Schwab brokerage incentive $2,500 - - - thoughts?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Sandtrap
Posts: 1191
Joined: Sat Nov 26, 2016 6:32 pm

Schwab brokerage incentive $2,500 - - - thoughts?

Post by Sandtrap » Thu Jan 19, 2017 8:32 pm

After reading about "Brokerage Incentives" on the Bogleheads forum, I asked about it at Schwab. A Schwab account supervisor that I was familiar with and had helped me in the past, offered me $2,500 to move 1 million into Schwab. 1 year in or they take it back. He stressed that otherwise there were no "strings" on allocation or funds, etc. It was not advertised. He called the main corporate to get the okay. Told me that can sometimes get an okay for a brokerage incentive to bring in larger account business. Besides the 1 year or take it back there were no other limitations, restrictions, or fees.

Is this "legit"?
Has anyone here taken advantage of "brokerage incentives"?
Thoughts?

Thanks everyone for your help and advice.

BTW: I called Vanguard and spoke to a Flagship advisor. He said they don't offer "incentives" like that. Shucks :confused
Last edited by Sandtrap on Thu Jan 19, 2017 9:08 pm, edited 3 times in total.

Jack FFR1846
Posts: 5245
Joined: Tue Dec 31, 2013 7:05 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Jack FFR1846 » Thu Jan 19, 2017 8:38 pm

Fidelity has that offer as well, for everyone. I've received a number of Fidelity incentives for moving money at various times. I was going to roll over my IRA to Schwab last year but ended up going with Fidelity. When I wanted to take advantage of the Schwab offer again with a brokerage, I found that since I had technically opened an account, I was no longer eligible.
Bogle: Smart Beta is stupid

User avatar
in_reality
Posts: 4105
Joined: Fri Jul 12, 2013 6:13 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by in_reality » Thu Jan 19, 2017 8:49 pm

Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?

For real excitement and adventure, I strongly suggest using Vanguard:

Today, I got a query from Vanguard asking me details about "the liquidation of these securities as I requested". Alarmed, I called them and found out that in their infinite wisdom, Vanguard had marked it as my request to liquidate the securities and transfer proceeds to a new brokerage :oops: Luckily, I got a sensible Vanguard rep who realized my concerns about the tax implications. I requested him to read the instructions on the request that Fidelity had sent over and the first line said something to the tune of "please transfer in kind to Fidelity Charitable. This is NOT a request for liquidation".


Jan. 18th 2017
viewtopic.php?f=1&t=208526

Oh and did I say that moving seven figures into Vanguard resulted ultimately in my IRA being renamed with an unknown beneficiary, and my taxable being renamed as part of someone else's estate (in an effort to get misplace assets back into my account)? Nevermind the accounting errors prior to that, I'm lucky it got resolved without my wife finding out as she is the anxious type. Dirty little secret here - can't tell her that you know!

$2500 is a small price for Vanguard experience. Trust me! They will fix it in the end (assuming you noticed in time perhaps). Honestly, Vanguard is the best and ten of 1000's of posts here will say that. Schwab has made mistakes too you know (not in my account though thankfully)!
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

Sandtrap
Posts: 1191
Joined: Sat Nov 26, 2016 6:32 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Sandtrap » Thu Jan 19, 2017 9:06 pm

in_reality wrote:Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?

For real excitement and adventure, I strongly suggest using Vanguard:
. . . . . . . .

Thanks for the reply, "in_reality". I also moved another 7 figures into Vanguard. Their call line waiting, even with Flagship, is nasty right now. No incentive. But I was planning to use both brokerages, Schwab and Vanguard, anyway.
I can be a "worry wart" (OCD) so will keep track of the funds as they come in an get verification via phone call. Especially after reading your experience. Ouch.

Sandtrap
Posts: 1191
Joined: Sat Nov 26, 2016 6:32 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Sandtrap » Thu Jan 19, 2017 9:10 pm

Jack FFR1846 wrote:Fidelity has that offer as well, for everyone. I've received a number of Fidelity incentives for moving money at various times. I was going to roll over my IRA to Schwab last year but ended up going with Fidelity. When I wanted to take advantage of the Schwab offer again with a brokerage, I found that since I had technically opened an account, I was no longer eligible.


Thanks, "Jack. . . ". I really needed to have some kind of "hard copy" verification of the "rules" despite the Schwab rep assurances. So with your input, I just emailed the "Link" to the Fidelity brokerage offer page and the Fidelity "fine print" to the Schwab rep for verification that that was indeed what we agreed on. His reply via email will give me the "official" validation I need.

Thanks again.

Longtermgrowth
Posts: 317
Joined: Thu Nov 26, 2015 1:59 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Longtermgrowth » Thu Jan 19, 2017 9:32 pm

Here's another thread discussing brokerage bonuses: https://www.bogleheads.org/forum/viewtopic.php?t=196884

I wonder if at some point all the major brokerages will not only offer a bonus, but a number of free trades for any stock/ETF per month with a certain balance...

