Wells Fargo - no more 100 free trades (for new accounts)?

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Wells Fargo - no more 100 free trades (for new accounts)?

Postby drh » Thu Jan 03, 2013 11:27 pm

Has anyone else seen this? I noticed this on the last page of my PMA statement. It looks like after April 1 of this year any new WellsTrade accounts will no longer get 100 free trades if linked to a PMA account. Instead they get 100 at discounted $6.95 per trade. It appears the benefit remains for existing accounts or those opened before April 1. Here is the text:

Take advantage of the 100 commission-free online trades* benefit when you link a WellsTrade brokerage
account to your PMA Package before April 1st

When you open a WellsTrade account and link it to your PMA account before April 1, 2013, you will be able to use your
100 commission-free online trades per year.* A WellsTrade account lets you manage your own investments with
convenience and control.
Visit wellsfargo.com or call 1-866-224-5664 before April 1, 2013 to open a WellsTrade account and link it to your
PMA Package** to get 100 commission-free online trades per year.


Benefits for WellsTrade brokerage accounts already linked to a PMA Package include 100 commission-free online
trades and $8.95 per trade thereafter, and will remain unchanged.
Beginning April 1, 2013,
when a WellsTrade account is linked to a PMA Package, benefits will not include 100
commission-free online trades. The new benefits will be unlimited trades at a discounted commission rate of $6.95 per
transaction for online and automated telephone trades for Stocks (excluding Penny Stocks) and Exchange-Traded Funds
(ETFs) *** - normally $8.95. Also, waiver of WellsTrade IRA and standard brokerage annual account fees regardless of
PMA Package balances. Contact Wells Fargo Advisors for a complimentary consultation with a Financial Advisor.


* Qualification for discounted pricing is contingent upon having an active WellsTrade account linked to a PMA Package.
No charge for the first 100 trades per year regardless of PMA Package balances; $8.95 per trade thereafter.
Commission-free trades can be applied to commissions for online and automated telephone trading of Stocks
(excluding Penny Stocks) and Exchange-Traded Funds or to transaction fees on applicable no-load mutual fund
transactions. WellsTrade annual account fees are waived regardless of PMA Package balances when your WellsTrade
account is linked to a PMA Package as of June 30 of each year. Fee waivers based on having a WellsTrade account linked
to your PMA Package. Other fees and commissions apply to a WellsTrade account. For complete information on fees and
commissions, refer to the WellsTrade Account Commissions and Fee Schedule at wellsfargo.com. Schedule subject to
change at any time.

** The PMA Package is subject to a monthly service fee. Talk to your banker to learn about how you may qualify to waive
this monthly service fee if you maintain a minimum qualifying balance. Annual fund-related expenses apply to mutual
funds and ETFs. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC.

*** Discounts and fee waivers based on having a WellsTrade account linked to a PMA Package as of June 30 of each year.
If the PMA Package relationship is terminated, the special commission rate for trades will discontinue and revert to the
standard commission rate applicable at the time of the change.
Access to online services may be limited, delayed or unavailable during periods of peak demand, market volatility,
system upgrades or maintenance, or electronic, communications or systems problems, or for other reasons.
Last edited by drh on Thu Jan 03, 2013 11:38 pm, edited 1 time in total.
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Re: Wells Fargo - no more 100 free trades?

Postby livesoft » Thu Jan 03, 2013 11:35 pm

Looks to me like I'll still be getting 100 free trades annually on my WF accounts*, so why the misleading title of no more 100 free trades?


*I average less than 3 trades per account annually.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby drh » Thu Jan 03, 2013 11:41 pm

livesoft,

Just for you, I fixed the title.

But it does make me wonder if it is just a matter of time before they change it for existing customers.

100 trades is way more than I need as well.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby livesoft » Thu Jan 03, 2013 11:46 pm

I've been customer with WF before there were free trades a few years ago. They did have lower commissions for folks with large combined balances, so it made sense to use them at that time. In the meantime other vendors have jumped on the free-trade bandwagon, so there are more choices. For example, TDAmeritrade gives cash bonuses and has free trades on Vanguard ETFs.

