Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I moved 99% of my account out in October '20 after the deal closed, b/c I wanted my TDA FA to 'get credit' for my account as he'd been really good to me over the years. I also didn't want to deal with the drama/chaos of brokerage intergrations -- I've been through enough of them already.
Since then, I've kept it active with a tiny stock position and $1000 cash just so I have access to prior statements and moreso, to keep my access to ThinkDesktop, which is fan-frakking-tastic compared to Schwab's dinky browser-based 'active' trader platform.
When they tell me it's 'my turn' to be migrated, I'll transfer the rest over to Schwab and close the account, b/c I only need 1 Schwab account.
@Graust and anyone that automatically migrated from TD to Schwab,
My accounts migrated over the weekend. For each IRA account that migrated, Schwab created an extra zero balance account at Schwab. So, there are too many accounts in my profile. Did anyone else experience this?
Schwab did not carryover my cost basis settings and defaulted stocks and ETFs to FIFO and mutual funds to average cost basis. Strangely, the cost basis settings at Schwab look very primitive relative to how they were at TD. I do not see a way to change online the cost basis for mutual funds. Called the rep and was told I have to submit a paper form (no electronic signature form) request to change the default method for mutual funds and once selected, I can not change the method at the time of the trade or otherwise, except through another paper form request. The Rep is mailing me the form which i can fill and upload into the message center. (I was not able to pull up the form online though i do not have a pop up blocker.)
Sorry to hear about those troubles! We also migrated over this last weekend, but I have not experienced anything like that. MAN, that app is so much clunkier than TD’s….you have different screens for current values and daily change, and cost basis. Ugh. And no real way to change the layout that I can say.
Between than and recently opening an account at Robinhood to get the 3% IRA match….got some awful investing apps to learn. Makes me feel old!!
I haven’t tried out the website yet; I’m hoping that’s a lot better.
Per IRS requirements, Schwab defaults to the "On" setting for amortizing and accreting the cost basis on your fixed income positions.
Amortization applies to bonds bought at a premium (above par). The value of the bond is gradually adjusted downwards to par over the remaining life of the security.
Discount is accrued on bonds bought or issued at a discount (below par). The value of the bond is gradually adjusted upwards to par over the remaining life of the security."
I wanted to change the Schwab default so I do not include accretion until the bonds mature but that also required submitting a paper form (no electronic signature form).
My account transferred over without any margin and options privilege, even though the account holds a long term option short position.
As you guys check and find transfer issues that you had to fix, please post in this thread so the rest of us can check our transferred accounts to make sure there are no surprises later. Thanks.
Schwab did not carryover my cost basis settings and defaulted stocks and ETFs to FIFO and mutual funds to average cost basis. Strangely, the cost basis settings at Schwab look very primitive relative to how they were at TD. I do not see a way to change online the cost basis for mutual funds. Called the rep and was told I have to submit a paper form request to change the default method for mutual funds and once selected, I can not change the method at the time of the trade or otherwise, except through another paper form request.
Unfortunately, the industry has done a good job of conflating two different concepts: cost basis and share (lot) selection.
There are only two cost basis methods: actual basis and average basis. Generally speaking, stocks must use actual basis. (There is an exception for some dividend reinvestment plans, but let's not go there.) FIFO is a way of selecting shares sold; it is not a cost basis method.
If shares are being tracked using average basis, then the oldest shares are automatically sold first (FIFO) - there is no choice. If shares are being tracked using actual cost, then there are a variety of methods to select which shares are sold. You can explicitly indicate which shares you are selling (up to the date of settlement), or you can let the broker select them for you using your chosen algorithm, such as FIFO, HIFO, tax optimization, etc.
In order to change to or from average basis for a mutual fund account holding covered shares, one must submit a change request in writing to the broker. (One cannot change from average cost on uncovered shares without IRS permission.)
