Firstrade Brokerage- A mutual fund buyers/sellers heaven -My Experience

fundly

Over the years I have had wonderful investment ideas thrown my way on this site which, I very infrequently post to. I thought I would share my experience with everyone who might be interested, as it is saving me loads of cash. And no I have no affiliation with this company.

6 months ago Wellstrade (Wells Fargo) sent me a letter telling me that my free 100 per year transaction fee fund purchases/sales would no longer apply. This, after I opened the account 10 years prior because of this promised feature. Let us not even discuss the nefarious other stuff going on with this company. So after due diligence I moved most of my fund portfolio to Firstrade. I left a few NTF funds and ETF's which are fee free for trading in the account.

Since September I have found the company has over 12,000 funds all ntf. I really could not find any fund I was interested in, not available. Even better many of the institutional type funds are available with $500 minimum investments. So with no transaction fees and institutional expense ratios less than the investor funds, I am saving quite a bit of buckeroonees. ACH transfers are available immediately for trading. No 2-3 day waits any longer. The online site is very easy to use.

And now the bad. If you need customer service by phone expect a long, long wait, usually 20-90 minutes. That is not a typo. Having a huge load of cash invested ,does not give you preferential treatment unless you trade frequently and that does not include funds. Only one bank account for etf transfers can be linked to your account. Transfers and other business takes a little longer than at the major brokerages. Fund prices are updated around 6-7 am the day after the transactions or market price changes.

All in all for, for saving gobs of money especially if you have a large fund portfolio, will be a godsend,as long as you can tolerate the above quirks ,which I have found to be quite tolerable. My other big box brokerages have better service but of course the cost is higher . Hopefully this information is useful to some. I just love this site and wanted to provide a great money saving idea for those interested. Have a great day Fundly

BT2020

fundly said:

Even better many of the institutional type funds are available with $500 minimum investments.

And now the bad. If you need customer service by phone expect a long, long wait, usually 20-90 minutes.

Fundly

Although Firstrade will show $500 minimum for some funds, when you actually submit the trade it will get rejected. It may work for some funds but not all. It's annoying.

Not only will you have a long hold time at FT, you will be asked to use their email for follow up. It is SLOW and you never get the same rep who worked with you on the issue. Getting an issue resolved is frustrating experience to say the least.

They also have a weird way of how they track tax lots.
It seems like the will 'sum up' tax lots after a period of time.

I eventually closed my FT account because to save a few dollars on a MF trade just wasn't worth the frustration of dealing with their CSRs.

fundly

I have not had rejections occur as yet, with the 10 funds purchased. Also the $500 minimum for institutional funds is not available on all, but quite a few, as I noted. Also be aware the low minimum fund (investor and institutional) purchase prices generally only show up on the purchase ticket and not on the informational pages on the site ,which I forgot to mention are the old format M* ,(but current) which many MFO'ers, I believe miss. And yes, customer service can be a drag if you need much of it.

msf

I like Firstrade for the access it provides to some institutional/advisor class shares, especially without charging a transaction fee. I used it for this purpose several years ago; I'll wager I'm the only one here to have walked into its office, both before and after it moved.

But it is a barebones operation. Ultimately I found that even as a buy-and-hold investor the access to a small incremental number of funds unavailable elsewhere wasn't worth the hassle of having one more account to deal with.

Firstrade labels only some of its funds NTF. I'm guessing that means that like other brokerages (e.g. Schwab) it receives fees from these funds for servicing accounts. You'll find links to its separate lists of Load Funds, No Load Funds, and NTF funds next to the fund search box near the top of this page.

True, it currently charges no commission (transaction fee) for any of them. But I can't find a statement that it waives loads on any fund in its load list. Take PIMCO for example.

All the PIMCO A shares such as PIMAX are on the load fund list (Type = LOAD). It at least appears that one would pay a load for these shares, just as one would at Fidelity. Unfortunately, Firstrade does not sell PIMCO Institutional class shares such as PIMIX.