Oh, and to answer your title question, yes, others have seen this. See this a little further down the page: viewtopic.php?f=1&t=107455 :)
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby esquire415 » Mon Mar 04, 2013 3:18 pm

A friend told me that that Wells Fargo is doing away with free trades so I Googled it and found this post at Bogleheads. Lots of stuff are not free anymore like parking on Sundays in San Francisco, and prices have all gone up like the only Chinese restaurant near AT&T Park where they just raised prices of almost all their dishes to .50c-$1 Also my local internet provider has raised their rate by $5/month. Fortunately, existing accounts are grandfathered in to Wells' 100 free trades a year. I thought this is a bit drastic considering it is one of their biggest draw as no other brokerage offer free trades. I used to trade with Zecco which started out at 40 trades per month for a balance of $1,000. Then that was lowered to 10 free trades per month to balances of $2,500. Then it was 10 free/mo for balances of $25,000. That's when I transferred to Wells Fargo. Then Zecco took out free trades altogether and just charge everyone $4.95/trade. They never grandfathered in their customers with the original terms. I can't believe they still call themselves ZECCO (ZEro COmmission COst)!

Anyway, here’s the harsh reality. If you’re going to offer free trades, you’re gonna have to make the money up elsewhere. Historically, a huge source of revenue for discount brokers has been earning interest on idle cash balances. With interest rates being so low, this source of income has dried up. Trading volume is down, so there are less people exceeding the trade limit and paying up for additional trades.

I think Wells Fargo should have retained the free trades, maybe not 100 but 50 or maybe even 20-25 trades a year as not many trade more than that anyway. It will still entice more people to open a $25k account with them. Now with the no free trades, there really isn't any incentive of opening a PMA account for new customers. Well then the only other alternative will be Merrill Edge with their 30 free trades / month but you have to have $25k total in your deposit account and/or, IRA, and/or investment account on either BofA or Merrill Edge. Also it's a very shady company being the former Merrill Lynch.

I'm not sure though if Wells actually meant existing customers and not existing accounts for those grandfathered in. That if I for example after March 31, transferred a 401k account I have from a previous employer or IRA account I have from another broker to Wells Fargo which will be tied in with my other accounts through the PMA package, will that new account not have the 100 free trades?
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby BrandonBogle » Mon Mar 04, 2013 8:23 pm

esquire415 wrote:I'm not sure though if Wells actually meant existing customers and not existing accounts for those grandfathered in. That if I for example after March 31, transferred a 401k account I have from a previous employer or IRA account I have from another broker to Wells Fargo which will be tied in with my other accounts through the PMA package, will that new account not have the 100 free trades?

drh wrote:Beginning April 1, 2013, when a WellsTrade account is linked to a PMA Package, benefits will not include 100
commission-free online trades.


Sounds to me that any WellsTrade account, existing or new, not currently part of the PMA package as of end of day 3/31 will NOT get free trades. This likely also means that if any existing account is pulled off the package and later gets re-added, it loses it's free trades. Other than if you suddenly decide to open a new account because of a trust or something, I don't see how this would affect existing customers.

I also would have liked to see "customers" get grandfathered rather than accounts should I ever open up anything such as a trust account. Oh well. I have all Vanguard MF plus a few individual stocks pre-Boglehead. If I ever need another account, it'll just get opened at Vanguard.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby esquire415 » Tue Mar 12, 2013 1:13 pm

I've spoken to an agent when I tried to open a new IRA account because I wanted to rollover a 401k account I have from a previous employer and an IRA account I have at Scottrade. He said that I can create the account now with Wells but I don't have to do the transfer before April 1 to get the free trades. As long as you created the account before April 1, it qualifies for the 100 free trades. I had to create two new accounts before the transfer. I thought of keeping my 401k with my previous employer which is held by John Hancock at least until the end of the year before i make the transfer. They will not transfer in kind. They want me to sell all the funds (that I have done already ---except for my Fidelity gold fund which lost over 30% already! --- before the DOW reached 1400 which I regret doing) in order to move to Wells. Scottrade on the other hand will transfer in kind for free and I can keep my account open so I can use their site for research and for the real-time stock streamer.

A friend of mine has a similar predicament but he has both a regular IRA and a ROTH IRA with Ameritrade. The Roth IRA is an Apex account so it's free to transfer out. The Regular IRA is not and it costs $75 to do an ACAT out. Partial ACAT costs $25 and he must leave $200 in the account so I told him that he should just close the account as there are no closing fees to do so and then he still have 60 days to put the money to WellsTrade before he gets taxed for it. He can leave Ameritrade and still keep his Apex account open with them to use all their features. He also have sold most of the mutual funds he held (except for a couple which now have transaction fees) not for this reason but he also thought the market was going to correct once the DOW reaches 1400.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Tue Mar 12, 2013 3:38 pm

esquire415 wrote:I've spoken to an agent when I tried to open a new IRA account because I wanted to rollover a 401k account I have from a previous employer and an IRA account I have at Scottrade. He said that I can create the account now with Wells but I don't have to do the transfer before April 1 to get the free trades.