Where the rep seems to have gone awry was in telling you that this writing has to be on paper. It can also be an online directive. According to Schwab's website:
To change your default cost basis method, log in to your Schwab.com account and select your account icon in the upper right corner and select Account Settings. This brings up a page where you can change your cost basis method for each of your accounts.
That's dated Feb 9, 2024, so I assume it is current. This page conflates cost basis (average vs. actual) and selection method, so perhaps it will work, perhaps not.
I would wait to check tomorrow or day after your unrealized gains and losses information as cost basis information of your positions, especially the date when a position was opened, is screwed up. E.g., most of my long term gains are shown as short term gains because they used a different date of acquisition. I am told they are going to re-run and fix it overnight tonight.
@msf, If you have a Schwab account, you can post screen shots on how you were able to change online for mutual funds from their default average cost method.
(I had no problem changing online for stocks and ETF, except that the change is not immediately shown neither for me nor for the Representative, and I have to check overnight to make sure the online requested change for stocks and ETFs took effect.)
(BTW, I had all my lots (for both stocks and mutual funds) set at TD for highest cost or specific identification, where permitted. I am trying to replicate the same at Schwab.)
Thanks, @Graust. No trouble - just life. Trying to get on with it. I am posting here to share hoping to make each others' life efficient.
Yes, the Schwab website will take some getting used to, especially if you are coming from TD and never had any exposure to Schwab. Please post any issues you uncover after their re-run tonight. We may have to recheck everything again what we have already checked off today.
Good news is Schwab customer service has gotten a lot better since they acquired TD, though not yet as good as TD used to be.
Reiterating, "Unfortunately, the industry has done a good job of conflating two different concepts: cost basis and share (lot) selection."
Schwab makes total hash of this distinction in the page I quoted. Again reiterating: "This page conflates cost basis (average vs. actual) and selection method, so perhaps it will work, perhaps not."
As you reported, the instructions on that page apparently don't work even though that page includes "average" among its list of several cost basis methods to choose from. The others given are LIFO, FIFO, Low cost, High cost, Tax Lot Optimizer, and Specified lot.
Elsewhere, Schwab does make a stab at differentiating the two concepts (cost basis and selection method), using its own unique terminology:
There are two components of cost basis accounting at Schwab: the Cost Method and the Lot Selection Method.
The Cost Method determines how to calculate the cost of securities sold to determine gains and losses. 1) The Average Cost Method calculates the average price for shares bought and sold ... 2) The Identified Cost Method reflects the actual cost basis for each individual lot bought or sold. ...
The Lot Selection Method determines the order in which lots are selected.
That pdf includes the form you requested of Schwab: "Change the Cost Basis Accounting Method on My Schwab Brokerage Account". One doesn't have to log in to access it, and it appears in its own page (not a popup).
When I moved from TD to Schwab in 2020 after the merger was announced, it took a few days for my cost basis / history to populate, but it did. Same thing happened when I transferred that Schwab account into a new Schwab account last fall so I could (re)gain futures access. So just give it a little time during the chaos. (I had exported my TD records to Excel spreadsheet before I moved, just in case.)
For longer-term investors, I think Schwab's site is more useful than TD's -- you never could see your account history/performance @ TD, but you do at Schwab. They have had a few hiccups w/portfolio income reporting in recent weeks, but it seems to have worked out since.
Unfortunately ThinkDesktop's position reporting doesn't always match with the website, but I only use that for charting and options so I don't rely on the portfolio data -- and that was also a problem at TD, too.
On the whole, I'm satisfied w/Schwab. I've had a few enquiries disappear into the ether and their mobile app has a few quirks, but for the most part it's been a decent ride.
