Adding Insult to Injury

While I shouldn’t have been surprised that Morgan Stanley is acquiring eTrade, it feels a bit like adding insult to injury.

All of us have had to fight to try to earn a decent return and after being with eTrade for around 25 years it now looks like I will have be concerned with how our accounts will be handled.

I have used eTrade as my ‘go to’ account given that our accounts at Fidelity are generally less versatile–i.e. not allowing us to buy certain securities.

Oh well–when the time comes I will just review all the commenters chat on which brokers they prefer. I guess Morgan Stanley will have to earn our business–too many changes–and in particular too many restrictions, and we will be gone.

20 thoughts on “Adding Insult to Injury”

  1. I have been happy with E-trade. I have not had any problem purchasing IPOs and service has been very good. I’ll see how it goes with MS. If not happy, I will look into Schwab.

  2. Brokerages are like spouses. There is NO perfect one and they all have quirks. You just have to accept whatever shortcomings brokerage A has, because brokerage B will certainly have something you do not like also.

  3. I can’t find the referring article now but it mentioned that MS had trouble raising deposits and E*trade has a large deposit base that can be lent out to MS wealthier clients.

    I’ve been with E*trade for 24 years and the thought of having to move if MS tries to squeeze us is making me grumpy. For sure anybody with significant assets will be harassed by wealth management specialists…

  4. Why Morgan Stanley not good? I admit I have worked with them only as an institutional client (fund manager) in the past but they were all right.

    1. I had a small account with MS, and it was hard to get them to do anything because I was “too small”.
      I later rolled in a big bunch of money when I left a pension plan. Suddenly, I started getting weekly calls about how they wanted to help me, and manage my money, etc. Not what I wanted, but they didn’t want to take “no” for an answer, so, I left.

    2. Gabriele–not saying they aren’t good, but I am old and happy with what I have now at eTrade. As long as they don’t mess things up I will be happy.

  5. regulation leaving banks scrambling to find additional revenue

    results in consolidation

    less consumer options

    FOX Business had a great segment on this earlier today

  6. I don’t know why, but all this consolidation really makes me uneasy. And not just in the brokerage department. My local bank just got bought out by a larger bank. They say nothing will change….. To me, it just feels like another stitch in the fabric of wealth inequality. More concentration of wealth and reduced competition.

    I wonder how much of that $400 million in savings is the expense of people’s jobs…

    I don’t know, maybe there’s a bright side to it. “The future’s so bright, I gotta wear shades.”

    1. With the massive increase in regulation since 2008 there is virtually no chance for smaller players in financial services to survive, let alone compete. Expenses are ballooning while revenue is shrinking. Horrible business models. I’d expect consolidation to continue and hopefully the consumer will benefit from the enhanced technology.
      I’m always a little sad when I know that startups are shackled.

  7. Did they say when the change-over will occur? Hopefully it will be a smooth transaction but if they take away tools, e.g. ETRADE PRO and Marketcaster, then I’ll move on elsewhere I suppose although moving IRA’s would be an extra hassle.

    Schab is taking over USAA too which will be a plus I hope, since the USAA trading platform is the worst I’ve ever seen, although Vanguard is pretty bad too.

  8. With all this concentration of financial power in a few hands, is it time to start worrying that these firms are becoming “too big to fail”?

  9. I’m pretty happy with TDA. I work with their fixed income desk 2x/ quarter. I still buy fixed income through Interactive Brokers, but there’s so little available stock that it’s worth it to me to pay my TDA broker a markup for doing the legwork. No problems buying grey market preferreds. Low enough commission.

    1. TDA is merging with Schwab- they said they will look at how trading platforms might change- likely just ‘one’ will survive. I really want them to keep the TDA watch list- much easier to use. I doubt it will be a separate Co.

      For rights offerings, your account must be 500k or you get charged $39 for voluntary reorganizations such as rights offerings.
      Otherwise, great flexibility.

  10. My biggest problem with Fidelity is buying F to F preferreds. They need to be done (with no fee) through a live associate. That’s a big problem because if you leave a gtc order, you can’t come back later and change the bid limit online. You need to go through a rep each time you change the limit bid. Cancellations can be done online. I’ve complained about this but so far no change. They could just tag the account to allow this like they do with options.

  11. I became an Etrade customer many moons ago when they bought out Telebanc (when telephone banking was the height of technology). I really hope nothing changes with this acquisition but I suspect Morgan Stanley is going to try and squeeze some pennies out via cost cutting.

    1. Some pennies alright.
      How about 40 billion pennies…
      “Morgan Stanley expects to recoup that premium through $400 million of cost cuts”

  12. Have used Schwab for years. I have not found anything they won’t let me buy, but maybe I am more mainstream. They paid me to move my account from Scottrade. No transaction fees on anything I’ve ever purchased. Only drawback is sometimes on IPO’s they are slow to get them up and trading, but have called the bond desk on Preferred’s and they have been able to execute. While I do all my own trading, I do have a local office and a person that knows me that I can talk to.

    1. Hello JB; I too have been with SCHWAB for close to 20 years now. Twice I have threatened to leave and twice they have given my $2,500 just to keep my portfolio with them. Like you they charge me nothing to buy stocks or preferreds. They still have a fee on bonds but that is quite normal. I do find their “Stock Research” quite weak to say the least. But after doing this now for 45 years I subscribe to 6 or 7 daily stock publications and have managed to survive just fine. As far as IPO’s they are suing Goldman Sachs and thats WHY you haven’t seen much in the way of IPO’s from them now for several years. They have a local office here in Omaha which helps. My biggest complaint is their research is pretty weak. I have a very large account with them and they have put me into their Pinnacle Team. But as I said their research is very weak in my opinion.

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