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jasonp99
Joined: 11 Aug 2009
Posts: 122
Location: TX
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 Posted: Wed Dec 02, 2009 2:37 am Post subject: How come everybody doesn't use WellsTrade? |
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I've seen many posts with people referencing Vanguard or other accounts. Why is everybody not at Wells Fargo using a PMA-linked WellsTrade account (25K minimum)? I found out about this 2 years ago and it's great, 100 free trades PER account per year (i.e. 100 for brokerage, 100 for r-IRA, 100 for IRA, 100 for my wife's r-IRA and IRA). I don't make all that many trades so I'm way under the limit (especially in the *IRA accounts), but if I needed to do a major rebalancing I could do that.
One downside is that Wells Fargo's website is not stellar (I still have an account at Fidelity and their website is better). I suppose if one is investing mainly in no-fee MF's then there are no commissions. But if you wanted to buy ETF's then there possibly would be a fee (are Vanguard ETF's free to buy using a Vanguard account?)
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FrugalInvestor
Joined: 07 Nov 2008
Posts: 1097
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| Posted: Wed Dec 02, 2009 2:49 am Post subject: |
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You answered your own question for my particular situation. I use only Vanguard mutual funds (other than bank CD's and HSA accounts). I have little need to "trade" and upon occasion when I do (TLH) there are no associated costs.
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LesterFreamon
Joined: 16 Jul 2009
Posts: 236
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| Posted: Wed Dec 02, 2009 3:08 am Post subject: |
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| I think it's because many of the members on this forum are older and have had a relationship with Vanguard for quite some time. They simply do not like change and are comfortable where they are. But I agree with you, it makes no sense to me why anyone would not use WellsTrade via Wells Fargo for their investing needs if they can qualify for the PMA account. |
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MrMatt2532
Joined: 15 Mar 2009
Posts: 235
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| Posted: Wed Dec 02, 2009 3:20 am Post subject: |
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While I have an account with wells fargo and enjoy it, I would still consider them a company that tries really hard to get every last cent it can from its customers. Little things like charges for outbound ACH, low interest on accounts, minimum balances or else fees on savings accounts, and just the fact that there is no gaurantee for this 100 free trades to last forever.
On the otherhand, vanguard is built around keeping costs down and there is no reason whatsoever that that shouldn't continue. |
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Dynastar
Joined: 14 Dec 2007
Posts: 103
Location: Montana
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| Posted: Wed Dec 02, 2009 3:29 am Post subject: |
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If it ain't broke don't fix it.
(/me is not old) |
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Prokofiev
Joined: 19 Feb 2007
Posts: 666
Location: New Orleans
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| Posted: Wed Dec 02, 2009 3:38 am Post subject: |
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| LesterFreamon wrote: | | I think it's because many of the members on this forum are older and have had a relationship with Vanguard for quite some time. They simply do not like change and are comfortable where they are. But I agree with you, it makes no sense to me why anyone would not use WellsTrade via Wells Fargo for their investing needs if they can qualify for the PMA account. |
Many of the "older" members of the forum are Vanguard Flagship members, which for most of us is the better deal.
12 free stock/ETF trades/yr (then $8.), commission-free bond trading, free Turbo-Tax, free investment planning and a personal rep. Not sure about Wells, but many other brokerages don't allow free VG MFs or access to Admiral class MFs and the best value for bonds has been VG Adm class MFs. Unless you make a lot of ETF trades each year, VG Flagship ends up as the better value. I am now as likely to move TIPS on the secondary market as I am ETFs.
This year my total cost will be $32, maybe $40 (17 trades) which more than pays for itself with TurboTax and free bond trading. Plus even if you went crazy and did 30-50+ trades/yr, the net cost is tiny compared to other costs for any decent size portfolio. My total ER expenses for MFs and ETFs will be over $6000 this year. Trying to save $50 by moving all my assets from VG makes no sense. I gave up moving to discount houses to save a few bucks long ago. They have a habit of changing the deal or being acquired by someone else.
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Everything should be made as simple as possible, but not simpler - Einstein |
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LesterFreamon
Joined: 16 Jul 2009
Posts: 236
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| Posted: Wed Dec 02, 2009 3:43 am Post subject: |
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| Prokofiev wrote: | | LesterFreamon wrote: | | I think it's because many of the members on this forum are older and have had a relationship with Vanguard for quite some time. They simply do not like change and are comfortable where they are. But I agree with you, it makes no sense to me why anyone would not use WellsTrade via Wells Fargo for their investing needs if they can qualify for the PMA account. |
Many of the "older" members of the forum are Vanguard Flagship members, which for most of us is the better deal.
12 free stock/ETF trades/yr (then $8.), commission-free bond trading, free Turbo-Tax, free investment planning and a personal rep. Not sure about Wells, but many other brokerages don't allow free VG MFs or access to Admiral class MFs and the best value for bonds has been VG Adm class MFs. Unless you make a lot of ETF trades each year, this ends up as the better value. I am now as likely to move TIPS on the secondary market as I am ETFs.