BTW for those who track and/or trade IPOs, Schwab isn't the best and rarely has them. Buf it you do want to play, when making your expression of interest always be sure to indicate it's a 'speculative' trade (even if you see it as a 'growth' think) or else their IPO nanny-state minders will deny your request. (It took a few tries, b/c their IPO nanny-state minders were rather coy about how to answer those questions when I was exploring the site back then.)
am interested in knowing if anyone retained their free access TD stock and fund analysis tools (e.g., NewConstructs,CreditSuisse...), plus added any new ones from schwab.
@msf, Thanks. I stopped refilling ink in my rarely used printer. Yesterday, I wanted to read the form but had the Rep read relevant parts back to me. Will rely on Schwab mail to arrive to set the mutual fund lot method. I bookmarked the thread in case I need to access the form later. I do not plan to buy any mutual funds at Schwab but will pick the method in case I buy there because of unavailability elsewhere.
Thanks for the info. The lot open date history in cost basis did not come through overnight, but as you suggested I will wait until next week to check on it.
I had my accounts at TD enrolled in securities lending. Like most things at TD this was also an online process. There is no indication Schwab has automatically enrolled me in their SL program and evidently, the Reps seem to have no way of confirming. For this program, Schwab has a specific department which one can call only until 4PM EST. From what I gather from a Rep at the local branch, at Schwab you can not enroll on your own and the SL program folks will invite you if securities in your account are in demand by borrowers. I am inclined to remove my margin privileges with the thought that Schwab should would not be able to lend my securities without sharing revenue with me.
Edit: I tracked down the SLP dashboard and it displays the following message for me, which I take it to mean I am not invited at Schwab: "You have no Securities Lending Fully Paid offers or details available for online review at this time."
I think that brokers can lend securities from margin a/c only when there is a margin loan balance. One can also ask to move some securities from the margin side to cash side. Try those before downgrading the margin a/c.
@rforno, I called the transition team to get an ETA on the lot history so I do not check before that date and was told there is no pending work on it (i.e., no ETA) as they are not aware of any issues. (I had to disclose to the Rep what I did for a living so he takes me seriously and who he needs to go talk to.)
One more thing to check - your dividend reinvestment selection.
In 2022 I had changed to reinvest for every position; I still had not turned that off at TD but Schwab changed mine to “No” for every position. I have to change for each position by a separate action at Schwab (at Schwab there is no account level selection we had in TD so you can then selectively change for specific positions). Strangely, Schwab sent an email today saying they transferred my dividend reinvestment selection, except where the record date was before but pay date was after migration; so, I checked my account to see which positions fell into this exception and noticed that Schwab had set all positions not to reinvest.
@rforno, I called the transition team to get an ETA on the lot history so I do not check before that date and was told there is no pending work on it (i.e., no ETA) as they are not aware of any issues. (I had to disclose to the Rep what I did for a living so he takes me seriously and who he needs to go talk to.)
Good luck! (avoiding this kind of drama was exactly why I fled TD the week after they announced the merger -- I've gone thru enough retail brokerage mergers over the years and knew what I was in for. Though I held off moving everything for a while until my TD guy's pre-merger review took place, since I liked him and didn't want to ding him with noticeable AUM leaving his book as merger-mania was sweeping the company)
@rforno, They have been migrating accounts in stages for more than a year and they had migrated employee accounts first. Since mine (and @graust) were one of the last accounts to move over, I thought Schwab would have figured out all issues by the time they got to us. I have gone through enough mega M&As for my work to have a sense for how the process should work and so am a bit surprised Schwab having issues this late in the game.
@rforno, They have been migrating accounts in stages for more than a year and they had migrated employee accounts first. Since mine (and @graust) were one of the last accounts to move over, I thought Schwab would have figured out all issues by the time they got to us. I have gone through enough mega M&As for my work to have a sense for how the process should work and so am a bit surprised Schwab having issues this late in the game.
Didn't know you worked for them -- yikes!
I think they (as probably others) hiccup with large-scale account conversions/transfers. Maybe their internal processes or technology has problems scaling up. Hope it gets sorted out for y'all soon enough!