LarryAllen
Posts: 628
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LarryAllen » Thu Jan 19, 2017 9:42 pm

I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.

User avatar
indexfundfan
Posts: 1819
Joined: Tue Feb 20, 2007 11:21 am
Contact:

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by indexfundfan » Thu Jan 19, 2017 10:06 pm

I have a 401(k) account with Schwab. A rep called me and asked me if I would like to roll it over into an IRA with them. The rep mentioned that since I already have another account with them, I am not eligible for a promotion bonus. However, he did mention that Schwab "may" match a competitor's bonus. I am still mauling on this. The bonus will go directly into the IRA and so it is not immediately taxable.
My signature has been deleted.

Sandtrap
Posts: 1191
Joined: Sat Nov 26, 2016 6:32 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Sandtrap » Thu Jan 19, 2017 10:10 pm

Longtermgrowth wrote:Here's another thread discussing brokerage bonuses: https://www.bogleheads.org/forum/viewtopic.php?t=196884

I wonder if at some point all the major brokerages will not only offer a bonus, but a number of free trades for any stock/ETF per month with a certain balance...

Thanks a lot for the link. I vaguely remember reading it before. While I'm glad I "tried it" this time, I'm not sure I'll take advantage of such things in the future because of the "strings attached".
Free trades per month for maintaining a certain balance would surely be nice.
A free toaster oven or rice cooker would be good too.
Last edited by Sandtrap on Thu Jan 19, 2017 10:14 pm, edited 1 time in total.

Sandtrap
Posts: 1191
Joined: Sat Nov 26, 2016 6:32 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Sandtrap » Thu Jan 19, 2017 10:13 pm

LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.

Thanks, "LarryAllen" for the info. Schwab didn't agree to the "multiples", only the 1 mil. I went with Schwab because they didn't have a fee to move the a fund out of their brokerage later on. Also with Vanguard, no fee.
You mention "paperwork".
What paperwork?

thanks again.

LarryAllen
Posts: 628
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LarryAllen » Fri Jan 20, 2017 9:09 am

Sandtrap wrote:
LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.

Thanks, "LarryAllen" for the info. Schwab didn't agree to the "multiples", only the 1 mil. I went with Schwab because they didn't have a fee to move the a fund out of their brokerage later on. Also with Vanguard, no fee.
You mention "paperwork".
What paperwork?

thanks again.


Interesting. Both TD and Etrade, the only two I talked to, agreed to the multiples.

Just the new account and old account transfer paperwork mainly. Then you have to set up online access, connect the new account to personalcapital, get new checks, etc.... Just a hassle. Minor hassle I suppose. However, I try to cut down on minor hassles as I get older.

carguyny
Posts: 183
Joined: Mon Aug 08, 2016 4:56 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by carguyny » Fri Jan 20, 2017 9:16 am

I did it with part of my holdings to TD last year - I think it was a little more than $2,500 at the time but I wish I didn't do it. I had originally moved them to Vanguard but that was a huge mistake.

Now just waiting for the 12 months to tick by and I'll move it back out. Just another account to clutter things - I'll be moving it Fidelity where I've been a customer for 7 years and never had an issue. They should offer you a similar transfer bonus.

evoila
Posts: 6
Joined: Fri Jan 20, 2017 2:31 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by evoila » Fri Jan 20, 2017 10:59 am

Most people here properly can't stand the thought of using BofA/Merrill, however I have a similarly large account and they've been very good.

User avatar
G-Force
Posts: 266
Joined: Sun Sep 20, 2009 3:03 pm
Location: Florida
Contact:

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by G-Force » Fri Jan 20, 2017 11:18 pm

evoila wrote:Most people here properly can't stand the thought of using BofA/Merrill, however I have a similarly large account and they've been very good.

Maybe 10 years ago this was true but Merrill edge has converted a lot of bogleheads and many on here have had a similar positive experience like your own.

an_asker
Posts: 1731
Joined: Thu Jun 27, 2013 2:15 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by an_asker » Fri Jan 20, 2017 11:22 pm

in_reality wrote:Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?[...]

I agree. If that $1 million is out of the market even for a day, a 0.5% upward swing in the market would mean that you've lost $5,000 to the market!!

As a result, only folks who can afford to leave $1 million to sit around in cash can make this play. And for them, is it worth it?

S17C
Posts: 208
Joined: Wed Jan 18, 2017 1:05 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by S17C » Sat Jan 21, 2017 1:17 am

A few years ago an employee pulled me into a bank with an offer of a $75 just to open a very basic checking account, no fees, no minimum balance, and no checks had to be ordered. The $75 money would be credited to the account in 30 days; then I was free to withdraw and close it no questions asked.

In those 30 days I got to know that bank's product lines, better services, higher CD interest rates, better online banking system, courteous staff, stylish ATM card, etc. Eventually I closed my accounts at my other bank and completely moved my business to the new bank.

