in the United States, with attractive housing, excellent
schools, great air service and, since it’s in Texas, no state income
tax. Schwab has invested heavily in its Westlake campus and will
obviously do so more now.
Ameritrade would represent Omaha’s second recent loss of a Fortune 1000 corporate headquarters, coming four years after ConAgra announced it that was moving to Chicago. The still-fresh ConAgra departure also might offer a good primer on what could be ahead for TD Ameritrade.
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While
the headquarters is gone, ConAgra continues to have about 1,300
employees in Omaha, down about 1,000. A number of operations remain
here, including research, product development, supply-chain management
and oversight of production and distribution.
Similarly,
Schwab could choose to preserve some TD Ameritrade jobs or functions in
Omaha, such as the hundreds of registered brokers who handle telephone
trades.
Ernie Goss, an
economist at Creighton University, said he thinks a “sizable” number of
jobs will remain. Any thought that all 2,300 jobs will relocate to
Dallas or San Francisco “is just not credible,” Goss said.
“It’s
not good,” Goss said of Monday’s announcement. “But it could be a lot
worse. In the end, I think Omaha will come out just fine.”
Eric
Thompson, a University of Nebraska-Lincoln economist, agreed, citing
the region’s relatively strong economy. “It should be a reasonably
favorable environment to find new work,” he said.
State and local officials wasted little time making their pitches to preserve TD Ameritrade jobs.
Mayor
Jean Stothert said Monday that she’s hoping to have a conversation with
TD Ameritrade’s CEO and has already reached out. The mayor said the
city is also prepared to work with the Greater Omaha Chamber to help
affected workers find new jobs.
“Our concern is for the employees,” she said.
David
Brown, CEO of the Greater Omaha Chamber, noted that much of the past
success of TD Ameritrade “has been fueled by an experienced,
hard-working talent pool.” He said those workers would continue to
strongly support the new merged company or “any other organization here
in Omaha that will be lucky enough to put their services to work.”
Ricketts
said he would work in coming days to personally make the case to Schwab
to stay committed to Omaha. He cited Nebraska’s “incredibly
competitive” cost of doing business and its productive workforce.
Ricketts
knows a little about how hard TD Ameritrade’s employees work. When
Ricketts was a young executive in the company in the 1990s, his office
was in the company’s Bellevue operations center with the rank-and-file
employees. The governor said Schwab’s announcement creates significant
uncertainty for the thousands of Nebraskans who loyally worked for the
company through the years.
“I am anxious to see what their decision means for the people of Nebraska,” Ricketts said.
I’ve said before that I prefer to look forward, so I’m generally not a fan of dinners honoring past accomplishments. But when the Museum of American Finance awarded my friend and longtime competitor Chuck Schwab its Financial Innovation Award, I was happy to be there, along with TD Ameritrade’s current and incoming Chief Executive Officers, Fred Tomczyk and Tim Hockey, and several members of TD Ameritrade’s Board of Directors, including my son Todd. For nearly fifty years now, Schwab and Ameritrade have been at the vanguard of a revolution in personal finance that has empowered countless individuals to take control of their own futures. Congratulations, Chuck!
One of the great things about having your own website is that it gives you a chance to share your thoughts about things that matter to you. In my case, this may mean discussing developments at Opportunity Education, our companies, and our policy initiatives, or commenting on news and issues that I care about.
For this first post, I wanted to write about something that happened recently in my personal life. There’s nothing more moving – or humbling – than a tribute from people you’ve worked alongside. I’m just back from the TD Ameritrade annual shareholder’s meeting where they showed a beautiful video about my years at the company and unveiled a portrait of yours truly that will hang in the new corporate headquarters. As I said at the time, I generally prefer looking forward to looking back, but when I do think about the years we spent building the company, two things stand out: how much fun we had starting the business and how many lives – both customers and employees – we touched for the better. By any measure, I am truly blessed.