Plus you have to have a PMA and link it to the accounts, at least as I read it. The problem there is that the PMA has a $30 per month fee unless your total assets exceed the minimum amount (usually 50k total or 25k in deposit accounts).


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby esquire415 » Fri May 03, 2013 3:33 pm

Default User BR wrote:
esquire415 wrote:I've spoken to an agent when I tried to open a new IRA account because I wanted to rollover a 401k account I have from a previous employer and an IRA account I have at Scottrade. He said that I can create the account now with Wells but I don't have to do the transfer before April 1 to get the free trades.

Plus you have to have a PMA and link it to the accounts, at least as I read it. The problem there is that the PMA has a $30 per month fee unless your total assets exceed the minimum amount (usually 50k total or 25k in deposit accounts).

Brian


True but I am holding my Roth IRA, Rollover IRA, and Regular brokerage account with Wells Fargo. You only need a total of $25k balance of your assets combined inlcuding loan balances, not just $25k in a deposit account.

Wells Fargo accounts used for balance qualification include checking, savings, time accounts (CDs), retirement (IRAs), brokerage, trust (excluding irrevocable trusts), loans, outstanding credit cards and line of credit balances, and 10% of outstanding mortgage balance

You can simply move over $25,000 in existing stocks and mutual funds to qualify for the free trades. You can even have, for example, $12,500 in taxable brokerage and $12,500 in an IRA and get 100 free trades for both accounts. There are no annual fees if you maintain the $25,000 all in one brokerage account.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Fri May 03, 2013 7:13 pm

esquire415 wrote:
Default User BR wrote:Plus you have to have a PMA and link it to the accounts, at least as I read it. The problem there is that the PMA has a $30 per month fee unless your total assets exceed the minimum amount (usually 50k total or 25k in deposit accounts).

True but I am holding my Roth IRA, Rollover IRA, and Regular brokerage account with Wells Fargo. You only need a total of $25k balance of your assets combined inlcuding loan balances, not just $25k in a deposit account.

Over the past few years, that varied by state. Most needed 50k or 25k in deposits for new accounts to get the PMA fee waived. Quite possibly accounts started in the old days still only needed 25k total. I'm not sure. It's kind of moot now, as the deadline has passed and the thread title has become fact.


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Jfet » Fri May 03, 2013 8:00 pm

The past few years I heavily used the 100 free trades, trying my hand at market timing and tax loss harvesting.

I got the tax loss harvesting down pat. I just forgot the part about getting gains. :(

Now I use like 6 trades a year, mostly buying Vanguard ETFs
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Sat May 04, 2013 1:11 am

Jfet wrote:The past few years I heavily used the 100 free trades, trying my hand at market timing and tax loss harvesting.

I got the tax loss harvesting down pat. I just forgot the part about getting gains. :(

Now I use like 6 trades a year, mostly buying Vanguard ETFs

When I was with WellsTrade, I didn't come anywhere near using up my free trades. Those were more important early on when I was first putting together the portfolio and a couple rounds of TLH after the crash. Now there's a lot of inertia to things. I moved on to other custodians for cash bonuses. Even with having to pay some transaction fees, it still works out better.


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Ed 2 » Sat May 04, 2013 1:15 am

that is the reason that I would never open any brokerage with some "carrots". They changing terms whenever they would like. Better stay in plane vanilla Index Funds and forget about it)))
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Sat May 04, 2013 1:55 am

Ed 2 wrote:that is the reason that I would never open any brokerage with some "carrots". They changing terms whenever they would like. Better stay in plane vanilla Index Funds and forget about it)))

I don't follow. You can buy index funds at Wells Fargo.


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Ed 2 » Sat May 04, 2013 7:24 am

Default User BR wrote:
Ed 2 wrote:that is the reason that I would never open any brokerage with some "carrots". They changing terms whenever they would like. Better stay in plane vanilla Index Funds and forget about it)))

I don't follow. You can buy index funds at Wells Fargo.