User avatar
whodidntante
Posts: 1959
Joined: Thu Jan 21, 2016 11:11 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by whodidntante » Sat Jan 21, 2017 1:57 am

Take the money. And take someone else's money in a year. :twisted:

harikaried
Posts: 1179
Joined: Fri Mar 09, 2012 3:47 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by harikaried » Sat Jan 21, 2017 2:42 am

an_asker wrote:If that $1 million is out of the market even for a day, a 0.5% upward swing in the market would mean that you've lost $5,000 to the market!!
I would think most people transferring $1 million between brokerage accounts are transferring shares and not cash.

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jan 21, 2017 11:22 am

in_reality wrote:Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?

When out walking would you ignore a 100-dollar bill on the ground because its small potatoes? I never think of the bonuses in relation to the portfolio, but in terms of reward for effort. Generally that effort is low, and easy work at that. If I can generate $1000 from a half-hour's work, that's pretty good rate of pay.
Last edited by Earl Lemongrab on Sat Jan 21, 2017 11:28 am, edited 1 time in total.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jan 21, 2017 11:27 am

LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.

I would disagree with the "pain to do the paperwork" statement. Brokerages are improving the processes, but even the worst case ones aren't much of a pain at all. I'll quote my own mini-FAQ from the thread mentioned:

5. Isn't it a LOT of work?
Not really. The process depends a bit on the particular brokerages involved. About the worst case is needing to create a new account online (not hard) then downloading a transfer form that needs to be filled out, signed, and faxed or mailed. Some make it easier, allowing you attach the form to a secure message or even allowing you to set up the transfer completely with a web form. It takes about the same time to move 50k as it does 500k, so the bigger your accounts the better.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jan 21, 2017 11:30 am

an_asker wrote:
in_reality wrote:Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?[...]

I agree. If that $1 million is out of the market even for a day, a 0.5% upward swing in the market would mean that you've lost $5,000 to the market!!

As a result, only folks who can afford to leave $1 million to sit around in cash can make this play. And for them, is it worth it?

Once again, the mini-FAQ anticipates your question:
1. Won't my money be out of the market during these transfers?
Almost all brokerages support ACATS transfers, so you can move the assets in-kind, and they stay invested the whole time. It does take a week or two complete the process, so you shouldn't trade the assets.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jan 21, 2017 11:43 am

evoila wrote:Most people here properly can't stand the thought of using BofA/Merrill, however I have a similarly large account and they've been very good.

You might think that, but this past thread had many positive responses:

https://www.bogleheads.org/forum/viewtopic.php?f=2&t=150033
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
dodecahedron
Posts: 3133
Joined: Tue Nov 12, 2013 12:28 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by dodecahedron » Sat Jan 21, 2017 12:08 pm

LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.


I moved my Roth IRA from Vanguard to Merrill and the bonus ($1,000 for moving at least $250K and holding it there for six months) went into my Roth IRA. No taxable income. And the "paperwork" was minimal. All done on-line. I authorized the in-kind transfer of assets from Vanguard to Merrill.

I later did the same thing for a taxable account and of course in that case the bonus was taxable income.

Partly to test how things work, after the required 6 month holding period, I later moved most of the assets back to Vanguard. All done on line very easily and smoothly. No fees. And cost basis information travelled correctly along with the assets (though with a week or so lag on the cost the cost basis info.)

I recently moved my taxable assets from Vanguard to Schwab (partly for the bonus but more importantly because I like their Donor Advised Fund better than Vanguard's and holding my taxable account at Schwab will make it easier to make donations of appreciated securities in the future.) Again, all very smooth and easy.

Very positive experiences all around. Free money, minimum hassle, and a chance to be rewarded for "kicking the tires" of different investment platforms. When the dust settles, I plan to have just a couple of accounts to keep things simple for the long term.

ofckrupke
Posts: 231
Joined: Mon Jan 10, 2011 2:26 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by ofckrupke » Sat Jan 21, 2017 1:19 pm

dodecahedron wrote:I recently moved my taxable assets from Vanguard to Schwab (partly for the bonus but more importantly because I like their Donor Advised Fund better than Vanguard's and holding my taxable account at Schwab will make it easier to make donations of appreciated securities in the future.)


Not to hijack the topic, but: Schwab Charitable is at least partially responsible for the present cumbersomeness and latency of giving in kind from a Vanguard account to a DAF account at Schwab Charitable. Specifically, if Schwab Charitable would just get its own @#$%#$ account at Vanguard and set up the organization resolution to process the gift by xfer to said account, then a donor could send a wet-signature Vanguard "Giving Fund Shares to Organizations" (or the brokerage counterpart form) to Schwab Charitable, Schwab Charitable could make a copy to have a record of the share-lot specifics for full and correct attribution of the inflows to its Vanguard account from many Vanguard accountholder donors, and send the wet-signature originals on to Vanguard. The organization resolution could call for liquidation on the date of transfer to Schwab Charitable's account, and this would establish/determine the value of the gift. The advantage of doing things this way, in my pre-DAF experience with fund share gifts directly to final-destination donees, is timely transfer. [I sent a donee org the signed form on 21 Dec 20nn, it arrived before xmas, their employee filled in the organizational specifics on the 26th and overnighted it to Vanguard, and the shares crossed accounts and were liquidated on the 27th. On a gift transfer to Schwab Charitable that I ordered over seven weeks ago, I am still waiting for shares to be transferred from Vanguard's custodian to Schwab Charitable's.

