Help Me Choose a New Broker

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Topic Author
chris319
Posts: 587
Joined: Thu Jan 28, 2021 6:04 pm

Help Me Choose a New Broker

Post by chris319 »

I am tiptoeing back into margin investing. It's been profitable so far except for one thing: the margin interest rates at TD Ameritrade are killing me at 8%. However, I love their zero commissions.

One thing I like about TD Ameritrade is the free Gainskeeper which comes in very handy at tax time, especially if you have wash sales.

I've looked at Interactive Brokers and their margin rates are very attractive. However, I'm not sure how they would fare at tax time.

Can anyone recommend a brokerage that has a combination of low margin rates and deluxe tax reporting software such as Gainskeeper?

There is also a program which I just found out about called TradeLog which looks like it is a competitor to Gainskeeper. Is anyone familiar with this?

I've been audited by the IRS once. I went to the IRS office and sat while the guy clicked around on this computer for 2 1/2 hours. The IRS thought I had neglected to account for wash sales, but I showed them. I arrived with a spreadsheet and brokerage statements which documented my trades and lo and behold, I had NO wash sales that year. The agent was grateful that I had documented my trades and that was that. I have a feeling that in the future, the IRS will focus on low-hanging fruit and not me :greedy

Thank you.
The only person you have to please in life is yourself.
taojaxx
Posts: 219
Joined: Wed Jul 18, 2012 8:25 pm

Re: Help Me Choose a New Broker

Post by taojaxx »

Interactive Brokers tops anyone else on margin rates. At tax time, they send me the consolidated 1099 for my accountant to deal with and that's it.
But I'm a buy and hold on margin -guess you could call that Boglehead on steroids lol- so there's not that many trades anyway and I easily keep a watchful eye on the wash sales rule. Only happens when I TLH.
Better lucky than smart.
Topic Author
chris319
Posts: 587
Joined: Thu Jan 28, 2021 6:04 pm

Re: Help Me Choose a New Broker

Post by chris319 »

How about M1? Any good?
The only person you have to please in life is yourself.
taojaxx
Posts: 219
Joined: Wed Jul 18, 2012 8:25 pm

Re: Help Me Choose a New Broker

Post by taojaxx »

chris319 wrote: Sat Jun 05, 2021 3:47 pm How about M1? Any good?
Guess it depends how big an exposure to your broker you will have -despite SIPC protection. Lots of folks speak highly of M1 -automatic rebalancing in particular. Not sure it has the tax related requirements you're looking for.
Better lucky than smart.
Sosftasha
Posts: 2
Joined: Sun Apr 25, 2021 3:58 am

Re: Help Me Choose a New Broker

Post by Sosftasha »

M1 says their margin rates are 2%. Actually blended on 500k would be a heck of a lot lower than 8. How is that possible? False advertising?
atdharris
Posts: 847
Joined: Wed Jan 02, 2019 3:18 pm

Re: Help Me Choose a New Broker

Post by atdharris »

M1 is 2% for their plus and 3.5 for regular. IB is 2.5% for their "lite" version and Pro is 1.5%. I want to get back into margin but all of my main taxable holdings are at Merrill Lynch and I don't want to move them.
Topic Author
chris319
Posts: 587
Joined: Thu Jan 28, 2021 6:04 pm

Re: Help Me Choose a New Broker

Post by chris319 »

I would love to go with M1 Financial but I just can't get into their "pie" paradigm. I called them and they said there is no way around it, so they're out.

I have asked TD Ameritrade about getting a break on my margin rate. I'm waiting to hear back from their margin department.
The only person you have to please in life is yourself.
bling
Posts: 932
Joined: Sat Jan 21, 2012 12:49 pm

Re: Help Me Choose a New Broker

Post by bling »

IB can't be beat for margin rates. yes it sucks that you have to pay commissions when everything else is free. that being said, there's no such thing as a free lunch. most other brokers make their money with payment for order flow (PFOF), so while your commission is $0 you will also get filled and pay 1 cent more per share than you otherwise would have with IB.
runninginvestor
Posts: 515
Joined: Tue Sep 08, 2020 8:00 pm

Re: Help Me Choose a New Broker

Post by runninginvestor »

Any chance you can call up a TD rep and negotiate your margin rate lower? I've hear people have done that at other brokerages in the past.
Topic Author
chris319
Posts: 587
Joined: Thu Jan 28, 2021 6:04 pm

Re: Help Me Choose a New Broker

Post by chris319 »

runninginvestor wrote: Thu Jun 10, 2021 5:43 pm Any chance you can call up a TD rep and negotiate your margin rate lower? I've hear people have done that at other brokerages in the past.
I did that yesterday. The rep was very attentive and responsive. He has to run it by the margin department and they will get back to me.

I'm very comfortable with TD Ameritrade, having been with them since before the dot-com boom. They don't pull any surprises on you or nickel-and-dime you. Very straightforward service. I hope that doesn't change under Schwab. I would like their margin rates to be more competitive.
The only person you have to please in life is yourself.
Topic Author
chris319
Posts: 587
Joined: Thu Jan 28, 2021 6:04 pm

Re: Help Me Choose a New Broker

Post by chris319 »

No need for a new brokerage after all. I like TD Ameritrade and have read enough stories about IB that I didn't feel totally comfortable about making the switch. I would have switched to M1 but for their "pie" paradigm and that they do the rebalancing for you.

I asked TDA for a break on margin interest, and 2 days later my margin rate had been lowered from 8% to 5.1%! All I had to do was ask. Not rock bottom and it is tiered depending on debit balance, but good enough for me.
The only person you have to please in life is yourself.
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