This year my total cost will be $32, maybe $40 (17 trades) which more than pays for itself with TurboTax and free bond trading. Plus even if you went crazy and did 30-50+ trades/yr, the net cost is tiny compared to other costs for any decent size portfolio. My total ER expenses for MFs and ETFs will be over $6000 this year. Trying to save $50 by moving all my assets from VG makes no sense. I gave up moving to discount houses to save a few bucks long ago. They have a habit of changing the deal or being acquired by someone else. |
You can use Vanguard mutual funds, ETFs, and money market funds at WellsTrade, no problem. Why use mutual funds when you can use ETFs with a lower expense ratio and no commissions?
If you use all ETFs instead of mutual funds, what would your expense ratio be? WellsTrade isn't a flash in the pan brokerage that is likely to be acquired anytime soon. I think the 100 free trade deal is here to stay. The deal used to only be good if you had $250,000 with them, but they lowered it to $25,000. I know a lot of people do all of their banking with Wells Fargo and I think that is what separates this deal from others. This deal with WellsTrade is sustainable in the long-run because of the business model. I haven't seen anything like this from other brokerages. When you go over 100 free trades, I believe the cost is $2.95 a trade, so it's not like they are screwing you even when you have to pay. |
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CaveatEmptor
Joined: 01 Jan 2009
Posts: 298
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| Posted: Wed Dec 02, 2009 3:43 am Post subject: |
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I already moved out of 2 brokerage accounts that had a lot of free loss-leader bells and whistles, and I am not eager to have a third such experience. The reason I moved my accounts from these to Vanguard is when I realized that the expense ratios of the money-market funds we could choose from (for the "sweep") were around 1.4%. A friend who worked at one such brokerage told me once that his firm made no profits from the commissions on trades, they were "at cost" or even occasionally loss-leaders for asset-gathering purposes. He said where they made the real money was on the funds sitting in the high-expense sweep money-market fund, or the even more lucrative bank account type of sweep alternative that his firm offered (the FDIC insured one that paid a tiny interest when short-term interest rates were a generous 4%).
Last edited by CaveatEmptor on Wed Dec 02, 2009 3:47 am; edited 1 time in total |
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LesterFreamon
Joined: 16 Jul 2009
Posts: 236
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| Posted: Wed Dec 02, 2009 3:44 am Post subject: |
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| MrMatt2532 wrote: | While I have an account with wells fargo and enjoy it, I would still consider them a company that tries really hard to get every last cent it can from its customers. Little things like charges for outbound ACH, low interest on accounts, minimum balances or else fees on savings accounts, and just the fact that there is no gaurantee for this 100 free trades to last forever.
On the otherhand, vanguard is built around keeping costs down and there is no reason whatsoever that that shouldn't continue. |
I make many outbound ACH transfers each month and have NEVER been charged a fee by WF for this. I don't know any large bank that pays high rates of interest on their checking/savings account, but nothing prevents you from using a Vanguard MM or ING Direct savings account for this money. Why do you need a savings account? Sweep that money into your brokerage account and use a Vanguard MM fund. |
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LesterFreamon
Joined: 16 Jul 2009
Posts: 236
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| Posted: Wed Dec 02, 2009 3:46 am Post subject: |
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| CaveatEmptor wrote: | | I already moved out of 2 brokerage accounts that had a lot of free loss-leader bells and whistles, and I am not eager to have a third such experience. The reason I moved my accounts from these to Vanguard is when I realized that the expense ratios of the money-market funds we could choose from (for the "sweep") were around 1.4%. A friend who worked at one such brokerage told me once that his firm made no profits from the commissions on trades, they were "at cost" or even occasionally loss-leaders for asset-gathering purposes. He said where they make the real money was on the funds sitting in the high-expense sweep money-market fund, or the even more lucrative bank account type of sweep alternative that his firm offered (the FDIC insured one that paid a tiny interest when short-term interest rates were a generous 4%). |
Right, but those two companies were brokerages and could only stay in business if their brokerage unit was profitable. With the PMA account, you have to have a checking account, and many other customers will get a credit card, mortgage, auto loan, etc. with Wells Fargo. The beauty of the deal on the free trades is that WF can offer that deal because they are able to cross-sell so many other services. They can afford to lose money on the brokerage side because they will make it up with your cash balance that you don't sweep into a higher yielding account or with large sums of money sitting in a checking account. To my knowledge, there has never been an offer from another company that is identical to the one from WF. |
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CaveatEmptor
Joined: 01 Jan 2009
Posts: 298
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| Posted: Wed Dec 02, 2009 4:01 am Post subject: |
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| LesterFreamon wrote: |
They [Wells Fargo] can afford to lose money on the brokerage side because they will make it up with your cash balance that you don't sweep into a higher yielding account or with large sums of money sitting in a checking account.