To me anyway, transferring the Vanguard taxable account to Schwab in order to make future gifts through the Schwab Charitable DAF more expedient would seem too much like giving in. But I suppose that it would be changing one of the things that one can. (And I don't mean to trash Schwab generally - a comparatively happy customer since 1982.)

grayparrot
Posts: 61
Joined: Mon Jan 09, 2012 4:09 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by grayparrot » Sat Jan 21, 2017 1:42 pm

I have gone back and forth on this in a sort of behavioral finance debate with myself.

I have successfully received multiple $200-$1000+ bonuses to move anywhere from $50k to $500k.
It is a small pain; they can often start the transfer automatically but you'll have to sign a form and mail it in. Also, small errors (like cost-basis tracking) can be minor irritants as noted.

I don't worry about the "out of the market" issue. For under $10 you can pretty effectively hedge your exposure for the specified time. On average, over multiple bonus/transfer events, the difference is likely to be insignificant.

It is inconvenient, and I do often let opportunities pass because of the small hassle. But I've never spent more than two hours total doing paperwork or on the phone during these transfers. If I look at it as "do you want to earn $100-$500 per hour for two hours of general office tasks?" then I'm tempted to jump at it. On the other hand it is only a few basis points on my assets, and doesn't have a noticeable impact on my finances. On the other hand (somebody lend me a hand) I am frugal with myself and will often forgo an unnecessary "splurge" like an airline upgrade, because I choose greater discomfort for a few hours in order to save a couple hundred. So, it seems not to make sense for me to pass up these offers: I should take $500 for two hours, and use it to buy roundtrip comfort.

Always interesting to see if I'm being economically rational/logical across my decision portfolio :)

LarryAllen
Posts: 628
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LarryAllen » Sat Jan 21, 2017 1:52 pm

dodecahedron wrote:
LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.


I moved my Roth IRA from Vanguard to Merrill and the bonus ($1,000 for moving at least $250K and holding it there for six months) went into my Roth IRA. No taxable income. And the "paperwork" was minimal. All done on-line. I authorized the in-kind transfer of assets from Vanguard to Merrill.

I later did the same thing for a taxable account and of course in that case the bonus was taxable income.

Partly to test how things work, after the required 6 month holding period, I later moved most of the assets back to Vanguard. All done on line very easily and smoothly. No fees. And cost basis information travelled correctly along with the assets (though with a week or so lag on the cost the cost basis info.)

I recently moved my taxable assets from Vanguard to Schwab (partly for the bonus but more importantly because I like their Donor Advised Fund better than Vanguard's and holding my taxable account at Schwab will make it easier to make donations of appreciated securities in the future.) Again, all very smooth and easy.

Very positive experiences all around. Free money, minimum hassle, and a chance to be rewarded for "kicking the tires" of different investment platforms. When the dust settles, I plan to have just a couple of accounts to keep things simple for the long term.


I would be interested if the IRS agrees with you that it is not taxable income!?

ofckrupke
Posts: 231
Joined: Mon Jan 10, 2011 2:26 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by ofckrupke » Sat Jan 21, 2017 2:06 pm

LarryAllen wrote:
dodecahedron wrote:
LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.


I moved my Roth IRA from Vanguard to Merrill and the bonus ($1,000 for moving at least $250K and holding it there for six months) went into my Roth IRA. No taxable income. And the "paperwork" was minimal. All done on-line. I authorized the in-kind transfer of assets from Vanguard to Merrill.


I would be interested if the IRS agrees with you that it is not taxable income!?


Why would it be taxable? It was the asset under the Roth IRA umbrella that earned the reward, which was deposited in a Roth IRA much as would transpire for a dividend earned by some stock shares in that account.

Did one of your custodians send you a 1099 for a reward earned by transfer of tax-advantaged assets and deposited in the destination tax-advantaged account? If so, what custodian was that?

LarryAllen
Posts: 628
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LarryAllen » Sat Jan 21, 2017 2:25 pm

ofckrupke wrote:
LarryAllen wrote:
dodecahedron wrote:
LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.


I moved my Roth IRA from Vanguard to Merrill and the bonus ($1,000 for moving at least $250K and holding it there for six months) went into my Roth IRA. No taxable income. And the "paperwork" was minimal. All done on-line. I authorized the in-kind transfer of assets from Vanguard to Merrill.


I would be interested if the IRS agrees with you that it is not taxable income!?