Brian


I don't follow ether, ...why? I buy them directly,without third party! I use banks strictly for its original purposes, I do not give them any chance to make an extra :dollar from my pocket.. Vanguard is is not a bank ,it is a owned by clients, so our profits go directly back to me.What can be clearer than this?
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Sat May 04, 2013 12:29 pm

Ed 2 wrote:
Default User BR wrote:
Ed 2 wrote:that is the reason that I would never open any brokerage with some "carrots". They changing terms whenever they would like. Better stay in plane vanilla Index Funds and forget about it)))

I don't follow. You can buy index funds at Wells Fargo.

I don't follow ether, ...why? I buy them directly,without third party! I use banks strictly for its original purposes, I do not give them any chance to make an extra :dollar from my pocket.. Vanguard is is not a bank ,it is a owned by clients, so our profits go directly back to me.What can be clearer than this?

Because that didn't follow from your original statement, which had something to do with staying in index funds. What you invest in is a different matter than the custodian you choose.

What works best for each person is going to be different, of course. However, there was certainly nothing much wrong with the old WF PMA deal, and a lot right with it. These days I'm all in ETFs, and use a variety of custodians. I collected $2150 in bonuses doing that. Is that the best way? For me it is, probably not for you. Choices are good!


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby docneil88 » Sun May 05, 2013 6:48 pm

Wells Fargo wrote:Beginning April 1, 2013, when a WellsTrade account is linked to a PMA Package, benefits will not include 100
commission-free online trades. The new benefits will be unlimited trades at a discounted commission rate of $6.95 per
transaction for online and automated telephone trades for Stocks (excluding Penny Stocks) and Exchange-Traded Funds
(ETFs) *** - normally $8.95. Also, waiver of WellsTrade IRA and standard brokerage annual account fees regardless of
PMA Package balances.

Also, no-load transaction fee mutual funds will cost $35 per trade, for WellsTrade accounts linked to a PMA package after April 1, 2013. (Same price for standard WellsTrade accounts not linked to a PMA.)
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Sun May 05, 2013 7:58 pm

docneil88 wrote:
Wells Fargo wrote:Beginning April 1, 2013, when a WellsTrade account is linked to a PMA Package, benefits will not include 100 commission-free online trades. The new benefits will be unlimited trades at a discounted commission rate of $6.95 per transaction for online and automated telephone trades for Stocks (excluding Penny Stocks) and Exchange-Traded Funds (ETFs) *** - normally $8.95. Also, waiver of WellsTrade IRA and standard brokerage annual account fees regardless of PMA Package balances.

Also, no-load transaction fee mutual funds will cost $35 per trade, for WellsTrade accounts linked to a PMA package after April 1, 2013. (Same price for standard WellsTrade accounts not linked to a PMA.)

For someone not grandfathered into the PMA, I think there are better options going forward. TD Ameritrade would be where I'd look. They have a nice commission-free ETF list and are offering transfer bonuses. I believe the MF purchase fee is comparable, but I don't recall.


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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Ricola » Sun May 05, 2013 10:29 pm

Last I remember Wells was charging $50 per account to transfer PMA accounts out of Wells to another brokerage like Vanguard. Wonder if Vanguard would pickup that fee to transfer over to them, my old Scottrade brokerage told me they would pay those account closing fees if I ever decided to come back.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby drh » Sun May 05, 2013 10:44 pm

The outgoing fee for WellsTrade was bumped up to $95 several years ago. Thankfully I am grandfathered into the PMA free trades so I am not looking to leave...
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby BrandonBogle » Sun May 05, 2013 10:53 pm

Ricola wrote:Last I remember Wells was charging $50 per account to transfer PMA accounts out of Wells to another brokerage like Vanguard. Wonder if Vanguard would pickup that fee to transfer over to them, my old Scottrade brokerage told me they would pay those account closing fees if I ever decided to come back.


I believe Vanguard does not reimburse any close out fees from the prior firm as a matter of policy. They like would word it in that they'd typically save you in lower ERs and lack of go-forward fees.

But no reason why you could go to TD or someone else and get them to reimburse the close out fee or offer a compensating bonus.
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Re: Wells Fargo - no more 100 free trades (for new accounts)

Postby Default User BR » Mon May 06, 2013 2:13 am

BrandonBogle wrote:I believe Vanguard does not reimburse any close out fees from the prior firm as a matter of policy. They like would word it in that they'd typically save you in lower ERs and lack of go-forward fees.

That's my understanding as well. Vanguard won't pay anything to incoming customers nor charge for outgoing.

BrandonBogle wrote:But no reason why you could go to TD or someone else and get them to reimburse the close out fee or offer a compensating bonus.

There are a number of brokerages offering bonuses these days. If you have substantial assets then you'd do pretty well.


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