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That's the whole point of why I moved out of the other brokerages -- they did exactly that (they had nice banking services, but I wanted my idle cash to collect the 4% available at the time from my Vanguard sweep money-market fund, the Prime MM). We are today in an exceptional economic situation where short-term rates are close to zero, but in the past the returns from my Vanguard MM Prime have easily beaten the interest rates I got from my (otherwise excellent) bank. |
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Prokofiev
Joined: 19 Feb 2007
Posts: 666
Location: New Orleans
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| Posted: Wed Dec 02, 2009 4:03 am Post subject: |
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" Why use mutual funds when you can use ETFs with a lower expense ratio and no commissions? If you use all ETFs instead of mutual funds, what would your expense ratio be? "
My ER would be the same or higher. Each VG MF I have is Admiral class with exactly the same ER as the corresponding VG ETF. Check out the problems with bond ETF premia / traking error compared to the corresponding MF. So far the ETFs have lagged the funds by a significant amount. My total cost for ERs is just about as low as it could possibly be. Where there is an ETF cost advantage or asset class not available, I do use ETFs. Some VG funds do not have Admiral class available and the ETF IS a better deal. No arguement there.
I realize that not everyone has enough to qualify as Flagship or have the minimum $100k per fund ($50k for some) necessary to make this work. And some people just like to trade a lot and find 12 trades too little. It wont work for a day-trader.
But please don't say we are uniformed, old or just lazy for not changing to another broker. I have looked into my options and remain totally convinced that VG Flagship is both the most convenient as well as cheapest option for me.
Good Luck, -P
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Everything should be made as simple as possible, but not simpler - Einstein |
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CaveatEmptor
Joined: 01 Jan 2009
Posts: 298
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| Posted: Wed Dec 02, 2009 4:18 am Post subject: |
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| LesterFreamon wrote: |
I don't know any large bank that pays high rates of interest on their checking/savings account, but nothing prevents you from using a Vanguard MM or ING Direct savings account for this money. Why do you need a savings account? Sweep that money into your brokerage account and use a Vanguard MM fund. |
Can you give me the name of a brokerage that allows what you just described? I don't think such a brokerage exists, brokerages do not allow investing in money-market funds that come from outside their limited menu of 3 or 4 (typically high-cost) money-market funds. I've looked hard for one that would allow access to Vanguard's Prime MM fund, and found none other than Vanguard itself (the others will let you choose any mutual fund you want to invest in, as long as it's not a low-cost money-market fund -- because allowing that would kill their business model of making their money from the customers' idle cash). |
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LesterFreamon
Joined: 16 Jul 2009
Posts: 236
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| Posted: Wed Dec 02, 2009 4:36 am Post subject: |
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| CaveatEmptor wrote: | | LesterFreamon wrote: |
I don't know any large bank that pays high rates of interest on their checking/savings account, but nothing prevents you from using a Vanguard MM or ING Direct savings account for this money. Why do you need a savings account? Sweep that money into your brokerage account and use a Vanguard MM fund. |
Can you give me the name of a brokerage that allows what you just described? I don't think such a brokerage exists, brokerages do not allow investing in money-market funds that come from outside their limited menu of 3 or 4 (typically high-cost) money-market funds. I've looked hard for one that would allow access to Vanguard's Prime MM fund, and found none other than Vanguard itself (the others will let you choose any mutual fund you want to invest in, as long as it's not a low-cost money-market fund -- because allowing that would kill their business model of making their money from the customers' idle cash). |
Wells Fargo! You can link your Wells Fargo checking account to all of your Wells Fargo brokerage account. You just sold some shares of XYZ and need the funds in 30 days for a car purchase? You can take the proceeds from XYZ and buy Vanguard Prime Money Market Fund inside your WT brokerage account. Or, if you'd rather move it to an ING account, move the money from your WF brokerage account to your checking account (usually same day movement, takes about 3 clicks of your mouse), and then move the money to your ING account.
I have done this with WF a million times. Most Bogleheads are concerned if their $1,000 balance is earning .5% instead of 1.5%, so to them chasing the extra $10 is worthwhile. I'm guessing most WT customers don't know what the default cash balance is and they don't care. So imagine getting tens of thousands of customers to leave $1,000, on average, in the default cash account. That money adds up quickly for WF. |
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Fbone
Joined: 20 Jun 2009
Posts: 567
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| Posted: Wed Dec 02, 2009 4:48 am Post subject: |
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| Wells Fargo isnt located in every state so it would be used strictly as an online brokerage. Without the banking services the idea loses some of it's appeal. |
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CaveatEmptor
Joined: 01 Jan 2009
Posts: 298
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| Posted: Wed Dec 02, 2009 5:50 am Post subject: |
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| LesterFreamon wrote: |
You just sold some shares of XYZ and need the funds in 30 days for a car purchase? You can take the proceeds from XYZ and buy Vanguard Prime Money Market Fund inside your WT brokerage account.
