We have lots (a really lot) of messaging that deals with various brokers and what is allowed/not allowed by them in terms of buying/selling new issues on the Over The Counter (OTC) markets and many other issues.
For instance some brokers allow pretty much any transaction. I personally like eTrade as I have never had a trade rejected by them–while I have an account with Fidelity it restricts my ability to buy Fixed-to-Floating rate issues.
This area is for an exchange of information on all the various brokers–good, bad and otherwise.
Like all the various discussion pages if folks could ‘stay to topic’ the page will be more valuable to all, but staying to point.
If you want to start a new thread go to the bottom of the page and do a comment–instead of a reply.
OK, new broker discussion/complaint topic. Is there any broker that consistently generates all statements by the day after month end? Fidelity seems to take 2 days, Schwab up to 4. Who does better?
How bad is Robinhood as a broker? I just noticed an unbelievable deal they’re offering to bring an account in.. https://robinhood.com/us/en/ “Earn a 1% bonus when you transfer your brokerage account to Robinhood, now through January 31, 2024. No cap.” Or “Get a 3% bonus on IRA transfers and 401(k) rollovers with Robinhood Gold. That’s more money now that can be more money later.” I’ve not looked into these but that’s the headlines…. That’s quite the incentive! I know by Robinhood’s reputation I’m not in their target audience, but that seems to be enough incentive to put up with them for a while if I’m going to get Schwabbed eventually.. Anybody have direct experience with them?
Now that I’m into preferred and bonds, they’re fairly useless. They don’t seem to allow trading in either one. My brief dabble in crypto worked well, and common stock trading is fine. Their research capability is zilch. But this bonus also has the fine print that they take it back if you withdraw your funds inside 2 years.
2 years.. ahah….. I hadn’t looked but was expecting or hoping for something like 6 months… Sounds like given my normal areas of activity it sounds as if I’ll be missing nothing by continuing to ignore Robinhood
thnx
We are going to need alot more than 3% to beat Gridbird this year!!!!
And far more resolve than I’ll ever have! lol Knit one, purl two, that’s more my lane.
Pig, Im an easing picking sitting duck this year. I got basically half the chips off the table drawing around 5% in short term stuff and have no intention of selling them. Unless some nice market rout draws my Gordie Howe money back out of retirement. So I am working with one hand intentionally tied behind my back and not really wanting to move a lot of the other stuff because I got them nicely buried in illquids at a good price. So you very likely Pig will be kicking sand in my face this year!
You mean kicking a black belt while he/she is down? No no sir, I’m not falling for that, lol.
I kind of feel like this should go in Reader Initiated Alerts, but I will post here for now to see if it gets any traction.
So far this is only an issue I have experienced with Schwab. I am reaching out to see if anyone else has noticed this, or if it’s just my issue.
When I dial in to Schwab (800 435 4000), I notice in my call log a missed call. The phone does not ring. I can just see it in my call log on my phone. I google the numbers that are “calling” me, and they come up as suspicious numbers. I have spoken with Schwab and Verizon and neither seem to be able to give an answer why this is happening. I call Fidelity and do not experience this phenomenon. I am trying to find out if this is a more widespread issue, or if somehow I alone am compromised.
For example:
On 12/29/23, I called Schwab at 5:27:34AM. At 5:27:36AM I show a missed call from 920 455 8573
On 12/29/23, I called Schwab at 6:03:30AM. At 6:03:33AM I show a missed call from 210 294 5326.
I have numerous examples of this where I show a missed call, all within 2 – 3 seconds of my call to Schwab. Verizon does not show that the calls connect in any way, but I am not convinced yet that somehow it isn’t piggybacking on my call to schwab. I have taken security precautions and am getting ready to freeze my credit reports. So far, no unusual activity – WHEW, but I just wanted to alert others if this is happening more widely than just my little microcosm.
Trying again…… I knew this wasn’t going to get any traction over here.
The call does not even need to connect with Schwab. All I have to do is dial the number and wait a few seconds, hang up and look at my call log. And Bammo! I show a missed call from a probable spam #.
I have never experienced anything like this.
Is this on your cell? land line? VOIP?
FWIW – I call schwab at 800 435-9050 . I find it tends to get through faster.
Hi Private,
Thanks for the reply. I am using a cell phone – Google pixel with Verizon service.
I just dialed the number you use and I get the same missed call scenario.
I use my phone for personal and for running my business, so I make and receive a fair few calls. I have never noticed anything like this happening when I call any other number. But now, there are 2 numbers for Schwab where I experience this phenomenon.
Mark–I suggest you call Verizon tech support to see if they have an explanation.
Verizon might be helpful.
I wonder whether you have an app that is contaminated with something?
-Check what apps you have installed to be sure you installed them all – and delete anything that isn’t necessary.
-Check your app permissions and see what has permissions to use your phone features.
I talked to my network security guy, and he had some other thoughts:
-try taking your sim out and putting it in another phone and trying it.
If it doesn’t happen with the new sim, the problem is inside your phone.
If it still happens, have verizon give you a new sim. If it continues, it is a problem inside verizon. He said there were some issues inside phone companies a while back where they had been compromised, but you would think Verizon would have already checked themselves.
-As a last resort, back up your phone data and do a hard reset of your phone back to factory settings (wipe everything) and reinstall only the apps you need and only install from the google app store. This will be a time-eater,
This issue is interesting to me because there are so many ways that phones can be compromised – one reason I don’t do any financial transactions on a phone. In fact, I still keep two phones – one I only use for interacting with people in China because I don’t trust all of the apps I need to have (WeChat, etc.). Paranoid? probably.
This occurred to me today. Jan 26th, 2024.
I got a missed call from the 920-455-8573 number, while ringing into Charles Schwab.
Did you ever get any responses to your inquiry? Any ideas why this is happening?
Supposedly May 10 is my date to transfer to Schwab. Have caught a few comments along the way from members here that it is also they are finally being transferred over. If anyone has any new thoughts or observations of Schwab’s handling of Canadian tax issues, specifically with IRA accounts please chime in.
That’s my date, too, Pig….. immediate reaction was to be happy to have been pushed back two months.. I consider Bob-in-De the King of Badgering re Schwab and their [mis]treatment of Canadian tax issues at Schwab and best of my knowledge he was never successful… He’s another one I miss having around here these days….
2WR, dreading the move. But I am curious how it will all turnout. Taking some of the things everybody has mentioned in this thread and trying to come up with a plan so I can control the narrative (so to speak). I don’t mind splitting things up, Grid has mentioned the OTC issue, I do like to dabble in that area so perhaps I will split up down the middle and move one half to another brokerage. Will try my own hammer to go along with Bob in DE to get some answers on why Schwab seems bent on ignoring a treaty. But I have heard there are also people who have their Canadian distros handled without incident. So who knows.
Maybe 10 years ago (?) I danced with Schwab for about a year before I gave up WRT a couple of Canadian issues in my IRA .
Schwab claimed that the Canadian issuer chooses the distribution agent in Canada, and Schwab only processes what the distribution agent sends – so if the agent isn’t following the treaty, there was nothing Schwab could do. They said that if I wanted the tax treatment fixed, I had to fix the distribution agent. I talked to the issuer who wouldn’t do anything, but I could never get an answer from the agent. I really thought Schwab should take this on, but just wouldn’t, so I finally gave up.
Thanks for your input Private,
For anyone interested, this is the response I got back from TD Ameritrade when I reached out to them regarding this Canadian Taxation issue for IRAs: “TD Ameritrade clients who hold Canadian or Irish securities and are U.S. residents, are automatically opted into preferential tax treatment on dividends and interest income. After moving to Schwab, former TD Ameritrade clients will be given a 180-day grace period to provide the documentation required for the preferential tax rate. If not received, the statutory (higher) tax rate will apply”
So…..it doesn’t seem like it’s up to the Canadian issuer at all, it’s a specific decision by Schwab to try and get one over on unsuspecting clients. So I pushed back and got this next response back:
“At this time, TD Ameritrade and Schwab are acting as two separate companies until all clients are transitioned. Due to this, TD Ameritrade associates are unable to view Schwab systems or speak on Schwab policies, procedures, or products. The same is true of Schwab representatives in regard to TD Ameritrade systems, policies, procedures, and products. However, if you would like additional information regarding the policy that has raised a concern for you, it would be best to contact Schwab directly to address the concern as the only part of it related to the transition is the grace period, and as far what that documentation may entail, we could not elaborate on as we do not have access to their policies and procedures”
Probably will attempt a communication with Schwab next.
