Detroit-based lender Ally Financial has agreed to purchase TradeKing Group, a brokerage and direct-to-consumer robo-adviser, in a deal worth $275m.
TradeKing has nearly $4.5bn in client assets, which includes around $1.1bn of cash and cash investments, 260,000 funded accounts and 20,000 daily average revenue trades (DARTs).
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The transaction, which is subject to purchase price adjustments, will include an online broker/dealer, a digital portfolio management platform, and educational content and social collaboration channels.
Subject to regulatory approval from the Financial Industry Regulatory Authority (FINRA), the transaction is expected to close in the third quarter of 2016.
Following completion of the transaction, Florida-based TradeKing’s 180 team members will join Ally.
Ally Financial said that the transaction is expected to have a marginal impact on its 2016 and 2017 results due to transaction costs, and be accretive in 2018 with meaningful growth potential in the future.
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By GlobalDataAlly CEO Jeffrey Brown said: "The addition of wealth management is the next key step in Ally’s digital product evolution and will create a powerful combination of segment-leading direct banking and innovative investment services in a single integrated customer experience.
"The trend toward digitally-based financial services continues to gain momentum with consumers in general, and we see even greater opportunities ahead as the millennial generation begins to require a broader selection of financial products, including wealth management."