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Interesting, this would make WT the only brokerage that allows its customers to invest in a low-cost MM that's outside of their default list. |
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nisiprius
Joined: 26 Jul 2007
Posts: 9706
Location: North America; Western Hemisphere; the Earth; the Solar System; the Universe; the Mind of God
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| Posted: Wed Dec 02, 2009 8:04 am Post subject: |
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How is WellsTrade on TIPS?
Can WellsTrade can match Fidelity--no fees for secondary market purchase or sales, and of course no fees for auction purchases--I'd seriously consider a move. Last time I asked I was told "no," though.
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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. |
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paulob
Joined: 20 Feb 2007
Posts: 1223
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| Posted: Wed Dec 02, 2009 8:38 am Post subject: |
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I think its Vanguard's reputation that results in client retention. Who do you trust that in a few years will have the same business philosophy and will emphasize low-cost, but not necessarily the lowest cost? My answer would be Vanguard.
My own particular situation is different, but my answer above is what I believe applies to the majority, and not my own wants and needs.
Do you remember Freetrade or Izone? They offered free or very low cost trades. I became a client. They raised commissions. The free lunch was over.
I opened an account with Scottrade in 2003 because they offered Vanguard and other fund families with no transaction fees. Right around Christmas of the next year or so, they eliminated the free trades for Vanguard, Dodge and Cox, etc.
So, in 2007 I opened an account with Wells Fargo, for yes, free trades. While I believe in Wells Trade, I can see where others would be skeptics.
P.S I also am a long time Schwab customer. Most people are familiar with how their fees have been on a rollercoaster ride over the the long term.
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Paul
Last edited by paulob on Wed Dec 02, 2009 9:54 am; edited 1 time in total |
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Boglenaut
Joined: 23 Mar 2009
Posts: 1081
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| Posted: Wed Dec 02, 2009 8:51 am Post subject: Re: How come everybody doesn't use WellsTrade? |
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| jasonp99 wrote: | I've seen many posts with people referencing Vanguard or other accounts. Why is everybody not at Wells Fargo using a PMA-linked WellsTrade account (25K minimum)?
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I wanted to buy some ETF's and had about $35 to invest Aug 2008. If I had gone to Wells Trade I'd been paying a large maintenance fee when it dropped to about 20k. To ensure you meet that minimum, you really need a lot more invested.
I very rarely trade, so took advantage of a different promotion somewhere else. |
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mfen
Joined: 21 Jun 2009
Posts: 589
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| Posted: Wed Dec 02, 2009 8:55 am Post subject: |
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I just consolidated to Vanguard. Ethics, consistency in pricing over the years, a business model that is not profit driven (mutual company) were major factors. I had been with the discounters for years and got tired of their shifting fee schedules. Wells Fargo, like most banks, is constantly reconfiguring fees to catch a wave. It is tiresome and irritating to keep abreast of the changes and to potentially have to transfer accounts (with those nasty transfer fees) to chase the current lowest cost provider. Not too long ago Wells was the highest cost provider of banking services in my area. According to studies most brokerage customers trade less than 12 times a year so for a Vanguard Flagship customer it works out to exactly the same cost - $0.
As an aside, I would like to see Vanguard have an open period where they would allow customers to convert or buy their etf's for free.
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 8:57 am Post subject: |
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I have been a Wells Fargo client for about 15 years ... even when trades were not free, but all banking there has always been free with direct deposit or a minimum account value.
I have been a Vanguard client for more than 25 years. You can guess that all my funds are admiral.
Let's face it. Inertia is a big deal. If it ain't broke, don't fix it.
Folks are loathe to change banks. Many folks want a bank they can walk into. They don't want online-only banking. If their bank is not costing them money, they see no reason to switch.
Many folks are happy with a single low-cost mutual fund company for all their investing and IRAs. Strangely, this holds even if there are no offices near them. That is, they don't like online-only banking, but they like online-only mutual fund investing.
So I can easily see why long-time Vanguard customers would not switch. They will see no real benefit to Wells Fargo.
Also long-time customers probably didn't notice when Vanguard instituted fees of $10 here and $20 there for folks with low balances. They also don't notice the 0.25% to 0.75% fees on some funds.
WF does not go out of its way to tell folks that
(a) many Vanguard admiral share funds are available
(b) one can use Vanguard funds without cost,
(c) free checking is really free everything checking.
Folks just starting out with less than $25K will not see a benefit to Wells Fargo either, so they might as well not go far and end up at Vanguard.
But if you are neither a WF nor a Vanguard client and have the $25K+ minimum, then by all means WF is something to consider.
