Please ensure Javascript is enabled for purposes of website accessibility

Why Broadridge Financial Solutions Climbed 13.9% in April

By Joe Tenebruso – Updated May 9, 2019 at 10:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The fintech star is about to become an even more powerful force in the retirement industry.

What happened

Shares of Broadridge Financial Solutions (BR -1.74%) rose nearly 14% last month, according to data provided by S&P Global Market Intelligence, after the financial technology company announced a new acquisition.

So what

On April 17, Broadridge reached a deal to purchase retirement plan custody and trust assets from TD Ameritrade (AMTD). Broadridge intends to integrate these assets into its Matrix Financial Solutions platform, which provides mutual fund and ETF trade processing services to the retirement industry.

"The TD Ameritrade trust and custody assets are a strong complement to Broadridge's established mutual fund and retirement business, and uniquely positions us as one of the largest neutral, independent service providers of custodial and sub-custodial solutions," Broadridge executive Michael Liberatore said. "The acquisition represents the next step forward in Broadridge's strategy of serving a broader set of retirement stakeholders and unlocking new opportunities for our clients."

A person painting a picture of a big fish opening its mouth around a smaller fish.

Image source: Getty Images.

Now what

As an industry leader, Broadridge enjoys scale advantages over its rivals. TD Ameritrade even acknowledged this in the press release announcing the deal. "After careful consideration, we decided to exit a part of our retirement plan trust business, one that's better served by a scale player dedicated to expanding and investing in this business," TD Ameritrade Institutional President Tom Nally said.

Once the acquisition is completed, Broadridge expects its Matrix platform to have approximately $420 billion in assets under administration. This massive asset base should continue to provide it with a powerful competitive advantage in the years ahead.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Broadridge Financial Solutions. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Broadridge Financial Solutions, Inc. Stock Quote
Broadridge Financial Solutions, Inc.
BR
$154.44 (-1.74%) $-2.73
TD Ameritrade Holding Corporation Stock Quote
TD Ameritrade Holding Corporation
AMTD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.