Pig I saw a while back which form you have to fill out and submit it to the broker so they have it. I can’t remember if it was on here or SA.
It might have even been Bob who mentioned what the form is.
will post it when I find out Charles, thanks for the heads up
Pig, if you decide you arent happy with Schwab, you very likely could find yourself with only a partial transfer to a new brokerage and faced with choice to have another brokerage to deal with or selling your OTC issues. I have transferred twice and got stuck with partial transfers. For some reason that they wont really mention, they will allow you to buy them but not transfer them.
Since about 80% of my preferreds are OTC, I am likely married to Schwab at final transfer. But since my HSA went to Schwab already I will be more tolerant anyways not wanting to deal with the HSA administrator to transfer also. Too many fingers in the pot to want to mess with for me.
I have been so unhappy with how poorly and clunkily TDA has handled my money moves, lack of mmkt sweeps, and OTC commissions that I have started moving all that to Fido, where it all works seamlessly–very important when you’re trading illiquids. So I will likely have only my MLPs at Schwab when they convert me in May. Then I’ll re-evaluate what’s still there.
This will be the 3rd time I’ve left Schwab over the years. They are like a bad penny.
JMO
Camroc, did you transfer any OTC issues successfully?
Yes, all of them. Easy-peasy.
May might be a ripe month for deals on the illiquid side of the house, is that what you are saying? I think that’s what you are saying? Ha. But yes, got your msg loud and clear on the OTC stuff. I have some really nice looking Canadian Bonds from their big 5 banks A rated, some at 6.5% that I would be loathe to get rid of right now. Those are my primary worry as I’m unsure if I could unload them at all because they don’t seem able to trade. Other Canadian stocks I think I could sell and be ok, pissed for sure, but can replace with some other stuff.
Pig, no I meant that a brokerage you were transferring to would refuse to accept the issues. I have had 2 including TD refuse to accept the issues as transfers. But Camroc said it was no problem with Fidelity which is good to know….No I am keeping and trying to add to my collection at the right price!
Merrill Edge was just sued by an investor for paying very low interest rates on its retirement accounts, third time for them. Apparently, the Merrill default settlement fund is a low paying 0.01% bank account with its corporate parent, Bank of America. The Barron’s story notes the differences between the cheapsters Merrill and Schwab on the one hand and the more generous Vanguard and Fidelity on the other.
People who commented complained about Merrill and Schwab, which do a good job of making it difficult to get a market rate on your funds. The commenters suggest some work arounds . I don’t deal with either firm, but investors with accounts there may find the story and comments useful.
Merrill was completely unapologetic and gave a classic Clark Gable response: We’ve been sued 3 times. We’ve won every time. (“Frankly my dear. I don’t give a d–n.” — “Gone With The Wind,” 1939.) Its nice to be a TBTF.
Merrill Lynch Sued Again Over Low Interest Rates in Merrill Edge Accounts
https://www.barrons.com/advisor/articles/merrill-lynch-sued-low-interest-accounts-e0056ee1?refsec=things-to-know&mod=topics_things-to-know
JMO. DYODD,
I have accounts in Merrill Edge, Schwab, TD Ameritrade, and Fidelity. They each have respective pluses and minuses. All have accessible money markets at competitive rates – currently north of 5%. Merrill has a couple of unique features with their “Preferred Deposit,” currently at a 5.02% seven-day yield:
– it is FDIC insured
– transactions prior to 5 PM (not 4 PM) settle on same day.
Latter one is applicable to all MM AFAIK.
Additional comments:
-Merrill likely has the best sign-on (or additional cash deposit) promos. It is worth checking. However, make sure that they do not hold up for a few days. I have had to call for them to release “hold.”
Yield of CD offerings at Merrill tend to not be as good as in the others.
In my experience, yield of secondary Treasury offerings tend to be best at Merrill and Schwab.
Just got the dividend for Wal Mex. I have it in an IRA account and TDA they still charged a foreign tax. I’m closing the position as I know it will be a waste of time to argue with them…..
Ugh.
you all are making me depressed about Schwab. At some point soon my TDA account will be Schwab, and the more I hear about Schwab the more I’m dreading this. TDA has never missed one of my dividend payments, they always arrive on the day they are supposed to, except the Canadian companies which take until the afternoon or the next day. The only issue I have with them are the thieves at the Bond desk, but I’m certain that’s the case with all the brokers. Sigh.
My account moved over today and it has not been an auspicious start.
They had the price on EBBGF totally wrong. It was about $5 less than at Fidelity, Vanguard and Merrill. How can they mess that up?
Then, if you go to trade it on Schwab it shows the same price as the other brokerages. The Bid and Ask are in the $19.60 range but it is shown as being worth $14.40 or so in my account.
Scott, sorry I completely missed your response to my post.
It’s interesting you noted the issue with Canadian preferred EBBGF. I also have that one, and a host of other Canadian securities and bonds. Read a comment over on SA that scared me as that person was talking about Canadian taxes being withheld in his IRA account once his account was moved over to Schwab (from TDA I think). I sent an inquiry over to TDA to try and make me feel better about what was happening and the response to me was…..not good. Basically TDA told me that they do not know Schwab’s “policy” on Canadian withholdings. My response back was it didn’t matter what Schwab’s policy is, that the treaty signed by the U.S. and Canada is the only policy that should matter. Anyway, to put a long story short, each day I’m less and less enthused about this upcoming transaction, of which I still don’t know the date. I’m now contemplating just pre-empting the transfer by moving my account to Fidelity or Vanguard.
If anyone has an opinion on this please chime in. Been a TDA (and its various predecessors) account holder for 33 years now. Tough to make a move but I feel like I might have to if I can’t get some clarification on some things.
Update: apologies to the group as I’m just now reading all the excellent posts regarding Schwab, not sure what the hell I was doing during this stretch, but it certainly wasn’t reading comments on III site, lol.
Pig just raise hell with Schwab like you did with TD on ERRAF back in the day. Where is the bulldog Pig I used to know? I have Vanguard as one of mine but remember they don’t do OTC anymore at all.
The odd thing I have discovered since that original post is that EBBGF is always listed as being worth less than it is trading at during the day. But when the market is closed it seems to match up with the values at the other brokers.
It is just really odd. I have no idea what could cause such behavior. And thanks for the heads up on the taxation issue. I guess I will find out about that soon enough.
Scott
I’m finding it’s best to look at the free TMX web site for the real prices of Canadian preferred shares.
Hey Pig,
Two of my accounts were transferred over to Schwab from TDA over Labor Day weekend. Have a Roth IRA and taxable account now with Schwab and both contain EBBGF. Received the EBBGF Dividend on 12/1 and foreign tax was withheld in taxable account but no tax withheld in Roth. So looks like they withheld correctly in this case. As an added bonus, was being charged $5 commissions on EBBGF purchases while at TDA but now at Schwab these purchases are commission free.
That is great to hear Rhino.
lol, oops. Tim. Wonder if you can delete the above post of mine
Interesting you should mention EBBGF in relation to TDA and transition to Schwab because in November, I did the opposite and moved EBBGF into TDA from Fido. I already own EBGEF and EBBNF at TDA in taxable account, for reasons I don’t remember as opposed to having them in my IRA, and have had no trouble dealing with withheld taxes and capturing the equivalent tax credit at tax time via TurboTax… I transferred EBBGF in because of Fido’s inexplicable, unpredictable, on again off again policy of charging $50 per trade… Not wanting to deal with that uncertainty I moved GF to TDA. At first the transfer went smoothly, then all of a sudden it was reversed and they went back to Fido….. Fido claimed TDA rejected it, TDA claimed Fido took them back at their initiative, not TDA’s.. Ultimately Fido claimed GF was not DTC eligible so they had to come back…. Then, just yesterday, it was reversed once again and back they went to TDA. Explanation is none, with each claiming check with the other. What a farce…. Now I’m waiting to see who’s going to end up paying me my dividend. So far, nothing’s shown up at either firm and nothing’s been paid on the other two ENB preferreds I have at TDA so we’ll see….
And as far as the transition to Schwab, I’m told I’m to be moved in March… I too am trepidatious about it, but will give them a shot… If they screw up the U.S./Canada treaty treatment, that’ll count as strike 1.
2wr,
Got to love when brokers pass the buck and play the blame game. I can completely understand your trepidation with the move to Schwab. After hearing some stories from others who previously transitioned, I was also nervous as my move date approached. While I found TDA’s interface so much more user friendly, I must admit the overall Schwab experience hasn’t been as negative as I may have been led to believe.