Why would it be taxable? It was the asset under the Roth IRA umbrella that earned the reward, which was deposited in a Roth IRA much as would transpire for a dividend earned by some stock shares in that account.

Did one of your custodians send you a 1099 for a reward earned by transfer of tax-advantaged assets and deposited in the destination tax-advantaged account? If so, what custodian was that?



I just did mine in 2016 so no 1099 but I won't be surprised if I get a 1099. However, even if no 1099 I thought the definition of income includes all money received... but my exposure to tax class was a long time ago so I could be off. I'll go with the 1099 theory and see what it says but I do wonder about this. Although I also wonder why cash back rebates from credit cards aren't income and that is more than a de minimus amount for some.

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jan 21, 2017 3:17 pm

grayparrot wrote:I have successfully received multiple $200-$1000+ bonuses to move anywhere from $50k to $500k.
It is a small pain; they can often start the transfer automatically but you'll have to sign a form and mail it in.

I have never had to mail a form. The worst I have needed to do was fax. Most custodians support attaching forms to secure messages. As noted, a few support all online, at least for some of the sending brokerages.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
dodecahedron
Posts: 3133
Joined: Tue Nov 12, 2013 12:28 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by dodecahedron » Sat Jan 21, 2017 10:59 pm

LarryAllen wrote:
ofckrupke wrote:
LarryAllen wrote:
dodecahedron wrote:
LarryAllen wrote:I believe most of the brokerage houses offer similar. Schwab, Etrade, TD, Fidelity. Many are unadvertised. For example, they may say you get $2,500 for $1m and many will do multiples of that for $2m, $3m, etc.... It's "free" money but it's a pain to do the paperwork. Plus, it's taxable income. Not worth it to me and I have done it a couple times. Not worth it though.


I moved my Roth IRA from Vanguard to Merrill and the bonus ($1,000 for moving at least $250K and holding it there for six months) went into my Roth IRA. No taxable income. And the "paperwork" was minimal. All done on-line. I authorized the in-kind transfer of assets from Vanguard to Merrill.


I would be interested if the IRS agrees with you that it is not taxable income!?


Why would it be taxable? It was the asset under the Roth IRA umbrella that earned the reward, which was deposited in a Roth IRA much as would transpire for a dividend earned by some stock shares in that account.

Did one of your custodians send you a 1099 for a reward earned by transfer of tax-advantaged assets and deposited in the destination tax-advantaged account? If so, what custodian was that?



I just did mine in 2016 so no 1099 but I won't be surprised if I get a 1099. However, even if no 1099 I thought the definition of income includes all money received... but my exposure to tax class was a long time ago so I could be off. I'll go with the 1099 theory and see what it says but I do wonder about this. Although I also wonder why cash back rebates from credit cards aren't income and that is more than a de minimus amount for some.


1) Definition of income subject to taxation explicitly excludes returns earned by assets in Roth accounts (assuming all conditions for taxfree distributions from Roth accounts are satisfied.) However, bonuses earned for assets to taxable accounts will be taxable in the year they are posted and bonuses earned for assets in tax deferred accounts will be taxable when the funds are eventually distributed.
https://thefinancebuff.com/brokerage-ac ... r-not.html

2) As for credit card cash back tax treatment rationale, there is a good discussion here:
http://www.bankrate.com/finance/credit- ... ncome.aspx

curmudgeon
Posts: 1172
Joined: Thu Jun 20, 2013 11:00 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by curmudgeon » Sun Jan 22, 2017 2:09 am

I don't generally chase too many bank/brokerage bonuses, but I have been transferring $100K worth of index funds to fidelity every year to collect the 50,000 airline mile bonus. Can't use IRA for that one, but I can do it all online for little hassle.

User avatar
Leesbro63
Posts: 4721
Joined: Mon Nov 08, 2010 4:36 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Leesbro63 » Sun Jan 22, 2017 9:43 am

Sometimes the brokerages will pay the bonus, offered to new money, to existing "old money" customers who threaten to leave. Or more politely, who ask for a "retention bonus" for staying.

an_asker
Posts: 1731
Joined: Thu Jun 27, 2013 2:15 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by an_asker » Sun Jan 22, 2017 2:25 pm

Earl Lemongrab wrote:
an_asker wrote:
in_reality wrote:Is $2,500 even noticeable to you in the ups and downs of market performance and the size of your portfolio?[...]

I agree. If that $1 million is out of the market even for a day, a 0.5% upward swing in the market would mean that you've lost $5,000 to the market!!

As a result, only folks who can afford to leave $1 million to sit around in cash can make this play. And for them, is it worth it?

Once again, the mini-FAQ anticipates your question:
1. Won't my money be out of the market during these transfers?
Almost all brokerages support ACATS transfers, so you can move the assets in-kind, and they stay invested the whole time. It does take a week or two complete the process, so you shouldn't trade the assets.