Last edited by livesoft on Wed Dec 02, 2009 9:33 am; edited 1 time in total |
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JeremiahS
Joined: 29 Apr 2008
Posts: 147
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| Posted: Wed Dec 02, 2009 9:21 am Post subject: Re: How come everybody doesn't use WellsTrade? |
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| jasonp99 wrote: | I've seen many posts with people referencing Vanguard or other accounts. Why is everybody not at Wells Fargo using a PMA-linked WellsTrade account (25K minimum)? I found out about this 2 years ago and it's great, 100 free trades PER account per year (i.e. 100 for brokerage, 100 for r-IRA, 100 for IRA, 100 for my wife's r-IRA and IRA). I don't make all that many trades so I'm way under the limit (especially in the *IRA accounts), but if I needed to do a major rebalancing I could do that.
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Not all of us have 25K in assets to put in a brokerage account. It would take me several mor years to reach this amount.
In the mean time my current broker gives me free everything for my banking, has branches and ATMs where I need them, charges only $7 per trade, provides all of my banking and brokerage information to me monthly on a single statement, and has the highest level of customer service I've encountered so far. |
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Wagnerjb
Joined: 19 Feb 2007
Posts: 3866
Location: Houston, Texas
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| Posted: Wed Dec 02, 2009 9:52 am Post subject: |
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| Prokofiev wrote: |
Many of the "older" members of the forum are Vanguard Flagship members, which for most of us is the better deal.
12 free stock/ETF trades/yr (then $8.), commission-free bond trading, free Turbo-Tax, free investment planning and a personal rep. Not sure about Wells, but many other brokerages don't allow free VG MFs or access to Admiral class MFs and the best value for bonds has been VG Adm class MFs. Unless you make a lot of ETF trades each year, VG Flagship ends up as the better value. |
Ditto for me.
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Andy |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 11:01 am Post subject: |
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I think a lot of people have been hesitant because they weren't sure how long the 100 free trades were going to last when others such as Scottrade, Firstrade, etc. started adding transaction fees to some funds.
Zecco also came out of the gates with a lot of flash offering free trades but couldn't sustain that model and has since made modifications --- i believe you now get 10 free trades a month if you trade 25 times a month or have $25k.
As we witnessed last year -- you'd probably want quite a bit higher than $25k as many people even with $30k - $35k saw their assets drop below that $25k threshold.
Everyone just has to evalutate the pros and cons and Wellstrade may be great for many but may not be enough to warrant a move depending on various factors. Now I don't know if Wellstrade has recently made improvements but they used to require a manual setup (phone or fax) just to setup or make changes to an auto-periodic investment. You couldn't do it with a few clicks of the mouse.
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SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health. |
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dmcmahon
Joined: 21 Mar 2008
Posts: 895
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| Posted: Wed Dec 02, 2009 11:27 am Post subject: |
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| I get good service with Schwab and am satisfied with their financial strength. I don't trade often enough to worry about the $9/trade commissions. As for linked accounts, you can do that with Schwab Bank, and then link from there to wherever you need to. |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 11:52 am Post subject: |
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| CaveatEmptor wrote: | | LesterFreamon wrote: |
You just sold some shares of XYZ and need the funds in 30 days for a car purchase? You can take the proceeds from XYZ and buy Vanguard Prime Money Market Fund inside your WT brokerage account.
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Interesting, this would make WT the only brokerage that allows its customers to invest in a low-cost MM that's outside of their default list. |
I don't understand? At most brokerage firm you can certainly buy from a wide selection of money-market funds from various fund companies.
At Scottrade, TDAmeritrade, Etrade, Firstrade, etc --- why can't you buy a Money Market Fund from a fund company such as Vanguard's? I just checked Scottrade and it appears that you can certainly buy Vanguard's Money Market Funds.
What you can't do at any of the brokerages including Wellstrade is that you don't have a wide selection of MM Funds to choose from as your default SWEEP CASH account. Even at VBS you are only given a few selection of Vanguard MM funds. But that doesn't stop you from buying other MM Funds just like any other mutual funds.
What was described above with respect to Wellstrade can be done at just about any brokerage firm. You sell some XYZ which then goes into a CASH Sweep Account (MM Fund) and then buy Vanguard's Prime MM Fund. Again - you can do that at just about any brokerage firm. You're just buying the Vanguard Prime MM Fund just like any other Mutual Fund --- and what you're not doing and cannot do is designate the Vanguard Prime MM Fund to be your default brokerage cash sweep account. VBS customers can but not at other brokerages which have their own small selection of cash funds that you must use for the initial cash repository.
So in a nutshell -- being able to buy from a wide selection of Money Market Funds such as Vanguard Prime MM to store your cash is available at just about any brokerage firm where the fund family is available -- no issue there. But that's a different question or situation from being able to choose the Vanguard Prime MM Fund to be your default brokerage cash sweep account, which you cannot do at these brokerage firms outside of VBS.
_________________
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.
Last edited by Kenster1 on Wed Dec 02, 2009 11:59 am; edited 2 times in total |
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MCSquared
Joined: 02 Aug 2009
Posts: 171
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| Posted: Wed Dec 02, 2009 11:56 am Post subject: |
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| CaveatEmptor wrote: | | LesterFreamon wrote: |
You just sold some shares of XYZ and need the funds in 30 days for a car purchase? You can take the proceeds from XYZ and buy Vanguard Prime Money Market Fund inside your WT brokerage account.