I’m probably nitpicking here but the one downside I have found with Schwab is the speed at which they post dividends. TDA would routinely post dividends to my account the evening before the pay date, so that money was in my account and able to used on the pay date. With Schwab, I have yet to receive a dividend until after close of business on the actual dividend pay date and sometimes the following business day. While this is not a major drawback it is a bit annoying once you’re spoiled with fast dividend pays to go backwards to less than quick payouts.
At TDA, it seems like 90% of dividends post before the open, with the rest after the close.
Schwab never posts them before the open, but more of them are appearing at random times before the close. For example, yesterday 12/1, most of the dividends posted in a batch at 2PM ET, but the last one (V) came in around 6PM.
Anybody with any of the 3 USD ENB $25 preferreds at TDA seen the 12/1 dividend yet? I have not but I thought it was too early to complain.
2WR, I have not received anything as of yet.
2wr, If you recall several of us posted that Schwab does NOT handle the Canadians correctly. Boiled down to Schwab’s third party vendor that makes final designation. Bob in DE was on the warpath and wanted us to file with agencies, etc. Too much trouble for me, I just moved them to IBKR. Subsequently, sold as they required too much time and glad I did as USA tech stocks soared.
Thankfully, my experience with Schwab is top rated. I use several brokerages and none compare to Schwab. I think a lot of it comes to one’s personal representative as I have always had wonderful service.
Of course if I didn’t , I would move to a different brokerage. That is what makes America Great!
Sure, I remember that and I remember how fervent Bob-in-De was about fighting the issue with Schwab to no avail… I suspect if I’m not moved to Schwab until March I’ll be in one of the last groups to be moved so I’m hoping that maybe by then more than just TOS from TDA will have a positive influence on Schwab… That being said, they’ll be on a short leash with me…..
Although everyone I deal with at TDA tries very hard to resolve issues and be helpful, and I know I’ll miss them, I never know what somebody talks about their relationship with their personal rep… If that means the local rep, then I’ve never found much reason to talk with her… Most of the time I’m better off starting my conversation with any of the people (ooops! I almost said “guys” lol) in Private Client Services. Just like my experience everywhere else, many of them have what I believe is taught behavior to say anything, whether they believe it’s true or not, if they believe their response will “satisfy” the caller…Thankfully I think I have a pretty good b/s detector in me to know when that’s happening, but overall, I’ve been impressed by TDA reps and their willingness to help resolve issues. IBKR would most likely be on the top of my list were I to look for another firm to consider.
My EBBGF 100 share purchase 2 weeks ago at 18.62 is now up a full point or +5.3% …. You know what that means? That means that given Fidelity’s hit or miss policy on charging $50 per transaction on this “ending in F” security, that I have now broken even if I sell it…. Rather than do that, I decided to transfer all EBBGF shares to TDA and consolidate my ENB preferreds there. At least I know definitively that I’ll only get charged 4.95/trade instead of guessing whether or not I’ll get charged $50 at Fido. Yes, I know most will say it’s 6.95 not 4.95 but years ago I negotiated down the commission on TDA and to date the 4.95 has stuck and they claim it will transfer with my account when I get moved in March.
This surprises me because overall, I’ve felt Fidelity improving in many area while TDA was losing its allure (other than TOS) .. I would have thought I’d move funds out of TDA before I’d be moving more in….. .Oh well
Subject: Customer Service@Schwab. Schwab, up until maybe a year or two ago, seemed to have pretty decent customer service – many of the reps seemed knowledgeable and interested in addressing comments. However, my experiences with them over the past 1 to 2 years have made me re-evaluate … some of their people don’t seem to know their commission schedule details, for example … some of their people don’t seem to read the messages sent and gave a response that acted like the message was about something different than it actually was about.
I happened to run across a re-post of an article about the Schwab CEO from 2018 that stressed their customer service commitment, and that’s prompted my post here today … in my experience, the customer service there is not today what I experienced back in 2018….
Those with Fidelity, E-Trade, and IB who’ve had to interact with customer service people there over the past couple of years: are those organizations now doing better than Schwab at customer service?
I rarely call customer service it’s a waste of time. Schwab makes more mistakes than most brokers and often hold dividend payments for a day or two. Fidelity has 5% divvy on sweeps account and that’s enough to make up for all their faults IMO.
If you have $1M in assets at Schwab, make sure you are enrolled in “Schwab Private Client Services”. It’s supposed to give access to a higher tier of agents.
https://www.schwab.com/wealth-management/private-client-services
If you have $1 million why is it all at schwab?
You reminded me of yesterday. A friend of mine went through a BoA bank machine to get some cash. The guy before him left his receipt in the machine and he took it to show me. This guy withdrew $800 cash. But dont worry, the receipt showed he (or she) still has over $2.2 million in his checking account. But he still got hit with a $3 transaction fee, ha.
That’s actually sort of relevant – the Schwab debit card offers worldwide ATM fee rebates – I also find their remote check deposit works well, better than my main bank’s.
I think there are a number of reasons why someone keeps most or all of their investments with just one broker whether they have $1 million or more or they have $100K or less. I am not a Schwab user but using one broker simplifies things and also at certain asset levels gets you a better / higher level of customer service
I don’t think you read what I wrote, but what is the problem with having $1M at Schwab? That’s what we’re here to discuss, after all.
Martin, Because of what David posted.
I know I complain a lot about challenges at schwab, but I keep meaning to post this little bonus about trading at schwab:
If you use the “all-in-one” tool on schwab.com, you can pick from multiple types of orders that offer nice flexibility. I have had some flexibility at other brokers (when Schwab had almost none), but Schwab is now pretty flexible.
Confession: I don’t know when these expanded order types became available. May have been years ago, but a rep told me about them a few months ago – and it was a surprise to me.
Schwab.com now lets you choose from a whole bunch of order types:
-Day (regular trading day)
-Day + extended hours (covers extended hours from 7am to8pm, plus trading day)
-Good til cancelled (and you can pick any day up to 179 days out for expiration)
-GTC + extended hours (you pick a date up to 179 days out, and order covers all regular and extended hour sessions until then)
-am extended hours,
-pm extended hours
-(plus Fill or kill and immediate or cancel)
I like their new GTC because I like to be able to set a date. For some issues, I want finer control (like cancelling the day before ex-div, etc.). than the old “blanket” 60 day GTC. Its also nice to not have to have orders expire so often.
I like the ” + extended hours” for some trades. For some issues, extended hours sometimes offer oddball pricing I want to take advantage of. (in fact, I had a couple of little GTC + extended hours orders fill this afternoon.
There are, of course, some limitations. key ones that jump to mind:
-You can’t use the expanded order types from Streetsmart edge. It is written/supported by a vendor, so I don’t know whether it will ever get updated.
-you can’t cancel or modify expanded order types from anywhere other than the website (and on the phone, I think). So if you place an order on schwab.com, you have to go back to schwab.com to modify or cancel it.
Private – I think many / most of those have been available at Schwab for a bit.
Their FOK and IOC in particular seem a little more flexible there than some others seem to be.
I’m new to Schwab via the TD takeover and I am not impressed with their platform. However, their customer service has been quite good.
Schwab is playing catch up with the 21st century. I’ve had many of the ‘bonuses’ you described at Interactive Brokers for 20+ years. Be that as it may, at least you’ve discovered new found flexibility that helps you facilitate your trading.
Now that my E*TRADE acct has been moved to “E*TRADE by Morgan Stanley”, Foreign Tax Withholding is not reported. Instead, MS silently deducts it from the dividend. No other broker does this in my experience. Infuriating.
Does anyone know whether MS correctly reports Foreign Tax Withheld in end-of-year 1099s?
You can change the amount on your tax reporting if it’s wrong. You might have to defend it after a mailed inquiry from IRS. Happened to me a few times and they never challenged my answers. Though you have to be paying attention to the numbers. Morgan Stanley’s clientele is wealthy people who don’t care about nickel and dime fees so they probably don’t notice things like that. Buying etrade was a strange move for them.
I thought today was my big TD transfer to Schwab day. I guess I was wrong. My HSA transferred, by my other accounts are still trading at TD. Rep said it could even be next year before the transfer.
Same exact thing happened to me. 1 account transferred. 3 still left at TDA. What a joke. I even received emails that said all accounts would transfer over the weekend. Obviously a learning curve, but Schwab’s platform seems cumbersome compared to TDA and Fidelity. As an example, REGCP on TDA shows 2800 shares traded with a clear bid/ask spread. On Schwab, it shows volume of 0 and no bid / ask at all. I have to click on the buy button to see bid/ask and it’s still showing no volume.