Speaking of WellsTrade, it looks like PIMIX is available there with no transaction fee and no minimum. I walked away from WT years ago for a variety of reasons and have never looked back. So this is not a recommendation to consider them.

fundly

Yes, @MSF any load fund ,I would not purchase at Firstrade and for load funds which are waived, I use my Fidelity account. I do hold PIMIX, as one of the few funds I still keep at Wellstrade. As with anything in life you pick and choose. All in all for no load, NTF funds , I still feel it was a good move to Firstrade and I am saving a good deal of money with the institutional funds availability. Thank you for your comments. Fundly

Graust

@msf

Sorry to correct you sir (as your repository of information is astounding), but PONAX IS no-load.....as are most (all?) of the A-share PIMCO funds, at Fidelity. The fund you linked was a Pioneer bond fund, PIMAX.

I think the fact that it shows “A shares” of funds as old funds does not necessarily mean it’s going to charge a sales load. I can’t find examples it seems

msf

You're absolutely right, I typed the ticker too fast. Thanks for the correction, I do make mistakes. PONAX is load-waived at Fidelity. Where Fidelity falls short on the Pimco funds is that it offers the more expensive I3 institutional class in lieu of the cheaper (and more familiar) I institutional class.

For example, it sells PIPNX (ER 1.24%) instead of PIMIX (ER 1.09%).

What Firstrade does well IMHO is provide access to some fund share classes that are normally only open to advisors and also to offer some institutional funds at lesser mins than one finds at other brokerages. That's where the big bucks are saved. As a buy-and-hold investor I consider the elimination of its commission fee of $9.95 on its 3,432 no load list an added a "nice to have" but not a "make or break".

It's the particular funds available, not the number of them that matters. Adding the 334 funds on its NTF list to those 3,432 other no load funds gives 3,766 funds (share classes) that one can buy there without paying a fee (i.e. no commission, no load). That puts it in the same ballpark as Fidelity (3431 according to its fund screener), E*Trade (4400+ according to its website), Schwab (4,219 according to its fund screener), Vanguard (3426 according to its fund screener), etc. Most of which would never interest me.

One plus not yet mentioned about Firstrade is that it caters to international investors.

fundly

A non customer doing research on the Firstrade site does indeed find 3,432 no load funds listed. However to my great surprise after becoming a customer and opening an account (no minimum) that number became 11,090 no load NTF funds when you are signed into the site and click on the no load fund list and they are all listed as such. Why this is so I have no earthly idea. Another advantage especially, are the Vanguard Admiral funds with lower ER's, available for a $500 minimum where at Vanguard it would be $50,000 minimum. I guess in order to get the full picture of what is available you would have to have an account open.

Derf

To err is human to forgive divine.
Stay safe, Derf

LewisBraham

What's security like? Do you feel like they could get hacked and that your information and money are safe?

fundly

That was definately a concern and part of the due diligence done prior to opening the account. They have been open since 1985 and accounts are insured for losses beyond SIPC limits if stolen. In addition ,if you are using a non prior identified device you have to key in an additional 4 digit access code after your password is entered to fully enter the site .Everything checked out. If I remember correctly they have over 4 billion in accounts. More information on Wikepedia is available.

little5bee

I used to have a trading account there. Personally, I prefer Schwab because my checking account is there, as well. Also, Schwab's customer service is excellent. If I have to pay a slight premium for those two things, so be it.

fundly

I re-balance twice yearly. Also I prefer to reapportion monthly dividends/gains to positions of my own choice based on the economy, my current financial and tax situation or cash needs. Typically I would do about 40 buys/sells a year. At Wellstrade that would have been $1,600/yr. At Fidelity about $800-1000/yr. Same at Vanguard. A free cash management account with checks/ATM card is available with 25K or more in the account, which I have. With the greater availability of cheaper institutional/advisor class funds and all no load funds (over 12,000) being NTF this was a no brainer for me. As always ,each to his/her own. I realized great cost savings and I wanted to share this ,with those who might be interested.

little5bee

Okay. Good to know that they have a bank now. That was a big minus for me when I had my account there...much too unwieldy and slow to transfer money. Great info...thanks!

fundly

Interestingly enough, the bank is the same as the one at Fidelity-UMB bank in Missouri.