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Interesting, this would make WT the only brokerage that allows its customers to invest in a low-cost MM that's outside of their default list. |
They are not the only one. I can buy Vanguard Prime or anything else at my B of A brokerage account. I also do not pay any fees or commissions for any trades; not sure of specifics of the "program" but I also bank at B of A and have deposit relationships both personal and for my business. I suspect that is a factor. |
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Alex Frakt
Site Admin
Joined: 23 Feb 2007
Posts: 5008
Location: Chicago
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| Posted: Wed Dec 02, 2009 11:59 am Post subject: |
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| While I have a non-brokerage account at Vanguard that accounts for about half of my investments, I'm in the process of moving my brokerage account from E-trade to Wellstrade. Since I have multiple accounts (Roth and traditional IRA for both my wife and I and a joint taxable) and am transferring funds from another brokerage, this has taken several hours so far and it's not done yet. This will be my 6th brokerage in 18 years of investing since I keep chasing better deals. I can certainly see why someone would decide it's not worth the bother. |
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dbc47
Joined: 01 Mar 2007
Posts: 170
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| Posted: Wed Dec 02, 2009 12:00 pm Post subject: |
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| Another question might be: Why doesn't everyone use Scottrade? $7 trades and you don't have to tie up $25K at a bank that pays next to nothing in rates. |
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 12:02 pm Post subject: |
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| dbc47 wrote: | | Another question might be: Why doesn't everyone use Scottrade? $7 trades and you don't have to tie up $25K at a bank that pays next to nothing in rates. |
That's another myth. You don't have to tie up any money at a bank that pays next to nothing in rates. Example: Buy $30,000 worth of VEU in your WF brokerage account. Have $0 in all other WF accounts. |
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 12:05 pm Post subject: |
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| Kenster1 wrote: | | So in a nutshell -- being able to buy from a wide selection of Money Market Funds such as Vanguard Prime MM to store your cash is available at just about any brokerage firm where the fund family is available -- no issue there. |
Actually, there is an issue.
How much does it cost you to buy Vanguard Prime MM at Wells Fargo? Answer: $0.
And what is the cost at another brokerage? |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 12:19 pm Post subject: |
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| livesoft wrote: | | Kenster1 wrote: | | So in a nutshell -- being able to buy from a wide selection of Money Market Funds such as Vanguard Prime MM to store your cash is available at just about any brokerage firm where the fund family is available -- no issue there. |
Actually, there is an issue.
How much does it cost you to buy Vanguard Prime MM at Wells Fargo? Answer: $0.
And what is the cost at another brokerage? |
Vanguard Prime MM was just an example -- you can choose other NTF funds as well.
The other benefit of Wellstrade too is that you can take advantage of their banking & brokerage services in one spot. How are their banking services and products? I'm not familiar with them because they don't really have a presence here in Illinois. I'd certainly welcome their banking presence here to fire up additional competition from a large national bank against Citi, Chase and BofA here.
There are barely a handful of Wachovia branches in IL -- and with Wells Fargo taking them over I wonder if they will use that foot in the door to grow their presence in IL. I believe WF has a strong presence in other Midwest states and so naturally extending coverage into IL could make sense.
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SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.
Last edited by Kenster1 on Wed Dec 02, 2009 12:29 pm; edited 2 times in total |
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 12:20 pm Post subject: |
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| WF banking is superb. I have a USAA bank account, but I never use it since WF is better for me in my opinion. There are about 4 WF offices within 3 miles of my house, too. |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 12:24 pm Post subject: |
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| dbc47 wrote: | | Another question might be: Why doesn't everyone use Scottrade? $7 trades and you don't have to tie up $25K at a bank that pays next to nothing in rates. |
Scottrade has been quite popular but even more so a few years ago when they didn't charge transaction fees on mutual funds.
But years ago I balked at Scottrade because I didn't like their eChecking system to deposit money -- it was either that or mail in checks or dropping it off at one of their offices. I don't know if things have changed lately where they offer ACH transfers. And even if they do - they may only offer it on regular accounts and not retirement accounts.
Then there's also the issue of dividend reinvestments which they don't provide. They don't provide it for either ETFs/Stocks or Mutual Funds --- can't remember which one but has certainly been a put-off for a number of investors.
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SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health. |
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jasonp99
Joined: 11 Aug 2009
Posts: 122
Location: TX
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| Posted: Wed Dec 02, 2009 12:27 pm Post subject: |
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Lots of good posts here!
I'll re-iterate that I haven't paid any fees in my WF accounts (checking, brokerage) - outbound ACH transfers are definitely free. You can buy other brokerage MM funds (like FSLXX or VMRXX). When I was at Fidelity I would make many transfers in and out of FSLXX (all free) as it was basically my cash account. On WF I can still do that but each xfr counts against my 100 free trades. But FSLXX is not such a great deal (or CD's) now so I'm going to move my idle cash to a rewards checking account.