Oh well. Guess I’ll give it some time to learn the new platform…..
I have not heard a single thing from TD about transferring my account.
I still have a TD account that has about $20 in it. it was a divi I received after I had moved my account from scottrade to schwab (during that takeover), so it got rolled to TD. I keep it just so I can access research, etc. on TD.
I asked schwab when I would get transferred (while I was on with a broker about something else). He laughed and said probably in the very last batch.
I got an email today that my tiny TDA account will move to Schwab on Nov. 6.
They are now officially scraping the bottom of the barrel.
I am moving the same day. I will probably give it a look and kick the tires, but I suspect most of my accounts will move over to Fidelity where the bulk of my money is anyway. I might choose IBKR though because I don’t have an account there and they seem to offer some things the other brokers don’t.
I have to keep enough at Schwab though to keep using ThinkorSwim so it all gets very messy at some point.
I’ve been at IBKR for nearly 25 years. It’s not the easiest platform to learn but for trading speed, it’s fast. You can buy or sell an equity in as few as two mouse clicks. Creating option combo orders is cumbersome.
I was with TD for nearly as long and was migrated to Schwab in June. I was lost for a few weeks. I ran into some funky things and I had to contact customer service a number of times. At the same time, I opened a Fidelity account. IMHO, Fidelity’s platform is smoother than the others. The customer service at Schwab and Fidelity has been top notch.
I still havent received info. I must be the last batch other than my HSA they moved already. Im fine with it since SOS hasnt been moved yet. Somebody mentioned ones that used it extensively would be going last. I dont know if that is true or not.
Same here. After much fanfare by Schwab, a surprise that only 1 of 3 accounts transferred over.
Schwab site appears underwhelming and a bit clunky compared to TD. Fidelity on the other hand continues to improve. Considering a consolidation to Fidelity.
They haven’t contacted me at all.
I have a TD account because they were able to take something I owned when Merrill would no longer hold it despite selling it to me. I suspect that will put me at the end of the line for a changeover.
Think or Swim is the only reason I may keep an account with them after the changeover. I have a key spreadsheet linked to it. I am not even sure any of the other brokers besides IBKR would have something which can automatically pull quotes like ToS allows. I had better start looking though since I don’t trust Schwab not to screw it all up.
All 5 of ours transferred. I am totally lost on Schwab.
Hey Don,
One thing I would suggest – ask them to set up a phone or phone/video appointment with a streetsmart edge (SSE) specialist. I did that when I transferred in and it made a world of difference.
The specialist gave me at least an hour one-on-one live tutorial, plus he helped me set up my SSE “desktop” in a way I could understand. He was actually knowledgeable about the system at the broker I was coming from, so it was super helpful.
Not perfect by any stretch, but it gave me enough of a “leg-up” to get going so I could figure things out.
Thanks. I will do that.
Schwab has a blurb on their site today indicating that SSE is going to be sunsetted in the future as they go “all-in” on think or swim (which it seems they are also in the process of rebranding)
FYI
What surprised me about this is that you have to actively switch your Schwab accounts to TOS, and once you’ve done that, you can’t go back.
I hope there will be some kind of migration tool for SSE watchlists and layouts.
Grid,
What do you think of all the talk about schwab being in trouble and possibly bankrupting (e.g. today’s video in diamond nest egg)? Anybody thinking to move out of schwab (or td if still there)? I have various accounts in both and am considering moving out. I also have accounts at Merryll and WellsFargo.
If I don’t want to consolidate into Merryll or WF, what other brokers do you like? Fidelity?
dd, I havent heard anything credible that suggests any problem. Even if there was that would be with the bank side. The brokerage funds are walled off and segregated anyways. I’m personally not losing any sleep over it. I still have a Vanguard account, but definitely am not considering moving any of the future Schwab money there or opening up another account. But that is just me.
one yes for Fidelity
If you own MS-F or NI-B check the last dividend you received – especially if held at Vanguard. They reported these dividends as ‘Interest’ in my case.
When I called Vanguard, I got a very disappointing response – they told me I must contact the issuer – Morgan Stanley!! After calling again and speaking to their bond desk, they are now looking further into the matter. Has anyone else have had a similar experience?
Am I wrong in thinking that these preferreds give (taxable) interest rather than potentially QDI dividends?
I received a response from Schwab concerning how dividends and interest are paid out sporadically throughout the day. Basically the information was if they receive the payment “in the morning” it will show in the account in the afternoon and payments received later in the day show up the next morning.
So sounds like there will not be anything changing regarding how they handle income coming into your account at Schwab. Kinda different from what happens at other brokers, but I guess that’s just the way it is.
Anyone have experience with Schwab’s Intelligent Income (robo advising) platform (SIP)? As I get older, I am becoming concerned about my ability to effectively manage my dividend / interest investment portfolio. I am looking for a cost effective alternative. On the surface SIP appears to meet my needs and has an option to focus on dividend / interest investments.
Planning to give it a trial with a mid 5 figure investment. But, looking for additional feedback before I run the trial.
I have been running into an error in Schwab’s StreetsmartEdge for a while that I wanted to share in case others hit it.
If you have a buy order for a preferred stock that expires and you resubmit it, it sometimes goes through with a corrupted symbol, so it is essentially a buy order for a non-existant symbol.
I think it has to do with bad interactions among different parts of schwab’s systems that use different nomenclatures for preferreds. There are at least 3 different nomenclatures in different parts of schwab. For example, the Allstate J preferred might be ALL/PRJ, ALL+J, or ALLpJ in different parts of Schwab.
Example of the problem:
I had a day buy order in StreetsmartEdge for ALLpJ (SSE uses the lowercase p nomenclature). It expired at the end of the day.
When I hit the resubmit button, SSE entered an order for ALL PRJ. This is an invalid symbol (doesn’t fit any of the Schwab nomenclatures). If I try to research that symbol (by right clicking and selecting “research” it brings up a blank page. Schwab support confirmed that the order with that invalid symbol would never trade. That is actually how I found the problem in the first place – I had an order that should have filled (it hit the price) but it hadn’t. I called Schwab support and they said it didn’t fill because it was an order for an invalid symbol. I tried to get them to make it right since the problem was on their end, but they refused because I couldn’t “prove” it was their fault and not mine (how could I have entered a trade for invalid symbol – their system won’t allow that).
If I manually re-enter the order for ALLpJ, it gets set up properly.
it only does it once in a while (couple of times a month?), and I can’t figure out what triggers it. I talked to schwab tech support, and they are baffled. This has been going on for months and they won’t assign someone to work on it because I can’t recreate it “on demand”. Nice to know that I have to debug their systems.
So, I just have to watch that orders I place don’t have that “space, PR” in the symbol.
Private, thanks for the info, good to know. After they transferred my TD account I tried placing an order and was pulling my hair out as I couldn’t figure out their system for symbols which is different from what TD used.
BTY, any suggestions for parking short term funds there to get a higher rate ? I seem to remember somewhere here this was discussed and also that you have to move funds from the higher paying fund to the trading fund. Schwab is holding my funds in a trade account paying .25% !
SNOXX, Schwab money market treasury fund. 4.7% yield. You have to sell to free up funds, no transaction fee.
Hi Timdman,
re: “You have to sell to free up funds,” were you referring to Schwab or TDAm?
In my experience at schwab, you don’t have to sell schwab MM accounts to free up cash to place a trade. You can allow the MM fund to “back” a buy order (of course, you will have to sell to pay for the buy if it executes). I don’t recall having to sign any forms to enable this (in a cash account or in an IRA), but I have this on all my accounts (my accounts are older than my memory can recall).
If you get your account restricted (not paying for a trade when due, free riding, etc.), then schwab will require you to have settled funds in your account to place a trade.
Schwab-Their representative actually suggested that I use that money Market Due to the large amount of cash in the account. It is an IRA and he said that if I want to make a trade and don’t have available cash then I have to sell To free up cash the day before I place a trade. I don’t do any more urgent or any kind of fancy stuff
Hi Charles M, thanks for all your posts.
I currently have accounts in both Schwab and TDAm.
Some notes on Schwab (non-margin account):
1. You can place buy orders without first having to sell MM funds. I sell MM funds on the day they are due.
2. MMs pay dividends on 15th of month.
3. MM funds can only be bought with funds that exceed the total amount of your outstanding buy orders. At times, I cancel all my buy orders to maximize buying into MM. Thereafter, I resubmit the buy orders.