BenWP

Schwab has some other perks that I like. The debit card issued with Investor Checking (its ludicrous to call it HY) has no foreign transaction fees and ACH transfer fees (nominally $25) from the brokerage account are waived. Just paid quarterly taxes electronically from the checking account, seamlessly. The service reps have been unfailingly helpful and knowledgeable; for the oldsters among us, speakers of standard English really help my comprehension. While I like CapitalOne for its credit card, I don’t like having to put all my effort into listening carefully to reps who struggle with the language. (I used to profess French lit, so I have some expertise in language; the curmudgeon in me does come out, nevertheless.)

carew388

Agree with BenWP. I use my Schwab checking account to pay my Duke energy bill and credit card bills by ACH transfer. Getting a Schwab Amex card was pretty easy as well.

carew388

Question for fundly: are the majority of Vanguard funds ntf, such as VWELX VWINX VWEHX . I'm only asking because I'd like to move my Vanguard account to a more user-friendly less-clunky brokerage platform.

wxman123

I've had Firstrade among the brokerages I use for many years and for precisely the reason stated by the OP. I've had one fund order rejected but most work, great to get a foothold in institutional shares at a low minimum. One minor difference in my experience is that ACH transfers are NOT immediately available at least for mutual fund purchases, not sure if that holds true for stocks and ETFs.

fundly

Every MF on the platform is NTF. Also instead of VWINX I bought VWIAX the admiral share with a lower ER with a $500 minimum. Same with the other Vanguard admiral funds so far. The site is quirky in that the M* info page shows the normal 50,000 minimum but on the buy ticket the minimums change to $500. I also have a Vanguard acct that was switched from the MF account that I had for 20 years and find that Firstrade is much easier to use online.

fundly

If the ACH transfer is initiated before 1pm then the funds are available almost immediately, at least that has been my experience. If after 1pm the funds are available the next day. Why. I am not sure. Possibly it is based on the amount of assets in the account. It was a surprise to me, as I expected a 5 day wait according to their information on the site. I have only bought MF's so far. I use other brokerages for my ETF,s etc. so far.

little5bee

@BenWP I opened Schwab accounts for both of my sons while they were in college. I liked that they could withdraw $20 or so out of the ATM with no transaction fee. Never liked the idea of them walking around with lots of cash, just to save money on a transaction fee.

msf

I'll first reiterate that if there's a specific fund that you want, there's a good chance that Firstrade has it with no brokerage-charged commission and that it may have a lower min than one would find elsewhere.

That said, there are a lot of other statements that seem to be misunderstandings or misleading; or I don't understand.

Every MF on the platform is NTF.
If NTF means "no commission", that's true. But if it means no fee including no load, that doesn't appear to be the case. (Note that load funds are generally commission-free everywhere even though you may still have to pay the load.)

Consider Praxis Genesis Growth Fund. It has only one share class, MGAFX. When I log in to Firstrade, go to the customer fund screener, check Fund Family (Praxis), and check Load Type (Load), this fund along with a few others shows up. (It does not show up if I select no load instead of load to screen.)

FWIW, it appears to be NTF (really NTF, i.e. load-waived) at TD Ameritrade.

Firstrade does sell this fund: I go to my mutual fund trading page (from the "Trading" drop down, select "Mutual Funds") and enter MGAFX. It says that at Firstrade the fund has a $1K min and three day settlement. Since I closed my account years ago I can't actually test a trade.

The site is quirky in that the M* info page shows the normal 50,000 minimum [for VWIAX] but on the buy ticket the minimums change to $500

Same as for me, so that's evidence that I'm looking at the same page when looking up VWIAX or MGAFX. Note that if one enters VWELX or VWENX one sees that Wellington is not open to new investors at Firstrade. But if you could open VWENX at Firstrade, you'd only need $500.

Old joke: Customer - the guy down the street is selling the same thing at half the price
Shopkeeper - why don't you go down the street and buy it there?
Customer - he doesn't have any left

after becoming a customer and opening an account (no minimum) that number became 11,090 no load NTF funds when you are signed into the site and click on the no load fund list and they are all listed as such.

Yet the customer screener shows "just" 9,903 no load share classes. In addition, it shows 6,316 load share classes. To borrow from Graeme Edge of the Moody Blues: which is right and which is an illusion?. Buffalo Springfield also comes to mind.

