It looks like you're new here. If you want to get involved, click one of these buttons!
Instead of sitting still and letting my assets move uncompensated I instead actively move my assets twice. Once to Merrill Edge and then again to TD Ameritrade. I received bonus transfers totaling $2,500 which neither Schwab nor USAA where willing to offer me.USAA recently "sold" their Investment division to Charles Schwab for $1.8 Billion. That's $1,800,000,000 in cash. USAA will transfer $90 Billion in assets to Schwab sometime in May 2020. I asked how individual investors (there are 1 million) will benefit from this sale. I am still waiting for that answer. This latest move may not mean anything for the orphan investors who are leaving USAA for Schwab. Doesn't look like individual account holders will receive any of this $1.8B as a "bonus" for this asset transfer.
The 1 million investors seem due some it not all of this windfall.
That's $6,000,000,000,000 AUM. The average account balance ($6T/28M accounts) is about $272K / account. TD paid me a bonus transfer of $1,500. This will not be offered to me if I sit and wait for the "acquisition transfer" to happen between TD and Schwab.Charles Schwab SCHW has concluded the acquisition of TD Ameritrade Holding for roughly $22 billion. This led to creation of a behemoth in online brokerage space with combined client assets of more than $6 trillion and serving nearly 28 million brokerage accounts.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
Comments
https://wallethacks.com/ally-invest-review/
The 13 Best Brokerage Account Promotions and Bonuses for 2020:
https://wallethacks.com/best-new-brokerage-account-promotions/
Chase Private Client Offer ($2000):
https://account.chase.com
I'm 80% moved from TDA > Schwab. They gave me 2 years of free options trades when I moved 200K. I wasn't looking for any bonus, but it was a nice touch. I should followup to see what they'll do for me now that I've moved significantly more over to them in recent days.
stay safe , Derf
TD Ameritrade (formerly Ameritrade) was a publicly traded company, 40% owned by Toronto Dominion Bank. So when Schwab acquired TD Ameritrade, likewise the owners of TDAmeritrade (stock holders and TD Bank) were the ones to benefit, not the customers of the business.
If Vanguard Brokerage Services were to be acquired by Schwab, it would be the owners of VBS to benefit. It turns out that "Vanguard Brokerage Services [is] a division of Vanguard Marketing Corporation." Vanguard Marketing Corporation in turn is "a wholly-owned subsidiary of The Vanguard Group, Inc".
It is common knowledge (a way of saying I'm too lazy to provide a citation) that The Vanguard Group is owned by Vanguard mutual funds which in turn are owned by the Vanguard fund shareholders.
So, if VBS were sold to Schwab, its owners, in this case Vanguard mutual fund investors, would be the ones to benefit. Not the customers of VBS, except to the extent that they were also Vanguard fund investors.
Aside from that point, if a company is going to treat one customer differently than another (offer different incentives) this leave the company open to criticizism at the very least and fewer satisfied customers at most.
Though Scwab offers a transfer bonus to individuals who open a new account, it will not offer any incentives to these TD accounts acquired in the deal. Seems inconsistent to me from a customer service perspective.
Something like that seems perfectly reasonable. Rarely does a broker offer incentives to existing clients to retain them. In this sense, Schwab is treating its customers the same - regardless of how it acquired their business, once acquired, customers are not paid bonuses.
Financial institutions will often offer bonuses to add "new money". That's something different. You're not bringing new money to Schwab from outside. For example, here's some fine print on Merrill Edge's offer: "Assets transferred from other accounts at Bank of America, MLPF&S, U.S. Trust, or 401(k) accounts administered by MLPF&S do not count towards qualifying net new assets."
Where is the outrage here? Merrill is not giving bonuses for money already in the BofA empire. It doesn't matter that the cash is new to the brokerage business if it is coming from a BofA bank account as opposed to a Chase account. It doesn't matter if assets are coming from a US Trust account that BofA acquired in 2007, as opposed to assets coming from Schwab. (Which in itself is interesting, because BofA used to own Schwab.)