4. Unlike TDAm, Schwab notifies via email when an order has expired.
5. Paid interests and dividends tend to appear in account late on payment date or the next day. Account history will show the “effective date” but nevertheless posting may be one day late.
6. Check your 1099, especially with illiquids. Each tax season I have to call Schwab to correct qualified dividends reported as interest.
Please note that Private is likely the guru for the ins and outs at Schwab.
Best regards
I am far from the guru on schwab, but I have been pounding on their silly systems (with my head, mostly) for a bunch of years.
Schwab has a bunch of money markets, including SNOXX as mentioned above. All have the one-day settlement feature.
https://client.schwab.com/secured/money-market-funds
Schwab uses at least 3 different nomenclatures for preferreds. For ALL-B (on other brokerages), Schwab uses:
– ALL/prB, which works on most of schwab.com
– ALL+B, which works on other parts of Schwab.com
– ALLpB, which works in streetsmartedge (SSE).
Note that if you ask for SSE to research a preferred on schwab.com, it will usually fail because SSE will ask for info on ALLpB, which schwab.com doesn’t understand. Pretty silly – any high school programmer could do a look up table, but schwab had been broken like this for many years.
For better customer support – call the 800 435 9050 number. My experience is that it often gets you to more experience people.
The more I hear, the more I am thankful that I have been a ThinkOrSwim user… As I understand it, if you’re been an active TOS user at TDA, your account will not be Schwab-ized until they are 100% capable of incorporating TOS into the Schwab platform. That seems to be the only reason I am not yet going thru all the same transition crap as everyone’s describing. I still dread that day and nothing anyone has said here gives me any reason to look forward to it.
I am in the same boat with you 2WR. I have spreadsheets which import data directly from ToS which I use daily. I put a lot of work into creating those this past year so I am not at all eager to see which way Schwab comes up with to break everything — which I am sure they will do.
Luckily, I do little trading in that account and it is not one of my larger ones so that aspect of it won’t be so bad.
TdA was my goto site because I liked their watchlists. Schwab watchlists are awful for preferred stocks I only go there to make trades I noticed on better sites. Gradually lowering my account if they don’t get their act together.
I also like tda’s app alerts/watchlist. Who is the best for replacing those once my account converts?
Thanks for all the good information, my account just switched over from TDA last week. Time to learn a whole new system
One good thing for new clients at schwab. You can request a free one-on-one online tutorial on streetsmartedge. The guy I had helped me get my SSE screen set up like I like it, talked me through a lot of scenarios, answered every question I had. I had to schedule it (I think it was the day after I called to schedule) and was easily a full hour.
I don’t know what they call it, but it was a great investment of an hour to “jump start” up the learning curve.
Also, I use SSE in the cloud. I have used the downloaded version in the past, but it would always want to download updates at the most inopportune times (and it wouldn’t load until it had the updates). A major problem when I was running on slow cellular data. SSE is (I am told) also how apple users have to run SSE (I don’t do apple, so I can’t confirm).
Green & Gold, Private I may have played it to close on the MM with Schwab. I moved the cash over on Monday then I put in a bid on Tuesday. End of the day I checked and it had executed so I turned around and put in a sell order on the MM to cover it. This morning I had a nice red warning box saying account was negative. I called and talked to a rep and he said the stock buy would settle at end of the day today and so should the MM sell. Hope I don’t get put on restriction.
Just my schwab experience, but I find the best way to avoid the overspend restriction if you are going to get hit is to sell something else that doesn’t transact like a mutual fund (money markets transact like mutual funds). If you sell a stock, you should receive instant “credit” for it, which will allow you to avoid the overdraw. A good broker should suggest that (that is how I learned it).
Charles, thanks for sharing that experience. Makes one wonder if TDAm transferred account continues to be on a separate (TDAm) system. I now recall that my rep called and expressed that my account would likely transfer over later this year but I would have two accounts, the respective Schwab and TDAm accounts, and that I could consolidate them, either to the TDAm account or to the Schwab account, but I did not have to.
So your warning message may be similar to the (cream color) warning I get in my TDAm IRA account:
“You are in a cash debit call in xxxx account. Take immediate action.”
I get warmings because (in a non-margin account, i.e., TDAm IRA) to buy:
1. I put a sell MM order for the “buy amount,” prior to placing the buy order (enabling fundse to buy),
2. place buy order (e.g., CD or security with a settlement day later than the subsequent day),
3. cancel the “sell MM order” in Step 1 (prior to 4 PM ET) on that same day,
4. re-enter prior to 4 PM the “sell MM order” on the “trade day” to cover the buy order (i.e., trade day is one day prior to settlement.
The cream colored warning shows up in my account the day after placing the buy order and remains for days, until cleared on the settlement day.
Your post is actually is good news. We may just be getting the TDAm system inside Schwab. We (those with an existing Schwab account) might even get two different 1099s.
Thank you and best regards
Green-n-Gold I had thought that I might have to cancel all my trades then move the cash to the MM fund and re-do the trades. Reading your post just confirmed I was thinking correctly. You reinforced what Private has been saying about selling / moving to pay for any trades that executed, just have to stay on top of that if I want the higher MM rates.
It is really disappointing about how annoying Schwab has made buying MM funds. They just changed to this process earlier this year. Before that, you didn’t have to cancel open orders.
Schwab makes most of their profits from investing client money that is in their near-zero interest accounts, so they want to make it hard for clients to earn on that money.
You generally don’t have to cancel open orders in a margin account, since the margin buying power will be sufficient to cover them. I have certainly never had to do this.
You are right, David, so long as your margin limit exceeds the sum of the value of any margin loan you have, plus your open orders, plus the value of the MM fund you want to buy.
Generally shouldn’t be a problem, but can be if you have a lot of orders on margin or a sizable margin loan or a lot of non-marginable stocks in the account, etc.
That same problem can occur in the regular Schwab system – very annoying. They have a bunch of other glitches as well — some of which they’ve known about for quite a while but seem uninterested in addressing … the expiring credit order turning into a debit order is one those….
I hold a position in Energy Transfer LP 6.500% Series H Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units, cusip 29273VAN0. As many of you know, this is an ‘institutional’ issue: no ticker, you buy it at the bond desk, but it trades flat (no accrued interest paid by purchaser), $1000 liquidation preference issue.
I hold a position at two brokers: Vanguard and Fidelity
– Vanguard characterizes the income as dividends
– Fidelity characterizes the income as interest
Which is correct?
The prospectus (https://ir.energytransfer.com/static-files/55b6b0b3-4b87-4dcc-919b-549f36460ed5) says “We will treat distributions on the Series H Preferred Units as guaranteed payments for the use of capital that will generally be taxable to the holders of Series H Preferred Units as ordinary income…” It consistently refers to ‘distributions’, carefully avoiding either the term ‘dividend’ or ‘interest’.
My understanding is ET is a MLP. MLP’s do not pay “dividends”. Typically this falls under “K-1” status.
From ET….
ET is a publicly traded master limited partnership. Unitholders are limited partners in the Partnership and receive cash distributions. A partnership generally is not subject to federal or state income tax. The annual income, gains, losses, deductions and credits of the partnership flow through to the unitholders, who are required to report their allocated share of these amounts on their individual tax returns as if they’ve received these items directly. You will receive a K-1 tax package summarizing your allocated share of the partnership’s reportable tax items for the tax year. We estimate that Schedule K-1 tax packages will be distributed to unitholders of record in March for the preceding calendar year.
If you should have questions regarding the Schedule K-1, contact our K-1 Tax Support Center at:
ET Common Units K-1 Tax Support Center: 800-617-7736 Monday-Friday 8am-5pm (CST)
ET Preferred Units K-1 Tax Support Center: 833-608-3511 Monday-Friday 8am–5pm (CST)
Neither broker has it correct..
It is “ECI” distribution that will be reported to you on the K-1 in box 4b.
I have the same kind of security – Enlink F/F bond desk preferred Cusip: 29336UAH0. There is no K-1 involved as it falls under the guaranteed payments for use of capital” exception.
My statement is wrong. There IS a K-1 issued for the security I mentioned. However, due to the quoted exception there 1) is no UBTI risk in tax deferred accounts, and 2) the basis is not reduced as a result of the payments. This explains my error (to myself anyway) – in my mind, this renders the security to be the same as any other non-qualified dividend (taxed as ordinary income). What I don’t understand is why this security would be treated differently than any other MLP floating rate preferred. Or is it? Do the $25 par ET floating rate securities report UBTI and/or basis reduction on K-1s?