Now I can see why Vanguard is definitely a good deal for a lot of investors. I don't have enough to sink 100K in a single fund to get Admiral status, yet. But I could buy that on WF anyway. And if you're only doing a few trades a year then WF has no real advantage over Vanguard if you get the 12 free trades/yr.
But you can't buy CD's except for ones offered by WF banking (unlike Fidelity). And just checking my account the Bond trading/research links come up with empty screens.
If you have a mortgage with WF then 10% of the balance counts towards the $25 minimum for a PMA account. |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 12:32 pm Post subject: |
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Can you also clarify something at Wellstrade.....
If you have a joint regular account, his Roth IRA and her Roth IRA --- all 3 accounts will get their own 100 trades/year allowance (so 3 x 100 trades/yr)?
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SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health. |
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jh
Joined: 14 May 2007
Posts: 1319
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| Posted: Wed Dec 02, 2009 12:50 pm Post subject: |
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...
Last edited by jh on Sun Dec 06, 2009 9:12 pm; edited 1 time in total |
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 12:50 pm Post subject: |
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| Kenster1 wrote: | Can you also clarify something at Wellstrade.....
If you have a joint regular account, his Roth IRA and her Roth IRA --- all 3 accounts will get their own 100 trades/year allowance (so 3 x 100 trades/yr)? |
Yes, 3 x 100.
And on the MM Fund purchase, as said, it would not be a cash sweep account so you would need to meet the initial minimum purchase ($3000 for VMMXX) and also subsequent purchases (I think those might be $250). And it would use up one of your free trades. In other words, it is not something I would bother with myself. |
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jasonp99
Joined: 11 Aug 2009
Posts: 122
Location: TX
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| Posted: Wed Dec 02, 2009 12:51 pm Post subject: |
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| Kenster1 wrote: | Can you also clarify something at Wellstrade.....
If you have a joint regular account, his Roth IRA and her Roth IRA --- all 3 accounts will get their own 100 trades/year allowance (so 3 x 100 trades/yr)? |
Yes, that is true, as long as they are all linked to the same joint PMA checking account. However you cannot "see" all accounts when you login because IRA accounts are not joint. When my wife logs in she can see her IRA accounts, but not mine. Which is a pain because my wife has zero interest in managing investments. |
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TheEternalVortex
Joined: 27 Feb 2007
Posts: 1713
Location: San Jose, CA
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| Posted: Wed Dec 02, 2009 12:54 pm Post subject: |
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| I only use Vanguard MFs so I pay no fees. I suppose having free access to ETFs would be sort of nice, but on the other hand what if Wells Fargo removes the 100 free trades? Then I'd have to move everything around which would be a hassle. |
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mikep
Joined: 22 Apr 2009
Posts: 1674
Location: California
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| Posted: Wed Dec 02, 2009 12:54 pm Post subject: |
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It's a pain to move accounts - signature guarantee and all that when my bank doesn't offer one.
Also I am below 25K in some accounts.
Market fluctuation could take my account below 25K and then what?
Since Wells Fargo is a big bank, and I have had poor previous experience with them as a customer, I do not see them continuing this free for all forever, I mean they will have to make more money somewhere from credit card losses and such. Every time I went into a WF branch when I had just a basic checking account they try to upsell the low rate savings, HELOC, and on and on I had to listen to their pitch when I wanted to just deposit a check. I called customer service for a routine question and they charged my account a $2.00 service fee. I got fed up and switched to my credit union where the service is much better - free billpay, free withdrawals from ATM (they reimburse) where WF would nickel and dime me for those things.
I could see them raising the limit from 25K to 100K and so on ....
As it is today I get unlimited "free trades" from Vanguard buying directly into their mutual funds, except for VFSVX which costs 75 cents each time I buy in for $100 but best I can do there. Since I am accumulating in each in every month I prefer not to bother with ETF's. |
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paulob
Joined: 20 Feb 2007
Posts: 1223
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| Posted: Wed Dec 02, 2009 1:11 pm Post subject: |
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| dbc47 wrote: | | Another question might be: Why doesn't everyone use Scottrade? $7 trades and you don't have to tie up $25K at a bank that pays next to nothing in rates. |
The $25k is not required to be in deposit accounts.
While I think Scottrade is a good deal for many stock traders (e.g. they have better trading tools than WellsTrade), I did close my three accounts with Scottrade.
Their change in mutual fund commissions was a PR disaster. I learned of their intent to eliminate the popular NTF funds via the M* boards. It wasn't for several weeks that I rec'd official notice from Scottrade. They also made the announcement around XMAS when I haven't planned to devote time from family to an investing delimma. Scottrade is not even close to WellsTrade or Vanguard for my needs.
