Mutual Funds Being Transitioned to Schwab from TD Ameritrade

bee

I would like to consider going somewhere other than Schwab... hopefully with a transfer bonus and the ability to move assets "in kind".

When Schwab bought out USAA members (I being one) I was under the hopeful impression USAA accounts holders were to be partial recipient of this buyout ($1.8 B). We (as owners of these accounts) were not. USAA pocketed millions while members were told that this windfall would help enrich USAA member experience. A dividend from USAA would have been the right thing to have done for its members so I don't fault Schwab. I just felt like a pawn in this buyout. In addition, had I allowed Schwab to take custody of my accounts I would have had to liquidate my positions at USAA (to cash) which was not appealing to me. I decided to shop my account.

Merrill Edge was my first stop. I transferred funds "in kind"...collect my bonus. A year later I moved assets to TD Ameritrade "in kind" and received another bonus.

Schwab! got me again. TD Ameritrade was bought out by... Schwab!

It was a little bit of a part time job moving the account from USAA to Merrill to TD Ameritrade, but it was thousands of dollars for my efforts. Transfer bonuses were tax free since this was a Roth account.

Looks like I have until May to find a new brokerage for this TD Ameritrade account.

Here's one from Merrill I will look into:
merrill-edge-promotions

List of other Bonus Offers:
best-brokerage-bonuses/

LewisBraham

Fidelity might be the best alternative to Schwab.

rforno

I transferred the securities in my TD account to Schwab in 2020 w/o any problems whatsoever, and got a decent transfer bonus. Maybe that's because I did it long before they actually began moving accounts? *shrug* (I moved early b/c I didn't want to deal with the chaos of another broker merger)

My own history with this account: Started at OptionsXpress, got fed up w/their platform, moved to ThinkorSwim. OptionsXpress got bought by Schwab. Then ThinkorSwim got bought by TD Ameritrade. Now TD and Schwab have merged. Le sigh.

I think OptionsXpress platform still serves as the basis for Schwab's StreetSmart, which I avoid using. Can't wait for ThinkDesktop to be fully online at Schwab!

msf

A dividend from USAA would have been the right thing to have done for its members so I don't fault Schwab

The right thing to have done, as with any sale, was to have compensated the owners for the sale. USAA's members were customers receiving services. They were not owners merely because they were members.

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.

https://www.usaa.com/inet/wc/about_usaa_corporate_overview_main

However, USAA is a mutual company (not to be confused with a mutual fund) owned via Subscriber Savings Accounts. (This is similar to the way Vanguard customers own The Vanguard Group via investments in Vanguard funds.) It appears that members automatically get a Subscriber Account and via this account become owners of USAA.
http://www.savermetrics.com/2022/10/25/usaa-subscribers-savings-account-distribution-explained/

As suggested on The Military Wallet Site, owners (i.e. those with a Subscriber Account) would get some cash out of the sale:

All USAA members benefit from the sales to Victory and Schwab. By the end of 2020, USAA will have a new focus on insurance and banking– without trying to handle an investment branch. There might even be a little extra distribution in the Subscriber Accounts.

https://themilitarywallet.com/usaa-subscriber-savings-account-insurance-policy/

It looks like there was "a little extra distribution" to Subscriber Account holders, at least according to this member:

We receive two bonus checks annually as part of this relationship [with USAA].

The first for $412 was the annual distribution (dividend) from the Subscriber’s Account, a portion of the capital base for this mutual insurance company. USAA stated that the amount was partly from the sale of their asset management company as well as from their overall net income.

https://chipfilson.com/2020/01/remembering-long-time-members/

had I allowed Schwab to take custody of my accounts I would have had to liquidate my positions at USAA

Why would you have had to liquidate? Was Schwab requiring everyone to liquidate all positions, or just positions it couldn't hold. If it was the latter, are you now facing the same prospect - that your positions can be held by TDA but not by Schwab?

msf

rforno said:

I transferred the securities in my TD account to Schwab in 2020 w/o any problems whatsoever, and got a decent transfer bonus. Maybe that's because I did it long before they actually began moving accounts? *shrug* (I moved early b/c I didn't want to deal with the chaos of another broker merger)

Again from The Military Wallet:

If you don’t want to wait for the Schwab acquisition to close, then Schwab will pay you to make the transition on your own. It might seem unbelievable that Schwab will pay up to $500 for you to move now, but it’s a pittance against the total cost of moving over a million of USAA’s wealth-management clients.

https://themilitarywallet.com/usaa-victory-capital-schwab/

MrRuffles

E*Trade has bonuses too. After I opened an account, I got an email from a rep and, after some back and forth, they offered me 25% more than the public bonus.

Derf

Let me get this straight, a Roth account that is transferred & receives a bonus isn't taxed, yet a taxable account that's transferred is taxed on the bonus ?!

bee

Derf said:

Let me get this straight, a Roth account that is transferred & receives a bonus isn't taxed, yet a taxable account that's transferred is taxed on the bonus ?!

That is my understanding. The bonus, regardless of the account type, is also not considered a contribution. It doesn't get added as part of your contribution limit for the year.

bee

Thanks much for all the responses.