Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

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PrettyCoolWorkshop
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Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by PrettyCoolWorkshop » Mon Sep 11, 2017 12:10 pm

Howdy Bogleheads.

My fiancee is graduating college and entering the workforce as a programmer with an investment bank soon (this January). Good news all around, she worked there as an intern last summer and enjoyed the work and the people. She recently got her offer letter, which contained the following verbage:

Personal Trading Activity:...you will need to transfer any brokerage account(s) you own or in which you have a beneficial interest (including for example, brokerage accounts owned or controlled by your spouse) to [the investment bank]

I have been consolidating my accounts in Vanguard per conventional Bogleheads wisdom. This clause in the offer letter would make me move my accounts! Moving my accounts away from Vanguard is a pain in the butt, and also against my investment philosophy. I imagine that I would be willing to contribute future savings to the brokerage account at DW's employer, that seems somewhat reasonable (although still irksome, considering that Vanguard is **the best**).

Incidentally, our marriage date is planned to be before the start of her work. My questions:
1. Is this clause realistically enforceable?
2. Are my pre-marital assets considered under the clause, or only post-marital (joint) assets?
3. (a general question) If you have any experience with similar situations, please share!
Last edited by PrettyCoolWorkshop on Mon Sep 11, 2017 12:35 pm, edited 1 time in total.

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steadyeddy
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts!?

Post by steadyeddy » Mon Sep 11, 2017 12:17 pm

You'll need to work with the compliance department of her future employer to get specific answers to your questions. I can tell you this is a very common requirement among financial services employers to ensure their employees are not trading illegally (e.g. Insider trading, front running clients, etc.). It's extremely likely you will need to transfer all your assets if she wishes to accept the position.

alex_686
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts!?

Post by alex_686 » Mon Sep 11, 2017 12:25 pm

Yes, it is enforceable, but I have never heard of a fiancee having to disclose.

It would be both pre and post marital assets. You fiancee is a insider and has access to non-public martial information. Think front-running and insider trading. The firm is required to review activity to make sure nobody is breaking the law.

You will need to read the fine print. I Most firms have a list of firms that they are willing to work with. Mutual funds and treasuries tend to be exempt since it is harder to manipulate those markets.

laohan
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by laohan » Mon Sep 11, 2017 12:37 pm

Mutual fund only accounts are probably OK. Ask.

John Laurens
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by John Laurens » Mon Sep 11, 2017 12:41 pm

Starts with moving brokerage accounts, in a year no weekend football with your buddies. Break it off now.

Regards,
John

JBTX
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by JBTX » Mon Sep 11, 2017 12:45 pm

Yeah that is annoying, but on the other hand there could be some perks given your soon to be spouse works there. Also if you set up brokerage account you should be able to buy vanguard etfs within that brokerage account. A nominal fee may be involved.

Her having gainful employment will have much more to do with your financial success than where your brokerage account is set up. Celebrate her success, due your due diligence when moving the assets and move forward.

JBTX
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by JBTX » Mon Sep 11, 2017 12:47 pm

John Laurens wrote:
Mon Sep 11, 2017 12:41 pm
Starts with moving brokerage accounts, in a year no weekend football with your buddies. Break it off now.

Regards,
John
If the wedding is planned on your alma maters game day in the fall this is a huge red flag!!!!

PrettyCoolWorkshop
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by PrettyCoolWorkshop » Mon Sep 11, 2017 1:31 pm

Thanks for the replies everyone. Within my Vanguard accounts, I only own Vanguard ETF's and mutual funds. They are labelled as "brokerage accounts" when viewed on the website.

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dm200
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by dm200 » Mon Sep 11, 2017 1:37 pm

PrettyCoolWorkshop wrote:
Mon Sep 11, 2017 1:31 pm
Thanks for the replies everyone. Within my Vanguard accounts, I only own Vanguard ETF's and mutual funds. They are labelled as "brokerage accounts" when viewed on the website.
Yes - I think, sooner or later, Vanguard will convert all accounts to brokerage accounts.

I might suggest trying to speak with regulatory compliance folks both at Vanguard and at the investment bank. There may be legitimate ways around it -- BUT who knows?

alex_686
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by alex_686 » Mon Sep 11, 2017 1:44 pm

dm200 wrote:
Mon Sep 11, 2017 1:37 pm
I might suggest trying to speak with regulatory compliance folks both at Vanguard and at the investment bank. There may be legitimate ways around it -- BUT who knows?
Just talk to the compliance folk at the investment bank. They can set whatever standards they want. That being said they know that most of their employees are interested in investing and have family members that are interested. They will try to accommodate most requests as long as the burden on their compliance department is not too great.

I know a married couple who where both insiders at two different investment firms. Pre-clearing their trades was a such a hassle.

123
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by 123 » Mon Sep 11, 2017 2:23 pm

In these situations I think the compliance department wants employees etc to have accounts at a limited number of firms to facilitate account monitoring (the compliance department gets duplicate statements and/or electronic feeds). I would hope that a large discount brokerage, like a Schwab or Fidelity, is one of the options.
The closest helping hand is at the end of your own arm.

simas
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Re: Fiancee has job offer from Investment Bank- I'm required to transfer brokerage accounts?

Post by simas » Tue Sep 12, 2017 7:34 pm

"Just talk to the compliance folk at the investment bank. "

before you talk to anyone, have fiancée actual READ what is written regarding disclosures. I spend over a decade in financial services and had to complete and maintain these forms regularly, and in our cases for example the concern was material non public information (i.e. familiarity with internal performance number of the publicly traded corporation before such numbers are known to the street). So brokerages (unless in house) were no-no. However, mutual fund accounts where _only_ mutual funds could be held were fine. Fidelity 'converted' brokerage account into mutual funds only on my request and it immediately become non-issue


"I know a married couple who where both insiders at two different investment firms. Pre-clearing their trades was a such a hassle."
usually one of well known exceptions - if family members (partners) work at different FINRA members, each BD can control the rules only to their employee. zero issues.

read and re-read the disclosure rules. ask questions, that is what your compliance department where for and that is what they are paid for.


separately, an anecdote - when I did disclose (which involves having duplicate statements sent to compliance department on my BD), everyone complied except Vanguard. Vanguard said a nice letter back saying , ok compliance department , you are requesting something. However, the only relationship we have is with "simas" and he is the only one who can tell us what you do. Go get lost, we would do nothing for you or generally on requests from third parties. Compliance department came to me with WTF on their faces. I changed accounts to be mutual fund only and problem disappear. Go Vanguard!

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