Hmmm ... I didn't know that!! Now waiting for when I get to that point, hopefully the offers will still be around!! :oops:

harikaried
Posts: 1179
Joined: Fri Mar 09, 2012 3:47 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by harikaried » Mon Jan 23, 2017 6:57 pm

curmudgeon wrote:I have been transferring $100K worth of index funds to fidelity every year to collect the 50,000 airline mile bonus.
That's an interesting strategy. This year we'll be adding to our taxable brokerage accounts now that we'll have paid off debts and maxed out various desired tax-advantaged accounts. We currently use TDAmeritrade for the commission free Vanguard ETFs, but we've been planning on transferring to Fidelity for the $300 cash bonus for $100k. The 50k American/United/Delta miles for the $100k could be more valuable than the cash offer, but we already have plenty of other miles to use.

Going forwards, we might do something similar with adding monthly savings to TDAmeritrade to buy Vanguard ETFs for free then once it reaches $100k after the 12-month period for the bonus offer, we'll transfer enough shares to Fidelity.

HIinvestor
Posts: 1142
Joined: Tue Apr 08, 2014 3:23 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by HIinvestor » Mon Mar 06, 2017 10:00 pm

Currently, I've read that it's a $500 cash bonus for a $100K of new money to Schwab. I'm checking to see what retention bonus they will give for us keeping our current accounts with them. Fidelity was willing to work with us but so far and offered us $700 for keeping our funds and up to $2500 if we add funds; haven't had a call back from local Schwab office at all. The whole point of Schwab is because they have a "bricks & mortar" office in Honolulu while neither Vanguard nor Fidelity does. They also reimburse the ATM fees and have no foreign transaction fees, all of which are nice.

newbieboglehead
Posts: 19
Joined: Fri Feb 05, 2016 5:19 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by newbieboglehead » Tue Mar 07, 2017 4:20 am

Merrill Edge also has unadvertised bonuses. I asked whether they could match so-and-so's higher advertised special bonus for transferring $$$ into a new account. They said yes, requiring us to keep the funds in the account for nine months instead of its typical six months for account opening bonuses. So be sure to call, and if the first person says no, call someone else higher up. We received our bonus as promised. We've been very happy with Merrill Edge (and prefer it over ETrade--which we've closed--and Wells Fargo--which we've kept only because we're grandfathered into the free trade program.)

grayparrot
Posts: 61
Joined: Mon Jan 09, 2012 4:09 am

E-Trade now at 40bps bonus for $250k

Post by grayparrot » Thu May 18, 2017 4:38 pm

In case of interest to others, I called E-Trade and mentioned I was evaluating new brokerage platforms for a $250k new account. They have offered me $1000 as a bonus, which is among the more compelling on a percentage basis that I have seen.

TheGipper
Posts: 263
Joined: Fri Jun 26, 2015 9:52 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by TheGipper » Thu May 18, 2017 4:51 pm

I was going to transfer 50k recently to Merrill Edge for $250 bonus and to maintain platinum honors BoA status.

Schwab rep just offered me $500 to transfer 50k in. Nothing published, but he said they have broad latitude with transfer in bonuses.

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: E-Trade now at 40bps bonus for $250k

Post by Earl Lemongrab » Thu May 18, 2017 4:54 pm

grayparrot wrote:In case of interest to others, I called E-Trade and mentioned I was evaluating new brokerage platforms for a $250k new account. They have offered me $1000 as a bonus, which is among the more compelling on a percentage basis that I have seen.

Yes, that's a good one, and better than their advertised offers that I can find. Usually ETrade's retention period is six months, which is also good. Right now, the only one advertising $1000 for 250k is TD Ameritrade, and their period is 12 months.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

grayparrot
Posts: 61
Joined: Mon Jan 09, 2012 4:09 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by grayparrot » Thu May 18, 2017 5:10 pm

that is a good one! I also did Schwab's advertised $200 for $25k, but you've got me beat on the % basis!

TheGipper wrote:I was going to transfer 50k recently to Merrill Edge for $250 bonus and to maintain platinum honors BoA status.

Schwab rep just offered me $500 to transfer 50k in. Nothing published, but he said they have broad latitude with transfer in bonuses.

Ron Ronnerson
Posts: 715
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: E-Trade now at 40bps bonus for $250k

Post by Ron Ronnerson » Thu May 18, 2017 7:09 pm

Earl Lemongrab wrote:
grayparrot wrote:In case of interest to others, I called E-Trade and mentioned I was evaluating new brokerage platforms for a $250k new account. They have offered me $1000 as a bonus, which is among the more compelling on a percentage basis that I have seen.

Yes, that's a good one, and better than their advertised offers that I can find. Usually ETrade's retention period is six months, which is also good. Right now, the only one advertising $1000 for 250k is TD Ameritrade, and their period is 12 months.