I have no idea regarding the comparison of the TD vs Schwab web platforms. Like most things of this nature there's likely both good and bad to be said of either.
But I'm not particularly sympathetic about the complaints of "a 23-year-old client" who resents having to learn to adapt. Her opinion that Schwab should run two completely different trading platforms so she wouldn't have to learn something new really leave me pretty cold. Get used to reality, honey... that's life.
“Having to change login info for all the accounts I manage was unnecessary." she says. Poor baby!
Read the article and the complaints in there are garbage and the reporter is lazy, going for easy hits.
But the useful information in the article was that only 10% of the accounts were moved in the final batch this weekend. Schwab did not learn anything from moving 90% of the accounts prior to this or they did not care.
@rforno, I did not work for Schwab. In my work we had let people that worked on M&A integration go or re-assigned to mundane tasks outside M&A for repeating mistakes in M&A integration, depending how much of FU attitude they showed. The Schwab CEO should be held accountable for keep screwing up after doing this for a year. I always knew that financial industry is one of the slowest to adaptation and full of fat cats but this is beneath American work ethic and standards.
Two of my remaining active accounts (and a few dormant ones) migrated over the weekend and so far smooth as silk. Began placing trades first thing Monday morning. I received my checks for my taxable account as promised a few days before the transfer. I do not embrace change much but so far no trauma attached with this changeover. I had a dormant account move over last year and I transferred monies from TD to that account to familiarize myself with their platform. Also Schwab had access to more funds than what was available to me at TD. My only remaining concern is receiving my accumulated dividends from the funds held before the transfer.
I thoroughly enjoyed my years at TD Ameritrade (after they absorbed Scottrade) Can’t say there was ever a problem. A few observations. The private client service department at TD was heads above that of Schwab. The reps far more friendly and down home at TD. Fortunately most of the TD reps have migrated to Schwab too. Most annoying is at TD I could get a rep after one or two rings. At Schwab have to dance through more hoops. But what are my options. I had a couple problems when I was at Fidelity in years past and would never return there. E*trade doesn’t have the fund selections needed. And at least from what I read - like everywhere - Vanguard has had deteriorating customer service over the years.
Could you please elaborate what you meant by, "I received my checks for my taxable account as promised a few days before the transfer."
I have been a Schwab customer for more than 2 decades and held only mostly permanent positions there (limited trading) because I liked TD better but I am familiar with Schwab platform, and it turns out better than many Schwab Reps. As you said, TD before the Schwab acquisition was head and shoulders above any other brokerage I ever dealt with but I am not longing for the old TD as we need to move on and use what we got. My displeasure is with account migration issues that Schwab created.
>>>>>>Could you please elaborate what you meant by, "I received my checks for my taxable account as promised a few days before the transfer.”<<<<
Check writing privileges. Received checkbook/checks to write checks on my taxable account. I was almost sure this would be a problem but they arrived on time.
@Junkster - We have a checking account through the Schwab Bank in addition to our brokerage trust and individual IRA accounts. Are there other checking options available at Schwab? Thanks- OJ
@Junkster - We have a checking account through the Schwab Bank in addition to our brokerage trust and individual IRA accounts. Are there other checking options available at Schwab? Thanks- OJ
At TD I could write checks against what I had in cash in my taxable account. Schwab said similar check writing privileges would be available after the migration and sent me checks for my new taxable account there (Schwab One Account). Bank on the checks is the Bank of New York Mellon.
Comments
https://www.aboutschwab.com/schwab-statement-on-ameritrade-client-transition-timeline
Since then, I've kept it active with a tiny stock position and $1000 cash just so I have access to prior statements and moreso, to keep my access to ThinkDesktop, which is fan-frakking-tastic compared to Schwab's dinky browser-based 'active' trader platform.
When they tell me it's 'my turn' to be migrated, I'll transfer the rest over to Schwab and close the account, b/c I only need 1 Schwab account.