Back in the 90s, the same customer acquisition games were being played by the long distance phone companies. Cash a check and switch your service. Should companies have sent "cash and switch" checks out to customers they'd already acquired via mergers? Or would that be "treat[ing] one customer differently than another"?
Stay Safe, Derf
My point is that these bonus offers are often tiered. If an existing customer brings more AUM over I would expect an existing customer would receive that tiered incentive. That seems fair.
Until ThinkDesktop gets integrated into the Schwabverse, I'm going to grumble quietly b/c I would do all my stock/option buy/sells in that app versus the website. That said, I'm keeping some $$ at TDA both for account/record access and if I want to active trade or charting using my own indicators/scripts.
There is an increase in USAA's revenue and thus an addition to its balance sheet. What USAA will do with that money (improvements, premium credits, whatever) is a different question.
As near as I can tell, the USAA owners are its policy holders, not all its customers. It was formed as a mutual insurance company. Ownership by policy holders is what "mutual insurance" means. USAA seems emphatic in stating that "Use of the term 'member' or 'membership' refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA." (Many USAA pages have this footnote.)
So like Vanguard, only the a subset of its customers - not the brokerage customers - would benefit from the sale.
See also this page that seems to say that how well the company does determines dividends to (only) insurance policy holders.
https://communities.usaa.com/t5/Investments-and-Education/How-do-I-buy-stock-in-USAA/qaq-p/160763
Ah yes, the practice of benefiting new customers at the expense of existing customers. It's very common, though not often as blatant or infuriating as with cable companies.
How often do you see offers like: 20% off for first purchase by new customers, or: sign up for our newsletter and get X? It's a way of acquiring customers. Once acquired, some businesses assume that their customers are sticky. Banking for example - they assume that you'll put up with 0.01% interest because it's too much effort for you to move accounts.
You've identified one of the worst offenders - cable companies. Their "locked in rates" creep up month by month. They figure you won't notice or care about a dime here, a buck there. And when that "lock" expires, you have to go begging for a deal that's half as good as new customers get. They're betting that many people won't even ask; that few will walk without asking first. They're probably right.
I know we're getting way off topic for this thread but I was paying $90/mo for Comcast for internet only b/c I didn't need phone or cable, and wouldn't bundle just for the sake of bundling stuff I didn't use and giving them more subscriber counts. I got an offer for FIOS for what's essentially $35/mo for better-quality, symmetrical 100MB internet access (plus a year of Disney+ for free) and I am *very* pleased. At least Verizon worked to earn my business -- unless I callto threaten cancelling, Comcast just expects me to bend over every year (just like SiriusXM does).
Paid $70 for a year of Disney plus. About 8-10 good shows. Than ran out of stuff to watch.
Several animations are quite good if into that type stuff. Hamilton’s very good. But not as enjoyable as seeing it live, which I did.
Stuck with 4G for internet. Unlimited now. Able to stream movies for first time. Waiting for Musk to get his stats running.
My TDA guy suggested I leave a foothold in my TD account to keep it active in order to have easy access to my records, statements, tax forms, etc. So I'm doing just that by leaving a few dog stocks DRIPing into themselves --- but otherwise I've been moving the rest of my TDA to Schwab in large chunks every week or so.
The move will trim the combined workforce by about 3%, San Francisco-based Schwab said Monday in a statement. The cuts are part of an effort to reduce “overlapping or redundant roles.”
https://www.bloomberg.com/news/articles/2020-10-27/charles-schwab-to-cut-1-000-jobs-in-td-ameritrade-integration?srnd=premium&sref=368neHRO
It's also a run to the bottom with fees too. Who can offer the same/more services for zero-lower fees and why you have seen mergers.
(2) Will Schwab allow monthly repeat purchases in these funds without transaction fees after the initial purchase (with a one-time commission)? This was something I liked about TDA.