Updates
December 11, 2019: Texas Capital, Independent Bank to merge in $5.5 billion deal, both Dallas-area firms.
Original Post
I would have completely missed this. An eagle-eyed reader caught it and my interest and took the time to send me the link; much appreciated. The story: why Charles Schwab and other finance companies keep coming to north Texas.
Finance and insurance is a slow-growth business, except in Dallas, where it's surged over three time faster than in the US.
Schwab, a leading discount broker, has been facing financial pressure from online upstarts, heavyweight rivals and low interest rates. In September, it laid off 600 employees, about 3% of its workforce, and the next month, Schwab cut commissions to zero for online trading of stocks and options.
The no-fees move shook up the brokerage business. Then Schwab followed up with a blockbuster deal to acquire TD Ameritrade. It touted the combination’s money-saving potential, what executives like to call synergies.
The new company expects to save up to $2 billion annually by cutting overlapping jobs, real estate, overhead and other areas.
Schwab is only the most recent big financial player to relocate or expand here. Others include Capital One, JPMorgan Chase, Comerica, State Farm, Liberty Mutual, Fidelity Investments, USAA and many more.
In the U.S., finance and insurance has been a slow-growth business. Since 2010, the segment added jobs at a little over half the rate of the total private sector. So why is it booming here?
DFW continues to have a cost advantage on taxes, wages, real estate and other corporate expenses, especially compared with major metros on the east and west coasts.
Housing costs are 70% lower than in San Francisco, Schwab’s current home.I was unaware of the USAA expansion in the DFW area.
The savings on food, transportation, health care and utilities range from 16% to 26% compared to San Francisco. Such advantages are particularly relevant for industries in transition.
Graphics from the linked article:
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