I re-balance twice yearly. Also I prefer to reapportion monthly dividends/gains to positions of my own choice based on the economy, my current financial and tax situation or cash needs. Typically I would do about 40 buys/sells a year. At Fidelity about $800-1000/yr

At Fidelity, I can add to a TF position for $5 and sell for $0. 20 buys and 20 sells would run me $100 bucks.

I'm glad you mentioned tax situation. Fidelity has had online cost basis services - specific lot identification and changing default disposal method - down pat for decades. These days, most other brokerages make it easy as well. All I've found so far at Firstrade is: "Please contact your broker if you wish to change the default tax-relief method for your account or specify different tax lots for liquidation".

https://www.firstrade.com/content/en-us/accounts/taxcenter/?h=costbasis

Though few in number, Firstrade does have some nickel and dime fees. It charges $15 (or $50) for check printing. It doesn't appear to provide ATM rebates and charges 3% for foreign transactions after the first one each month. (BTW, Fidelity's debit card is provided by PNC bank, not UMB.)

Lewis asked about security against hacking. A question worth thinking about considering that I was able to log in years after closing my account by just looking up my old login/passwd/pin in my home files. The system didn't suggest that I might want to change my password (no password aging).

It doesn't seem to offer two factor authentication, though it claims that a PIN constitutes "an additional factor". It does not.

there are three generally recognized factors for authentication: something you know (such as a password), something you have (such as a hardware token or cell phone), and something you are (such as your fingerprint). Two-factor means the system is using two of these options."

https://www.pcmag.com/how-to/two-factor-authentication-who-has-it-and-how-to-set-it-up

As near as I can tell, Firstrade doesn't provide secure email.
https://www.firstrade.com/content/en-us/customerservice/contactus
(The internal contact page has a different URL but the same info.)

Firstrade does meet legal requirements on security but doesn't seem to go beyond that.

We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your personal information. We protect your account information by placing it on the secure portion of our website and use industrial strength firewalls and encryption technology to protect personal information on our computer systems.

https://www.firstrade.com/content/en-us/customerservice/onlinesecurity/onlineprotectionguarantee

Note that SIPC insurance (or excess insurance) only kicks in when a brokerage is in financial trouble or filing bankruptcy. It doesn't cover run of the mill hacking or identity theft.

Firstrade, as with other brokerages (e.g. Fidelity), guarantees to cover your direct losses. This guarantee "does not include any tax consequences, legal fees and expenses, or any consequential, lost opportunity, special, indirect, incidental, punitive, exemplary or non-monetary damages."

LewisBraham

The thing I really don’t like about brokers and most financial institutions as far as I can tell is the agreement they make you sign to use arbitration instead of the courts if there are any problems. I could imagine in a hacking or theft situation that could be really problematic because arbitration in the U.S. generally sucks for consumers.

fundly

All MF's are NTF. No commission. I did not mention load. That is a separate item. In my account if you click on" research and tools", then click on mutual funds, a page appears where you choose( in small letters) the list you wish ,either load list, no load list or NTF funds. Clicking on the no load list brings up a page and at the bottom it notes there are 11090 funds on the list. My checks were free. My Fidelity and Firstrade checks both list UMB bank in Missouri. I did not look at the ATM cards.
If purchasing TF funds at Fidelity for $5 is by first setting up the account for recurrent purchases on a timed basis and then discontinuing this, I prefer just buying NTF without the extra work. There is no secure e-mail that i know of.
Again I have no connection to Firstrade. For those who are willing to deal with the negatives and fees are an issue with another company then this may be an option. I have had a good experience so far. Yours may be different. As I noted earlier, I buy load waived funds at Fidelity ,if need be. I think Fidelity is a great company and have had an account with them for at least 20 years. Due diligence as always before making any decisions.

catch22

@msf
I'm traveling outside of the thread subject, but....
Thank you.

I hear many pieces of lyric too, regarding investments, investing, money and business related to same.

You noted:

To borrow from Graeme Edge of the Moody Blues: which is right and which is an illusion?. Buffalo Springfield also comes to mind.

Especially with cerebral lyrics as those related to the Moody Blues and there are many other from that era. I could hear the string instruments with the words posted for MB. And I already knew what the song link would be for Buffalo Springfield.

Take care,
Catch