Doubling Up: Zecco and TradeKing Are Merging!

| May 15, 2012 | Comments 95

I’m excited to share some big news with you. Zecco and TradeKing have agreed to join forces and merge their businesses. We’re convinced that this strategic move will build a better online brokerage for all customers at both our firms, now and in the long-term.

For those of you unfamiliar with TradeKing, I’ll gladly provide some background.

Zecco and TradeKing entered the online brokerage market at around the same time, and the gauntlet we threw down to the traditional firms was very similar. We believed self-directed investors were tired of confusing pricing tiers, indifferent customer service, and a monolithic, one-way relationship with their online broker.

So, we each built an online community for investors, harnessing social media’s potential to make us all better connected and informed traders. And although Zecco’s value proposition evolved over the years, the underlying philosophy remained firm – and remarkably akin in spirit to TradeKing’s.

When I became Zecco’s CEO in 2009, my strategic objective was to take Zecco – and the customer experience we deliver every day – to the next level. Meanwhile, I always kept my eye on TradeKing as the “other” online brokerage that really “got it.” That’s not surprising really, given that the guy at the helm of their business and I go back a long way.

TradeKing CEO Don Montanaro and I first befriended each other in middle school in Southbury, CT, and stayed in touch ever since. We worked side-by-side at Quick & Reilly and knew we had both found our passion in discount brokerage. Our careers followed parallel paths from there.

When I considered Zecco’s prospects for future growth, a merger with TradeKing made immediate sense. Our company cultures, philosophies and business propositions are very similar. Our main pricing points are the same (and will remain the same post-merger): $4.95 per stock or options trade plus 65c per options contract. And each firm brings immediate product upgrades to the other.

Zecco clients will gain access to TradeKing’s top-ranked suite of options tools, Fixed Income platform, great investing education section and award-winning customer service. In turn, we’ll give TradeKing’s customers access to forex trading, and our highly-rated mobile trading apps for both iPhone and Android. The immediate synergies are considerable, and the long-term prospects even brighter.

Don and I both dislike the vague business speak that clouds so many corporate mergers. What does it really mean to “gain economies of scale”? Do customers really benefit, or just the shareholders? The short answer is this: everyone can benefit if the two cultures really fit, and if the focus remains on delivering outstanding value to customers first.

We firmly believe the fit is right, the timing is ideal, and the opportunities are tremendous.  And we’re ready to issue our next challenge to the competition: Try and match us for outstanding value, service, product and community that we will deliver.

Here’s where you can learn more about the merger:

 

As always, I want to hear from you next. What’s your biggest concern? What would you most want to see the combined firm offer next? Let me know what’s on your mind in the comments below.

Filed Under: CEO Blog • Featured

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About the Author: CEO of Zecco Holdings, Inc.

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  • Casey

    Interesting how a childhood friendship in Southbury lead to two CEO’s and a merger.

  • http://twitter.com/youflavio flavio

    Mike, Don, looking forward to the customer benefits mentioned. Easier said than executed, as usual. I would also like to know under what platform you are going to run. I was getting a bit uneasy about the financial health of Penson.
    Can you comment on this?
    Wish you the best
    Flavio

  • ianhawes

    Which trading center will become default? And are you staying with Zecco Pink or adopting TradeKing Blue?

  • iHeartZecco

    Let’s face it. You never really could “Talk to Chuck” - Don Montanaro

  • Loyal customer (of both!)

    Don and Mike, thanks for sharing the news.  I can see how this could really be good, since I am an online trader who has accounts at both Zecco and TradeKing for some of the reasons you mention.  I wonder, though, if you’re going to lose some momentum on developing more truly social trading functions — in the near-term because all mergers slow down development, and in the long-term because now there is less competition on the social investing side.  Thoughts?

  • Guest

    crap

  • Bob

    For all its promises over the last 4 years, Zecco has been short on delivery.  Hopefully this merger improves a frequently exasperating trading experience! Irronically, I’m sitting here waiting for my 14.03 stop to execute even though the stock passed through that price 1-1/2 hours ago!

  • Kinky

    Will you adopt TradeKing’s $0 annual fee (vs. Zecco $30) for IRA’s?

    Also, will you allow account transfers out, without charging a fee?

  • Kartik Jayaraman

    Two great companies! Congratulations on the merger. Interestingly I have my IRA account with Tradeking and a regular brokerage account with Zecco. I find Zecco’s interface to be much more intuitive and easyt o use. I hope you will stick with one interface after the merger and its that provided by Zecco.