I didn’t read the prospectus, but I would bet that somewhere down in there are “weasel words” that say that what you read is what they intend the tax treatment to be (almost all K-1 type prospectuses I have read have them). It allows them to say what they expect to happen, but protects them if that doesn’t happen.
Usually the reporting will be fine, but if the company gets into serious financial trouble, that tax treatment may fall apart.
Not a high risk usually, but a possibility.
Today TD listed the value of AGRIP as $0.0001 per share in the holdings table. The last trade was on 5/15/23 at $100.06. No trades today but their qoute screen shows a bid at $100. Does this make sense?
Does anyone know if AGRIP is on the expert market or affected by Rule 15c-2-11? and if the 0.0001 listing is related? and if this could create difficulty in selling it?
It is listed at $100.06 by Merrell Edge.
MFZ, It is not an expert market issue. However it was IPO’d as a 144a preferred. Over time it has become a pink sheet for whatever reason. But its origin may cause some “goofiness” as you encountered several brokerages as recently as a couple years ago wouldnt allow trading if it. But their financials are publicly available so there will be no “expert market” issue anyways.
Many Thanks Scott, it gets corrected on and off at TD.
And thanks to Grid who is always generous with his valuable input.
If you access the quote, and your position, in ‘Think or Swim’, you will find the data on AGRIP is reported correctly. ( at least I did so ). The standard display is often mixed up.
MFZ
I own AGRIP at TDA. I suggest you don’t even bother looking at it unless you want to buy or sell; the pricing/data is a daily mess on the ‘positions’ page.
Sometime the price is correct, other times it displays zero, and it throws off all data related to the quote. The price on the ‘quote’ display is usually correct.
After contacting their reps by phone or email a few times, I just gave up trying to get the pricing corrected. The pricing displayed even changes when no trades have been made that day or on many previous days.
Your monthly statement will show all AGRIP data and related pricing
correctly ( such as your portfolio totals, yields, etc ).
I don’t worry about it. My concern is what happens when my account is switched to Schwab.
Howard, I just placed a buy order for AGRIP at Schwab (as a test) and it went through. Same for CKNQP but it did NOT go through.
If my memory serves me, someone may have posted that some illiquid securities could be bought but not sold at Schwab.
Just a suggestion – be very careful buying these 144a (or 144-like) issues at Schwab. Make sure you will be able to sell them.
I got into a nasty situation where Schwab would let me buy some Cobank securities that were 144-like, but when I wanted to sell, they said I had to (1) go find a qualified investor on my own who wanted to buy the shares, (2) get the buyer to fill out paperwork, then (3) schwab would complete the transaction for us.
Insane.
Ultimately, I just held the shares I already owned to maturity, and made them reverse the shares I had just purchased the day this issue came up.
A few weeks ago, somebody on this board was looking into another Cobank issue and I called schwab about it. The phone agent told me “no problem – why would we ever sell you something you couldn’t resell?”, but I pushed him to go check with the 144 desk to get a definitive answer and (surprise), it was another issue that we could buy but never (practically) resell.
Stupid that they make it a trap. Personally, I think their 144 desk is just wrong. I have had several long discussions with the lady that runs it, but I am only a client, so they don’t have to listen to me.
That said, some other brokers don’t have this craziness (Scottrade was fine about it, I think Gridbird traded some at Ally (I may be misremembering?). Just be sure you understand what you are getting yourself into with Schwab.
Nasty surprise today at Schwab.
they had posted a note a few days ago that they were going to change how they showed “buying power” in an account, and today they posted “Balances now reflect open orders. For more information, view details by clicking Buying Power.” on the order page. Sounds pretty benign – but there is a nasty change they didn’t talk about.
What they didn’t say anywhere is that effective today, you can no longer place orders backed by funds in money market accounts. You have to sell the money market account (and settle to cash) before you can place an order.
This is a huge change.
I have been keeping essentially all of my cash in MM funds, and for many years I could place orders backed by the MM fund balances (and if an order filled, I had to sell the MM fund to cover). That is no longer allowed. Of course, Schwab didn’t announce that. They just did it.
It is not a huge problem in my taxable accounts (because of margin), but in my retirement accounts (traditional, inherited, Roth), it is a big issue because they can’t have margin.
Fundamentally, Schwab is ripping off clients by not allowing us to keep money in MM accounts and instead forcing us to keep money in their crappy bank that pays essentially no interest.
I just spent an hour on the phone with Schwab and nobody I talked to could tell me where this change came from, only that it is real. A couple of guys tried to tell me it has always been this way, but it wasn’t as recently as yesterday.
It is a significant problem for me because I keep a lot of GTC orders backed by MM funds, so I can earn interest on my money while I wait for speculative orders to fill (or not).
One more sign that Schwab is feeling the pressure, and is picking customers pockets to line theirs.
I need to pull back a bit on my post above.
While I did have the conversations with Schwab I mentioned and some of my retirement accounts act as I described, a couple are acting like they did before (allowing me to place orders backed by MM fund balances). It makes no sense.
To test things, I just placed a couple of orders totaling over $2000 in an inherited IRA account (can’t have margin) that has $49 cash ) and way over $2000 in MM funds. The orders went through.
So, I have no idea what schwab is doing. The reps said things have changed to require cash in the account to back all trades. Some of my accounts are acting that way and others aren’t.
I am supposed to get a call back from a “specialist” at schwab. No idea what to expect.
Though I do not have a Schwab account, to the best of my knowledge this has been the way it’s been working at their TDAmeritrade for a long while….. I know I moved money into the MM accounts out of the sweep accounts because of the sweeps paying essentially nothing…… There is a workaround that you can use in the non-margin eligible accounts, though. If you place the order intended for your IRA in your margin account, you are allowed to transfer the purchase to your IRA as long as you do it on the same day, possibly the next day too ….. So once trade is executed, sell MM funds to cover it, and transfer your margin account trade to the IRA….. I’ve had no trouble doing that at TDA.
Yep, that’s my experience w TDA as well. Sounds like Schwab may be aligning on TDA’s policy as part of the acquisition (“hmm, two different policies, we need to align them, which yields us more revenue/less expense?”).
Thanks 2WR. I may have to try that. I didn’t even think of changing an order to another account.
I am actually a bit embarrassed about this thread.
In a further bizarre development, I got a call back this afternoon. The guy wasn’t a “specialist”, but he is a senior broker.
He said he was not aware of a change, other than that the trade ticket tool will now tell you how much money you have available to trade (as it has in the past), but it will subtract the amount you have already “committed” in open orders So, just a change in what it shows, not what it does.
I told him what we had tried earlier with the other schwab guys on the phone and he was mystified why it didn’t work with them on the phone, but more confused about why it didn’t work in one account but did work in others later in the day.
We walked through the examples I had tried with the earlier guys, and they all seemed to work OK, including the one that wouldn’t work this morning. I was shocked.
It was after the market had closed (he didn’t think that should matter). We set up trades in several other accounts and all worked just like they did last week.
Baffling to me.
His one thought was that the broker on the earlier call may have set up a trade in the account we were using as our “test bed”, and never cancelled it, so I couldn’t set up a trade in that account (as a test with the guys on the phone) because the MM value in the account was “tied up” by the broker’s order. (I am not quite sure I understand that, and I am not sure I captured it correctly). Anyway, when we tried it hours later it worked – maybe because the first broker’s uncompleted order had timed out(?).
He was also surprised that the earlier guys told me I had to sell MM funds and wait for them to settle before I could place a trade. He said he had seen no announcement of anything like that, and he would have expected an announcement about something that fundamental. He did say there was an announcement (about 4 months ago?) that changed how you can place orders for MM accounts if you have open orders. I was aware of that announcement. It “re-ordered” the “preference” for funds in your account so that the system “tied up” cash in the account to cover open orders as first priority. So, to place a MM purchase, you had to cancel open orders so the cash was available to place a MM order. then you could re-enter the cancelled orders and they would be backed by MM funds. (Its annoying, but it is at least a set of rules I can understand).
From his comments, it sounded like maybe the guys I talked to this morning simply didn’t know anything about the topic we were discussins but wouldn’t say so. So, as I asked them increasingly difficult questions, they made up answers and backed themselves into a corner they couldn’t talk their way out of (hence the need to “have a specialist call me back”).
So, to recap:
the broker confirmed this afternoon that the statements from the guys earlier in the day were incorrect:
-There is no need to sell MM funds and wait for them to settle before placing a trade “backed” by the MM funds.