I was in the process of transferring a bit over 250k from Scottrade to TD Ameritrade. The bonus offered was $1000 by TD Ameritrade to the account holder and there was also a $200 referral bonus, which would have been given to my wife's TDA account since she was making the referral. I got a call from Scottrade yesterday asking about the transfer request they'd received. When I explained why I was transferring, they offered to match the TDA bonus for opening a new account with at least $250k and bonus for referral ($1200 total). I said I'd already done a bunch of paperwork and would stay if they could beat the offer. They asked for a number and I proposed $1500. I got a call back today and they countered with $1300 to stay with them for a year. I agreed. They said the bonus should be added to the account next week.

In the meantime, that newly opened TDA account will still come to use. We'll get the $200 referral for my wife's account as long as $3000 is put into the new TDA account. We'll just move some funds from a checking account to qualify. All together, we'll make $1500 for keeping the funds where they are along with putting a relatively small amount into the new account. It turns out that sometimes the retention bonus can be even better than the transfer bonus.

student
Posts: 897
Joined: Fri Apr 03, 2015 6:58 am

Re: E-Trade now at 40bps bonus for $250k

Post by student » Thu May 18, 2017 7:17 pm

Ron Ronnerson wrote:
Earl Lemongrab wrote:
grayparrot wrote:In case of interest to others, I called E-Trade and mentioned I was evaluating new brokerage platforms for a $250k new account. They have offered me $1000 as a bonus, which is among the more compelling on a percentage basis that I have seen.

Yes, that's a good one, and better than their advertised offers that I can find. Usually ETrade's retention period is six months, which is also good. Right now, the only one advertising $1000 for 250k is TD Ameritrade, and their period is 12 months.


I was in the process of transferring a bit over 250k from Scottrade to TD Ameritrade. The bonus offered was $1000 by TD Ameritrade to the account holder and there was also a $200 referral bonus, which would have been given to my wife's TDA account since she was making the referral. I got a call from Scottrade yesterday asking about the transfer request they'd received. When I explained why I was transferring, they offered to match the TDA bonus for opening a new account with at least $250k and bonus for referral ($1200 total). I said I'd already done a bunch of paperwork and would stay if they could beat the offer. They asked for a number and I proposed $1500. I got a call back today and they countered with $1300 to stay with them for a year. I agreed. They said the bonus should be added to the account next week.

In the meantime, that newly opened TDA account will still come to use. We'll get the $200 referral for my wife's account as long as $3000 is put into the new TDA account. We'll just move some funds from a checking account to qualify. All together, we'll make $1500 for keeping the funds where they are along with putting a relatively small amount into the new account. It turns out that sometimes the retention bonus can be even better than the transfer bonus.


And then when Scottrade merged with TDA, you will have one account. This is great.

Ron Ronnerson
Posts: 715
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Ron Ronnerson » Thu May 18, 2017 7:29 pm

student wrote:
Ron Ronnerson wrote:
Earl Lemongrab wrote:
grayparrot wrote:In case of interest to others, I called E-Trade and mentioned I was evaluating new brokerage platforms for a $250k new account. They have offered me $1000 as a bonus, which is among the more compelling on a percentage basis that I have seen.

Yes, that's a good one, and better than their advertised offers that I can find. Usually ETrade's retention period is six months, which is also good. Right now, the only one advertising $1000 for 250k is TD Ameritrade, and their period is 12 months.


I was in the process of transferring a bit over 250k from Scottrade to TD Ameritrade. The bonus offered was $1000 by TD Ameritrade to the account holder and there was also a $200 referral bonus, which would have been given to my wife's TDA account since she was making the referral. I got a call from Scottrade yesterday asking about the transfer request they'd received. When I explained why I was transferring, they offered to match the TDA bonus for opening a new account with at least $250k and bonus for referral ($1200 total). I said I'd already done a bunch of paperwork and would stay if they could beat the offer. They asked for a number and I proposed $1500. I got a call back today and they countered with $1300 to stay with them for a year. I agreed. They said the bonus should be added to the account next week.

In the meantime, that newly opened TDA account will still come to use. We'll get the $200 referral for my wife's account as long as $3000 is put into the new TDA account. We'll just move some funds from a checking account to qualify. All together, we'll make $1500 for keeping the funds where they are along with putting a relatively small amount into the new account. It turns out that sometimes the retention bonus can be even better than the transfer bonus.


And then when Scottrade merged with TDA, you will have one account. This is great.


I asked about the merger just this morning. They said they expect the merger process to begin in about six weeks and for them to basically be one entity around September. The guy from Scottrade said once they get to that point, they'll just have to begin to change their signs from purple to green but things should essentially stay the same.

confusedinvestor
Posts: 277
Joined: Thu Mar 15, 2012 11:04 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by confusedinvestor » Fri May 19, 2017 11:43 pm

HI TheGipper,

Are you sure you got $500 for 50K transfer with Schwab ?

I contacted them today and they said that promotion was never available this year.

Would you please private message your rep name ?

TheGipper wrote:I was going to transfer 50k recently to Merrill Edge for $250 bonus and to maintain platinum honors BoA status.