  • https://www.zecco.com/ zecco

    Thanks for the great questions, flavio. More details on the merger can be found in the merger FAQs, although we don’t have all answers as of yet. http://bit.ly/mergerfaqs

    As soon as we get formal approval from the regulators, the integration process will start taking shape and things will become clearer quickly. Of course, we will provide updates to customers at both firms as soon as that happens.

  • https://www.zecco.com/ zecco

    Decisions about the various trading centers will be made as soon as we get formal approval from the industry regulators. About the color, what would be your preference?

  • https://www.zecco.com/ zecco

    That is a great question. Yes, mergers obviously take big efforts to execute. However, both Zecco and TradeKing are fully committed to making sure that the customer experience is at the core of everything we do. So, our objective is to get the benefits of this merger delivered to you as soon as we get formal approval from the industry regulators.

  • https://www.zecco.com/ zecco

     Thanks for the feedback, Kartik.

  • https://www.zecco.com/ zecco

    Please keep an eye on the merger FAQs for answers to questions like that:

    http://bit.ly/mergerfaqs

    Although we don’t have all answers as of yet, the FAQs will be updated as soon as more information becomes available.

  • Pingback: TradeKing and Zecco Announce Agreement to Merge – SYS | forextrainingsoftware.net

  • ICburg

    PLEASE…allow me to purchase Gainskeeper though the account rather than PayPal (which I do not use or like).
     
    Also please improve History and Order Status accuracy and timeliness.

  • Brandon

    Why won’t you take this opportubnity to change clearing firms?
     

  • Tareq

    I have an account at both Zecco and TradeKing. The latter was opened more recently because of TradeKing’s Developer API. Any input on the future of this feature post-merger? Please keep it alive!

  • https://www.zecco.com/ zecco

    Good feedback, thanks.

  • https://www.zecco.com/ zecco

    Thanks for your input on this, Tareq. More details on the integration process will be updated in the merger FAQs: http://bit.ly/mergerfaqs

  • L. Holliday

    I expect I missed this detail burried somewhere in the FAQ’s but what will the new post merger name be?   TradeCo?? 

  • https://www.zecco.com/ zecco

    Interesting naming suggestion. We will be working on integration aspects like branding as we are awaiting regulatory approval for the merger. Keep your suggestions coming please!

  • Haveskill

    Integrate the trading screen and profile into one page that allows, trading, positions, order status, and people you follow trades, ALL in real time. People share trades everywhere everyday. 

  • Spazg8r

    Please add my voice to those asking for a replacement for Penson.  Multiple fee’s have been passed on to us, the trader because of Penson.  And don’t even get me started on the tax information delays and re-issues.

    Please do address the earlier question about moving from Zecco – will or won’t there be a fee associated with that. 

  • DrJohnVito

    I have accounts with both companies.I am concerned because Zecco let me trade pennies-Trade King didn’t -I have a large stake in one penny company right now-what becomes of that when they merge?

  • Bdavids

    Following the account number change and 1099 fiascoes earlier this year, I am hoping that a similar fate does not lie ahead of Zecco clients again in the near future.  If these fiascoes occur again, my patience will not endure and I will abandon ship!!!!!!  I am not going thru this again…it has taken me months to get my 1099 straightened out…in fact I am still trying to get this resolved even though it is a month after the tax filing due date!!!

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  • dkk

    I agree with Bdavids. I face the same situation for my 1099 and was really worried too as I am going to miss the deadline of April 15th for the first time. Fortunately Zecco gave me a go ahead to submit my returns with the 1099 provided.

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  • Charley

    When will Zecco start trading on the Canadian Exchanges? …Please & Thank you.

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  • 3+ Year Member

    How about a return to the original reason for the sites name? “Zero Cost Commisions”. First you guys took away the unlimited free and gave a limited number of free trades a month. Then the minimum balance for free trades skyrocketed from I think it was, $2000 to $25000… A little later on, the minimum was erased and good bye to “Zero Cost Commisions”. What a shame… At the very least, bring back a limited number of free shares per month!

  • https://www.zecco.com/ zecco

     As mentioned in the merger FAQs:

    What will be your policy on penny stock trading?

    We are evaluating the penny stock pricing and trading policies at
    both firms and once complete, will decide on a policy that makes the
    most sense for the combined entity.