-I can place buy orders against the value of MM funds and continue to earn MM interest until I sell to cover purchases that go through.
-Schwab is not requiring customers to hold cash in accounts to place trades, or to keep trades open. they would love to have us do that, but it’s not required.
So, this whole thread may have been a nothing-sandwich based on bad information from the first group of Schwab representatives.
Ridiculous waste of half a day.
I will see what happens.
Wow, today I learned you can use MMF as buying power at Schwab. I had no idea this was possible with any broker other than Fidelity (which is still better insofar as they auto sweep in / out of the MMF to cover all trades).
So since MMF settles in T+1 , you have until the next day to sell enough MMF to cover trades. But what happens with Schwab if you don’t sell the next day?
If you don’t deliver funds by settlement, you’ll have a negative cash balance. If it’s in a margin account, congratulations, you have a margin loan. Otherwise, you’ll see a red “funds due” warning. If you deal with that within a few days, nothing bad will happen. They do have the right to sell your positions to satisfy the balance, but I’m sure they will try to call you first.
A couple of notes:
Options and mutual funds also settle on T+1, so you don’t have an extra day. Can definitely be tricky if a limit order fires near the close.
You can sign up for “limited margin” on some retirement accounts, but not all. For example, I don’t think inherited IRAs are eligible. For those, you do have to sell your MMFs ahead of time in order to buy something else.
Thanks, good to know nothing dire happens if you miss selling the MMF the next day.
To be honest, I wasn’t 100% sure this would work on my IRA account with limited margin. But just bought an MMF yesterday (settlement today) and it does appear to available for making trades today 🙂
I’m not sure how well this is known about Schwab MMF being available for buying power. Although it’s not quite as customer friendly as Fidelity / Vanguard, it’s pretty close. And I prefer Schwab for my trading account due to Street Smart Edge.
I agree with you, David. Good summary of how it works in taxable accounts.
For better or worse, I have about 90% of my money at schwab in some kind of IRA, so I am intimately familiar with how they treat those kinds of accounts.
In non-taxable accounts (like IRAs), if you don’t settle the cash due by the settlement date, they flag the account for a trading violation and will require you to have cash up front in the account for future trades. You can settle amounts due by selling MM accounts or by selling something other stock that generates a positive balance in the account (I think this latter kind of “buying against unsettled sales” is the “limited margin” you mentioned).
FYI – You can buy at Schwab in an inherited IRA (or inherited Roth) using MM fund support just like in a regular IRA. I have several of each and I don’t have to sell MM in advance of purchases. However, I have really old (10+ years) inherited accounts, so the rules may be different for newer inherited accounts (there was a huge change in the tax laws about how inherited accounts work about 5 years ago, but my old accounts are “grandfathered”).
I don’t remember signing anything to enable these limited margin or MM support features, but I may have. Schwab is the most paper-driven broker I have ever dealt with – I moved several accounts there when ScotTrade went away and I walked out with more than an inch stack of paper.
It is common for a buy order to execute near closing in an IRA and push the account balance negative, even if I placed a MM sell order to cover purchases made earlier in the session. I get little trades pretty regularly where the notice arrives after the market has closed (trade time is often something like 3:59:59 – so it has to be some algo trade). I also regularly miss being around at the end of the trading day to enter MM sell orders to cover trades that occurred during the day.
In my experience, Schwab won’t give you a trading violation if you enter a MM sale order sufficient to cover the shortfall either after the market closes or during the next trading day. Broker told me that so long as the MM sale (+1 settlement) closes at the same time as the stock purchase (+2 settlement), you are OK. I don’t do options or mutual funds in my IRAs, so I don’t know how those would be handled.
FYI – If you are about to get a trading violation for a purchase you haven’t paid for and you get a call from Schwab, the best way to clear it is to sell something other than the shares you purchased. If you re-sell the shares you just bought (and didn’t pay for) to try to settle the payment violation, you get a different kind of trading violation for a “free ride” trade. If you have a good broker on the phone, s/he will usually tell you this – but some of the less experienced/less smart folks won’t.
Sorry for the long post.
Here is the link you can use to check the margin status of your Schwab accounts:
https://client.schwab.com/app/service/margin-options
You should be able to see the margin status of your accounts on this page:
https://client.schwab.com/app/service/margin-options
I highly recommend adding Limited Margin if available.
Thanks David,
I think there must be something screwy with Schwab’s systems (surprise, surprise). I looked at the page you linked.
-I tried on several IRAs (roth, and regular). It doesn’t show me my status, but it does invite me to apply for limited margin. On my Inherited accounts, it says they are not eligible for limited margin (like you said in your original post). Funny thing is that I am already trading in all of those accounts as if they have limited margin (so I think I must have it). Maybe I applied many years ago and am grandfathered in? maybe the system that checks status for this page and the one in the trading system are different? I don’t understand, but it is working to my benefit, so I won’t ask any questions.
-Similarly, the linked page doesn’t show status for my taxable individual account and invites me to apply, even though I already have full blown margin on that account.
-For my trust account (where I also already have margin), it says I have to apply for margin on paper (I now remember having to do that many years ago because they require all trustee’s signatures).
No idea why it shows me something different than it shows you, or why it is letting me trade with limited margin in my inherited accounts. Maybe they figured I couldn’t understand it so they put me in the special class.
I love schwab and its mysteries.
Private to add to your theory, recall that literally half of Schwab’s earnings come from THEM earning interest off of customer’s cash holdings. So they have a ton of incentive to force/coerce customers to maintain cash balances that are not in their money market funds.
Related to this is that last I heard, their Roboadvisor maintains a cash balance of ~ 5%, regardless of where the risk knob is set. You want max, pedal to the metal, aggressive allocation, you still hold 5% cash. IIRC, the SEC took issue with this and fined them.
> It is not a huge problem in my taxable accounts (because of margin), but in my retirement accounts (traditional, inherited, Roth), it is a big issue because they can’t have margin.
I mentioned this in another comment, but this is not completely correct. Vanilla retirement accounts can have “limited margin”, so you can buy before you sell the MMF, but you can’t have a margin loan. I can’t find a statement of exactly which accounts are eligible, but I don’t think inherited IRAs and trusts qualify.
Hi David,
Sorry, I just put up a ridiculously long post on retirement accounts at schwab, but let me clarify about trusts:
You can have margin on trust accounts at schwab. My biggest taxable account is a trust account (revocable family trust) and it has regular margin enabled. You definitely have to sign up for it.
I remember that because I didn’t have margin enabled when I opened the account and a helpful broker who was helping me avoid a trading violation asked me “why don’t you just sign up for margin in this account and you won’t have this kind of problem any more”. Silly me – of course it would, but I didn’t know that they would allow margin on a trust account. So, I signed up for margin that day.
Can’t log in to Fidelity today from Chrome. Anybody else having problems?
I called and was told it’s a known problem they are working to fix. Able to login from another browser.
If anyone has a qualified dividends reported incorrectly as interest in 1099, it may help others that may have missed it by posting it here.
My Merrill Edge 1099 for 2022 incorrectly reported the CMS-C distribution as interest rather than as qualified dividend.
I appreciate if anyone can shed light on following.
Merrill reported CMS-C distribution in 1099-INT. Merrill rep agreed that it should be reported in 1099-DIV. It does not seem that I will get a corrected 1099 on time to file by 4/18.
Does anyone know if it would be ok to file by making the changes (deduct CMS-C distribution amount from 1099-INT and add to 1099-DIV) ?
Or should I pay due tax, file an extension and wait for Merrill to issue the 1099C ?
If I request an extension, would I be able to e-file return (TurboTax) ?
Thank you and best regards
Personally, I would file the extension.
-you can file an extension in Turbotax. It will record whatever you pay with the extension and it will show in your final return.
-You will then be able to submit the final return with turbotax when you are ready.
I do the extension every year because I get corrected 1099/k-1s every year. I then file the final return in October based on whatever info I have. If I get more corrected 1099/k-1s after I file, , I have to decide whether to file an amended return. Usually, I just don’t. Not worth my time to file a 1040X if the changes are negligible.
One dirty little secret about Turbotax – always (1) buy the disk version (not the download) , (2) save the disk (and install code), and (3) save the turbotax file (not just the .pdf files). If you ever have to open an old tax return, you will need that year’s turbotax program to open the tax file.