Schwab rep just offered me $500 to transfer 50k in. Nothing published, but he said they have broad latitude with transfer in bonuses.

LadyIJ
Posts: 451
Joined: Thu Mar 06, 2014 8:00 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LadyIJ » Fri Jul 28, 2017 6:36 pm

I spoke to my Fidelity Rep March before I retired and thought I had time to get the cash incentive by rolling over from 401k. I called Fidelity today and that cash incentive is gone. Sorry my advisor did not inform me - I'm out about $1,200. Does anyone know of a reputable firm that is offering the cash incentives? Very disappointed - 500 free trades does not compare at all.

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Fri Jul 28, 2017 11:22 pm

LadyIJ wrote:I spoke to my Fidelity Rep March before I retired and thought I had time to get the cash incentive by rolling over from 401k. I called Fidelity today and that cash incentive is gone. Sorry my advisor did not inform me - I'm out about $1,200. Does anyone know of a reputable firm that is offering the cash incentives? Very disappointed - 500 free trades does not compare at all.

You can review the offers available here: http://www.hustlermoneyblog.com/best-brokerage-bonuses/

I'm assuming from the previous level you have about 500k to roll over. Is it already gone to Fidelity, or still at the 401(k) custodian?

Are you looking to invest in mutual funds, or ETFs? Fidelity has their own lineup of low-cost funds, which is why some liked getting the bonus there. As you note, they abruptly canceled their cash bonuses. If you're okay with ETFs, then TD Ameritrade and Merrill Edge are prime candidates.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

LadyIJ
Posts: 451
Joined: Thu Mar 06, 2014 8:00 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LadyIJ » Sat Jul 29, 2017 5:08 am

Earl Lemongrab wrote:
LadyIJ wrote:I spoke to my Fidelity Rep March before I retired and thought I had time to get the cash incentive by rolling over from 401k. I called Fidelity today and that cash incentive is gone. Sorry my advisor did not inform me - I'm out about $1,200. Does anyone know of a reputable firm that is offering the cash incentives? Very disappointed - 500 free trades does not compare at all.

You can review the offers available here: http://www.hustlermoneyblog.com/best-brokerage-bonuses/

I'm assuming from the previous level you have about 500k to roll over. Is it already gone to Fidelity, or still at the 401(k) custodian?

Are you looking to invest in mutual funds, or ETFs? Fidelity has their own lineup of low-cost funds, which is why some liked getting the bonus there. As you note, they abruptly canceled their cash bonuses. If you're okay with ETFs, then TD Ameritrade and Merrill Edge are prime candidates.

yes, it was abrupt. I like their format - easy purchase and sale of both mutual funds and stocks and the ability to transfer from retirement to non-retirement, i.e., cash for living (I just retired). I will check out the advantages of those two - I did come across the webpage you mention, but am unfamiliar with TD Ameritrade and Merrill Edge. Thanks.

User avatar
Earl Lemongrab
Posts: 2291
Joined: Tue Jun 10, 2014 1:14 am

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by Earl Lemongrab » Sat Jul 29, 2017 9:39 am

There's a thread dedicated to the subject:

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=19688

The ones I mentioned are quality brokerages that many here use. However, if you want mutual funds then they'll be more expensive and you won't be able to get Vanguard Admiral or equivalent funds. They work best if you will using ETFs. Another option is Schwab, as was mentioned at the start of this. They are another well-regarded custodian that has their own lineup of funds. You could contact them and see if they'll match the offer Fidelity pulled.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

LadyIJ
Posts: 451
Joined: Thu Mar 06, 2014 8:00 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by LadyIJ » Sun Jul 30, 2017 4:58 pm

Earl Lemongrab wrote:There's a thread dedicated to the subject:

viewtopic.php?f=10&t=19688

The ones I mentioned are quality brokerages that many here use. However, if you want mutual funds then they'll be more expensive and you won't be able to get Vanguard Admiral or equivalent funds. They work best if you will using ETFs. Another option is Schwab, as was mentioned at the start of this. They are another well-regarded custodian that has their own lineup of funds. You could contact them and see if they'll match the offer Fidelity pulled.
Thanks Lemon - I did call Schwab and they said they would most likely honor; however, they do not have Vanguard free of charge as my work plan does, so I might be better off staying with my Schwab work account - I can keep it in there until I would have to withdraw any funds and they could be years and years off. At that point Fidelity may once again offer an incentive. Frankly, I was on hold FOREVER with Schwab and the Fidelity customer service experience is by far superior.

munemaker
Posts: 1816
Joined: Sat Jan 18, 2014 6:14 pm

Re: Schwab brokerage incentive $2,500 - - - thoughts?

Post by munemaker » Sun Jul 30, 2017 6:05 pm

$2,500 on a $1,000,000 account is only 0.25%. Your equity investment varies more than that on a single day. $2,500 sounds like a lot of money but it is not very significant in this case.

Post Reply