  • https://www.zecco.com/ zecco

    Good question Charley. This is not a service currently provided by either Zecco or TradeKing, so this will not be part of the immediate integration steps. Which is not to say it won’t be part of plans for enhancements in the future.

  • Pingback: TradeKing and Zecco Announce Merger – What We Know So Far | StockBrokers.com News

  • Abel Sáez

    Can you forward an important issue to management, please?
    While Tradeking/Zecco will keep Penson for clearing, OTC/Pink securities clearing should be done through a penny stock friendlier firm, which actually allows you to trade the shares online without the silly restrictions placed by Penson. That may bring back some of the traders which left Zecco because of the clearing firm’s draconian policies on penny stocks.

    In fact I’d even consider take $9,95 penny stock trades just for them to be cleared through someone which allows you to trade pennies online without silly restrictions on order size and certificate mumbo jumbo.

  • Abel Sáez

    Free trades aren’t a profitable business unless you hold a considerable account balance and make sporadic trades. I won’t be the one asking TK/Zecco for a free lunch, but Customer Service is deficient and Penny Stock trading via Penson is just plain impossible; if the stock is illiquid you’re in for trouble,

  • http://toelectric.com/ Tonyortiz

    So there seems to be no comment on PENSON status-
    could be a concern

  • Guest

    Why would Don want to destroy his company like that?

  • Guest

    There’s too much on one page already.
    At least the charts need to be a separate window.

  • http://t-oelectric.com/ Tonyortiz

    Spaz is absolutly right.My basises were modified and ditto with tax info.Penson ….
    (ref. Cramers mad money sound effects,SCAREY)

  • Guest

    May 18 and still no 1099.
    Most firms will reimburse your fee for transfering to them.

  • Isaac

    how about the name TradeKingz.com……the “z” implying the two companies and the Z for Zecco!! ( I happen to know who owns the website)

  • Rexterjohn

    Whose the majority in the merge company Zecco or TRadeKing and whose management policy is going to be implemented?

  • https://www.zecco.com/ zecco

    Thanks for the creative suggestion, Isaac. We have a hunch the owner would be you…?

  • https://www.zecco.com/ zecco

    This merger is one of equals. TradeKing and Zecco share many strengths and very similar philosophies and cultures. So the focus will be on providing the best of both worlds (and more) to our customers at the same low pricing.

  • https://www.zecco.com/ zecco

    Thanks for your feedback, Abel. We are evaluating the penny stock pricing and trading policies at both firms to decide on a policy that makes the most sense for both the combined entity and its customers.

  • Abel Sáez

     I am more for the meat than the envelope, you know.

    Zecco has caused me massive trouble due to a penny stock I could easily purchase and sell in 2011 but then Penson changed the rules in middle of the game and I was totally stuck (neither could I sell given Penson’s order size restrictions
    on illiquid stocks, neither could I transfer them to another broker as they
    either don’t take in pennies or they don’t apply to foreign investors)
    so, if you want some constructive criticism after all this mess, here it is:
    - $9.95 stock trades for penny stocks. $4.95 for the rest. That might help cushioning the costs for the brokerage when trading a stock that has fell into the non-DTC eligible list.
    - DTCC fees on non-DTC eligible stocks NOT passed to customers (as eTrade and Fidelity do), however, as a way to partially compensate the brokerage for the loss, add a 3-5% of the sale proceeds surcharge to the $9.95 commision charge I suggested before.
    - When a penny gets listed by the DTCC as non-DTC eligible, allow traders to get OUT of positions (SELL side order) online (traders never call in!!) but block any further BUY orders to protect both the brokerage and the customers from entering a blacklisted stock.

  • Abel Sáez

     BTW even if you continue to use the “services” of Penson (watch out for a penny stock hating company such as PNSN becoming a penny stock themselves!!), with the combined size of TK+Zecco you could go self-clearing in short. In fact, one of the reasons to keep Penson was to keep account numbers intact. And so, “Tradekingz” (or whatever) could just create its own clearing subsidiary and copy-paste the account numbers from Penson to keep it transparent for the end user

  • Mary

    Would you please add the choice for options traders to make trades based on the stock price, not just the option premium as it is now at Zecco? I would like to do more trades, but using option premiums for stops and limits is much more difficult than being able to look at the technicals of a stock chart and pick a price you want to buy/sell at.

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