Intuit used to post the old versions of the Turbotax software for free download a year or so after the tax filing deadline (only real use of it would be to open an old file). I always thought that was a nice thing and good customer service. Well, in their desire to maximize revenue and minimize customer satisfaction, Intuit no longer post the old versions for free. They also won’t let you get the old download, even if you bought the download to begin with (hasn’t happened to me, but happened to an acquaintance a few years ago). So, If you need an old version, Intuit wants to make you buy it (unless you can find some curmudgeon like me who saves them all).
https://www.propublica.org/series/the-turbotax-trap
Turbotax certainly is not interested in public satisfaction or competition.
Thank you Private! You answered my question. I will do the extension. Thanks for the advice on TurboTax.
I appreciate all your help. Best regards
Can someone please supply a Charles Schwab referral code? I need it to open a new account and get the bonus promo. I don’t know anyone who has a Schwab account so thanks in advance.
Simply login to Schwab, hover over “Service,” and select “Refer A Friend.” Then, you’ll see a box that says, “Share your referral code.” Copy and paste here as a reply.
https://www.schwab.com/client-referral?refrid=REFERRNNX3K39
mcg, Thank you the code/link worked. I am not sure if the promo will work since the system recognized that I already have a TD account. I am going to go ahead and try it since there will be a mandatory conversion later this year.
There’s no bonus for moving assets from TDA to Schwab.
Also, I recommend leaving a small amount of money in the TDA account, so they won’t close it and turn off your online access.
I have been keeping about $20 in a TD account for years just to maintain access. Don’t know what will happen as the Schwab Borg assimilates TD, but it is working for now.
I was thinking of moving some of the TDA funds to my bank first.
Has anyone here ever used TDs Fully Paid Lending Income Program or similar on other Brokerage accounts? More curious than anything else. Thanks.
InteractiveBrokers has similar program, which I use for years. Give you some extra money for stock/bond you own.
a couple of things to consider:
1. If you have a margin account, most brokerages won’t let you into their “Fully Paid Lending Income Program” because they can already lend your shares without paying you.
2. make sure you understand the tax implications – your dividends may be replaced with payments in lieu. For example in a taxable account, you lose the qualified dividend tax break. Not necessarily a deal breaker, but be aware.
I was able to enroll in the Schwab SLFP program with a margin account. That was a long time ago though.
Anyway, if you are holding enough widely shorted stock to make money this way, please consider that the shorts might be right. Don’t ask how I know this 🙁
Does anyone have experience with JPMorgan’s Self-Directed brokerage? In particular, what are experiences for bonds and preferreds? Thanks!
E: TD Ameritrade – Has anyone else noticed this happening with your accounts at TDA? I own a few securities in my account such as GDLpC that do not trade everyday. If I am looking to see how my overall account is doing on the day, I cannot because of issues such as GDLpC. Using GDLpC as the example, it has not traded since Feb 7. That implies to me that I should not see a profit or loss on the day for this issue. Yet TDA shows me I’m up .77 on GDLpC TODAY. I own GDLpC at Fidelity as well… They show no P or L on the day on GDLpC. IMHO, reporting by Fidelity is accurate. Reporting at TDA is not.
This is not an isolated event. I’ve noticed this on other issues at different times as well… have others noticed also? I reported it to a rep and she says she believes it’s reporting the way it’s designed but she’ll look into it and report my observation. A variation of this is also occurring today on EBGEF… EBGEF has traded today at an unchanged price from yesterday, but TDA shows me being +1.76% on my position on the day… Phantom performance..
2WR, I see that often myself. Generally overall amount value usually appears correct. Except for my bond pricing where your bond bros are always trying to slap me with fake news low bond pricing values.
Oh sure, Grid – blame it on the bond bros…. lol… Obviously two different phenomenons as you know but I’m glad I’m not alone in what I see happening… I agree the amount value seems correct, but why make it so difficult for the client to be able to accurately answer that old Ed Koch question, “How am I doing?” when looking at what’s supposed to be his daily report of P&L? It doesn’t happen at Fidelity….
SBNCM is like that for me at TDA. It is showing a 6.35% gain today (and on most days) on an unchanged $15.40 last price.
I guess I haven’t tracked the value of the position from day to day to see if it’s actually affecting my day’s gain / loss calculations. I’ll start tracking to see what affect, if any, it is having on my overall portfolio value.
Hi 2WR, AGRIP and WELPM show up wrong also in my TD Am account. Best regards
TD Ameritrade definitely has issues with reporting P&L accurately. For example, on the overview page it will have one net gain/loss number and on the Positions page it will have another. I’m talking 100s of dollars not pocket change.
Noticed that GTC orders in Schwab now expire in six months rather than two months.
I am looking for a brokerage account for my health savings account. Does anyone have any comments or suggestions?
Fidelity HSA is decent. No annual charges to maintain it and they issue debit cards for easier paying (also at no charge). Can invest in whatever Fidelity offers – say some nice preferred shares for part of the portfolio not needed for near term spend, while the money market currently has 7-day yield of 3.96%
Thanks so much for your reply MSquare
Wonder if others had the same experience I had with Schwab this morning? I awoke to find three emails each demanding an over $50K immediate deposit to cover a maintenance call. My first though was that they were from a scammer but upon close look at the raw email I decided they were legit from schwab. If that doesn’t fill your pants I don’t know what will. Then immediately went to my account and find I made a $300K purchase yesterday. I did buy $3K worth of FFCB bonds yesterday. At this point I’m about having a heart attack thinking I must have entered the wrong amounts but didn’t think you could enter an order for more than the tradable funds in the account which was much much less than $300K and I don’t have a margin account. Then called schwab and got cut off after the rep answered the call which further increased the anxiety. Made a second call and got another rep who said there was a problem in accounts of those who purchased several types of fixed income bonds yesterday. He also said the maintenance call emails were auto generated and could be ignored but I was still worried that wonderful automatic system might start liquidating my holdings to cover the call which as threatened in the email. You would also think that the automatic system could generate an error email letting people know there was a problem. My stomach was still up to throat until about 1PM when it finally appeared the account records were back to normal
I have been a Schwab customer since the 1980s and never had anything like this happen before. Frankly, I’m still upset and had a overall bad day from 4+ hours of worry and plan to write them a major letter of complaint.
Re: Fidelity – I see two new developments on my Fidelity account…. If you’re a TURBOTAX kind of person, “OFFER DETAILS FOR FIDELITY CLIENTS
As a valued client of Fidelity, you are eligible to file your federal and state taxes at no cost using TurboTax Premier Online, or for $5 using TurboTax Premier desktop download. Get started by selecting a product below.” Sorry, I can’t a link but if you don’t find it, ask a rep… It may be an offer not being made to all clients, I’m not sure…
Also I happened to notice a notification saying “now research all fixed to floating rate issues in one place.” I played around with it a little bit and it seemed pretty up to date on rates, HOWEVER, I am not finding my way back to that resource…. Anyone else see this too? Do you know how to get to that area?
What it says about preferreds = “Research and trade preferred stocks online
Now you can research preferred stocks with adjustable rates in detail and place trades for preferred stocks all in one place. Start researching to get quotes, key characteristics, and more.” The link seems to lead to https://digital.fidelity.com/prgw/digital/research/ which doesn’t seem to be strictly dedicated to F/F though… One way or another, this is a long way to come for a broker who not so long ago denied you the ability to buy ANY F/F security without calling in…
2WR reflection on the times. Investors are back to yield chasing. Think Fidelity is just offering a service to meet that need. Buyers are buying anything that offers a good return thinking they are missing the train on share prices rising and dividend yield.
Subject: New Schwab Trading Ticket
Anyone else noticing bugs in Schwab’s new trading ticket? Biggest one I noticed was if I took an expired credit order and re-submitted it, the new ticket made it into a debit order. (But if I switched back to the Classic trading ticket, it switched back to a credit order.) Some preferred stocks also don’t seem to want to trade on the new trading ticket – Schwab uses a + sign rather than the – sign some others use in these, and the new trading ticket changes the + to something that looks like a control sequence that it then can’t figure out how to trade.
(I still can’t believe Schwab launched the new ticket with so many bugs … at least one of them I think I first noticed 6 weeks ago … and I believe was still there four weeks later … might still be there, for all I know.)
Very frustrating and these have the potential for one of my trades to turn into an execution for something I didn’t intend … so I’m thinking to move to a platform that’s more reliable as old friend Schwab seems to me to have lost their way … suggestions? Anyone else notice any of these and looking to switch?
SNewman…Suggest using the schwab server based platform “streetsmart edge”. Better in every way