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Paul |
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Default User BR
Joined: 17 Dec 2007
Posts: 976
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| Posted: Wed Dec 02, 2009 1:14 pm Post subject: |
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| dbc47 wrote: | | Another question might be: Why doesn't everyone use Scottrade? $7 trades and you don't have to tie up $25K at a bank that pays next to nothing in rates. |
This is the second I've seen you make this false assertion. It was corrected the previous time. Are you not reading the follow-ups, or is there some other problem? You do not have to have $25k in the WF checking account. Mine has $5. You need that much in total assets across all accounts, including 10% of mortgage balance if that's held through WF.
Brian |
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mikep
Joined: 22 Apr 2009
Posts: 1674
Location: California
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| Posted: Wed Dec 02, 2009 1:23 pm Post subject: |
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| jasonp99 wrote: | | Kenster1 wrote: | Can you also clarify something at Wellstrade.....
If you have a joint regular account, his Roth IRA and her Roth IRA --- all 3 accounts will get their own 100 trades/year allowance (so 3 x 100 trades/yr)? |
Yes, that is true, as long as they are all linked to the same joint PMA checking account. However you cannot "see" all accounts when you login because IRA accounts are not joint. When my wife logs in she can see her IRA accounts, but not mine. Which is a pain because my wife has zero interest in managing investments. |
This is the way it is at Vanguard as well. I just login as my wife and pretend to be her. I have her holdings under my account as "outside investments", but it would be better if I could just tie her account to my login. Is that possible? |
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Default User BR
Joined: 17 Dec 2007
Posts: 976
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| Posted: Wed Dec 02, 2009 1:33 pm Post subject: |
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| LesterFreamon wrote: | | You can link your Wells Fargo checking account to all of your Wells Fargo brokerage account. |
Here's the WF page with the sweep alternatives:
https://www.wellsfargo.com/inv....ernatives/
As others have noted, you can link an outside account for the sweep, so if you have a high-yielding advantage account or something you can use that. I don't know if you would be able to link a MMF at Vanguard. For high-balance customers, some MM funds are available for sweep. However, they aren't much improvement at this time. Here are the sweep rates:
https://www.wellsfargo.com/inv....eep/rates/
Normally, I just buy stuff with it.
Brian |
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Kenster1
Joined: 28 Feb 2007
Posts: 2737
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| Posted: Wed Dec 02, 2009 1:38 pm Post subject: |
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| mikep wrote: |
This is the way it is at Vanguard as well. I just login as my wife and pretend to be her. I have her holdings under my account as "outside investments", but it would be better if I could just tie her account to my login. Is that possible? |
Check out the Agent Authorization Form at Vanguard:
https://personal.vanguard.com/...._mode=true
"Use this form to grant another person (agent) full or limited authority to act on your accounts."
Or call them to ask about this feature.
_________________
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health. |
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CaveatEmptor
Joined: 01 Jan 2009
Posts: 298
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| Posted: Wed Dec 02, 2009 1:41 pm Post subject: |
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| To all the folks who said "of course you can buy Vanguard Prime MM (VMMXX) if you pay brokerage fee / commission": I just tried doing this with my non-Vanguard brokerages and neither allowed it. One is the Fidelity Brokerage that is popular with so many here -- it does not even recognize the existence of VMMXX. To me it is interesting that WT allows the purchase of VMMXX. |
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mikep
Joined: 22 Apr 2009
Posts: 1674
Location: California
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| Posted: Wed Dec 02, 2009 1:44 pm Post subject: |
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| Kenster1 wrote: | | mikep wrote: |
This is the way it is at Vanguard as well. I just login as my wife and pretend to be her. I have her holdings under my account as "outside investments", but it would be better if I could just tie her account to my login. Is that possible? |
Check out the Agent Authorization Form at Vanguard:
https://personal.vanguard.com/...._mode=true
"Use this form to grant another person (agent) full or limited authority to act on your accounts."
Or call them to ask about this feature. |
Thanks I will check into that! That will simplify things, and I get to donate $10 to a notary as well. |
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mfen
Joined: 21 Jun 2009
Posts: 589
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| Posted: Wed Dec 02, 2009 1:46 pm Post subject: |
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| Quote: | | This is the way it is at Vanguard as well. I just login as my wife and pretend to be her. I have her holdings under my account as "outside investments", but it would be better if I could just tie her account to my login. Is that possible? |
If you are talking about all of your accounts (wife and yours) are at Vanguard, yes you can. I manage all household Vanguard accounts under one UserID. I have POA on John's account as he does on mine. Once you have authority for an account it should show up on your page as an account you can trade in (ie, active, not an outside investment). You probably will have to make one phone call to get this set up properly.
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Maryanne |
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livesoft
Joined: 01 Mar 2007
Posts: 12466
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| Posted: Wed Dec 02, 2009 3:58 pm Post subject: |
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| mikep wrote: | | Thanks I will check into that! That will simplify things, and I get to donate $10 to a notary as well. |
I just go into my WellsFargo bank where they do this stuff for free (and free Medallion Signature guarantees as well). |
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