It’s about liability. By law, a fiduciary must put the interests of the client first.
Receiving a large incentive is very much in my interest.
3 Likes
In the process of doing a partial asset transfer to meet a promo, I got a call from the departing broker who ended up offering me more to stay and cancel the transfer than I was getting to move it. I did it anyway for a combination of reasons, but it was good to know things are so competitive for our business.
Good to hear – mind sharing the departing brokerage firm? Was it a local rep?
Several years ago, a Fidelity rep from HQ called me tried to offer up a retention bonus, but not match how much I’d be getting from TDA. Etrade HQ seems to call me up every time I transfer out, but haven’t offered up any cash…
Just got off phone with Fidelity. They are offering bonuses of cash.
But new scale starts at $2,500 for $1,000,00 for 9 months and goes up from there. to $5,000 for $5,000,000.
I was told they had discontinued cash bonuses for smaller amounts as too much work.
I also discovered a promised previous bonus had not been credited, and would try to have it done now.
1 Like
Reviewing the possibilities for earning bonuses, it appears many firms no longer offer bonuses, at least for smaller amounts, including Bankwest, PNC, CITI, and CREF. Mergers have eliminated or will eliminate Scottrade and Capital One Investing. Logically, these may be sources of funds, especially for those who are trying to reduce the number of accounts they have.
The only major new firm is Ally Investing which now has bonuses, at least for large sums.
I canceled my old Trade King account a while ago with the idea of being able to get bonuses from them.
The standard bonus at least for those with million plus sums appears to be $2500, with a few willing to go higher for larger sums (and probably others will negotiate). This is .25%.
This appears to be available from E Trade, Fidelity, Ameritrade, Merrill, and Schwab (assuming they still will match offers). Firsttrade appears to have $300 available in IRA’s for $100,000, which in percentage terms is .3%.
The potential bonuses I identified add up to $15,300 and perhaps more if move a lot to certain firms. In my circumstances, I would be unable to collect from all firms because I already have money with the major firms and I doubt if I could get away with transferring it out, and then bringing it back immediately (although after a while, this might be possible).
Thus, it appears firms should be divided into either those receiving money, or losing it. Those you have no money with (Ally for me) are obvious receivers, and those who you have reasons to leave obvious sources (PNC has a maintenance fee for IRA’s and Capital One Investing is transferring accounts to ETrade, so you might want to try for a bonus with your funds there, especially since they are waiving transfer fees now.
Of course there are other complexities, such as some firms limit bonuses to a total for IRA and regular accounts (Merrill) so you can take only one. They differ in how many fees they will cover also, and how long the money must stay put.
Any one know of any bonus offers I may have missed, or non-obvious complexities.
3 Likes
Definitely fewer players around these days. Just hoping the bonus offers won’t diminish further with less competition.
Fortunately, the big three (Etrade, TDA, and Merrill) seem to have no problems with repeats/churning. I’ve transferred out, then back in, usually in 6+ months, and have had been credited the bonus every time.
Today’s rumors were TDA might be in the market for buying E*TRADE, which would suck a lot for many reasons.
So if I have an account between 250k - 500k and contact Schwab any chance they offer up any kind of bonus?
Talked to Schwab today. I was told they will match offers from other firms. This means they are one more firm with for instance the $2500 for a million offer.
1 Like
I did not see Ally mentioned, but found that they offer a variety of bonuses for various opening trading deposits. I am not familiar with their trading platform or execution quality.
Open a new Self-Directed Trading account by 9/30/18 and fund within 60 days of account opening to take advantage of a bonus based on your deposit amount.
$3500 + free trades — $2MM
$2500 + free trades — $1MM
$1200 + free trades — $500k
$600 + free trades — $250k
$300 + free trades — $100k
$200 + free trades — $25k
$50 + free trades — $10k
1 Like
Thanks. A tidbit about the holding period:
Once the bonus is credited to the account, the bonus and qualifying deposit (minus any trading losses) is not available for withdrawal for 300 days.
1 Like
Is that a normal holding period for brokerages?
Also, probably legally required, but not confidence inspiring …
Holding periods required vary with the firm, with year being common. I believe Fidelity and Merrill are 9 months, but these depend on the offer. Technical details would include how they would treat required IRA withdrawals, and possibly dividends etc.
Although small change, a restriction on withdrawing the bonus or dividends may force you to hold it as idle cash or to pay a commission to invest it. An automatic dividend investment plan may be useful in these cases so you do not spend much on commissions to stay fully invested.
1 Like
The Ally offers are only available for new customers.
They are a descendant of Trade King, and some may have an inactive account left over from then. I had canceled mine to leave an opening for future offers.
On first call I was told in spite of this, I was ineligible, but on pressing was told I was. After the required deposits were made, I should call to be sure the bonus was added. This raises a little concern.
Some who may have taken advantage of Trade King offers previously may want to close an old, in active account to have eligibility for future offers. Previous offers had required you not have been a customer with three months.
I was told your bonus could be earned on either IRA’s or regular brokerage (higher of the two), but it is worth inquiring.
I would appreciate any recent experience on their service quality. Traditionally they have gone after small accounts, and their bonus offers suggest they are competitive for million dollar plus accounts, but they may have a cost minimizing infrastructure.
3 Likes
Talked to ETrade about bonuses. Was told they had a rule that you could get a bonus of a particular type only once (which can prevent churning) and cold affect you if you had taken a bonus years before, and may affect some who have been at this for a while.
I also learned they had a separate bonus schedule which was unlisted but needed approvals to offer which appeared to provide for $4,000 for a million, and then went up to $6,000 for two million, and $10,000 for 5 million. Does anyone know of other firms which can compete with these? In these dollar amounts I think other firms may have freedom to negotiate, or to match other offers.
1 Like
I was talking to TDA about bonuses and they also have higher tier bonuses in the several $M range. I forget how much they offered and don’t have my notes handy, but I think the ET ones sound better. The main issue was that TDA has been jerking me around - first saying that wanted me to transfer margin balances (as well as stocks) and then after I did that, counted the margin as a negative against the value of my stocks so I got no credit at all for it. Apparently they’re more into raising advisory / managed account assets these days, and not so much about active traders, margin users, etc.
Are you re-using the same promo code twice, for let’s say the two cash account bonuses in 2017?
Since it requires 1 year lock-in, the previous account is still open by the time you received the second bonus?
On money Hustler I noticed a offer from Betterment of AA miles which is 30,000 for $100,00 deposit, and 15,000 for $50,000, 5000 for $25,000.
The required holding period is apparently only 2 months, which might make it attractive to some.
It is not perfectly clear how this applies to existing customers.
Betterment is not a traditional brokerage firm but one that offers computer managed accounts that provide a high degree of diversification and automatic harvesting of tax losses (done by selling one exchange traded fund and moving to a different one of the same type). This should be attractive to many small investors, who I think woulld do better with them than on their own.
The offer is not available for IRAs.