My accounts migrated over the weekend. For each IRA account that migrated, Schwab created an extra zero balance account at Schwab. So, there are too many accounts in my profile. Did anyone else experience this?
Schwab did not carryover my cost basis settings and defaulted stocks and ETFs to FIFO and mutual funds to average cost basis. Strangely, the cost basis settings at Schwab look very primitive relative to how they were at TD. I do not see a way to change online the cost basis for mutual funds. Called the rep and was told I have to submit a paper form (no electronic signature form) request to change the default method for mutual funds and once selected, I can not change the method at the time of the trade or otherwise, except through another paper form request. The Rep is mailing me the form which i can fill and upload into the message center. (I was not able to pull up the form online though i do not have a pop up blocker.)
Sorry to hear about those troubles! We also migrated over this last weekend, but I have not experienced anything like that. MAN, that app is so much clunkier than TD’s….you have different screens for current values and daily change, and cost basis. Ugh. And no real way to change the layout that I can say.
Between than and recently opening an account at Robinhood to get the 3% IRA match….got some awful investing apps to learn. Makes me feel old!!
I haven’t tried out the website yet; I’m hoping that’s a lot better.
"Fixed Income Amortization/Accretion
Per IRS requirements, Schwab defaults to the "On" setting for amortizing and accreting the cost basis on your fixed income positions.
Amortization applies to bonds bought at a premium (above par). The value of the bond is gradually adjusted downwards to par over the remaining life of the security.
Discount is accrued on bonds bought or issued at a discount (below par). The value of the bond is gradually adjusted upwards to par over the remaining life of the security."
I wanted to change the Schwab default so I do not include accretion until the bonds mature but that also required submitting a paper form (no electronic signature form).
As you guys check and find transfer issues that you had to fix, please post in this thread so the rest of us can check our transferred accounts to make sure there are no surprises later. Thanks.
There are only two cost basis methods: actual basis and average basis. Generally speaking, stocks must use actual basis. (There is an exception for some dividend reinvestment plans, but let's not go there.) FIFO is a way of selecting shares sold; it is not a cost basis method.
If shares are being tracked using average basis, then the oldest shares are automatically sold first (FIFO) - there is no choice. If shares are being tracked using actual cost, then there are a variety of methods to select which shares are sold. You can explicitly indicate which shares you are selling (up to the date of settlement), or you can let the broker select them for you using your chosen algorithm, such as FIFO, HIFO, tax optimization, etc.
In order to change to or from average basis for a mutual fund account holding covered shares, one must submit a change request in writing to the broker. (One cannot change from average cost on uncovered shares without IRS permission.)
https://fairmark.com/investment-taxation/capital-gain/selling-mutual-fund-shares/changing-cost-basis-methods/
Where the rep seems to have gone awry was in telling you that this writing has to be on paper. It can also be an online directive. According to Schwab's website: https://www.schwab.com/learn/story/save-on-taxes-know-your-cost-basis
That's dated Feb 9, 2024, so I assume it is current. This page conflates cost basis (average vs. actual) and selection method, so perhaps it will work, perhaps not.
(I had no problem changing online for stocks and ETF, except that the change is not immediately shown neither for me nor for the Representative, and I have to check overnight to make sure the online requested change for stocks and ETFs took effect.)
(BTW, I had all my lots (for both stocks and mutual funds) set at TD for highest cost or specific identification, where permitted. I am trying to replicate the same at Schwab.)
Yes, the Schwab website will take some getting used to, especially if you are coming from TD and never had any exposure to Schwab. Please post any issues you uncover after their re-run tonight. We may have to recheck everything again what we have already checked off today.
Good news is Schwab customer service has gotten a lot better since they acquired TD, though not yet as good as TD used to be.
Schwab makes total hash of this distinction in the page I quoted. Again reiterating: "This page conflates cost basis (average vs. actual) and selection method, so perhaps it will work, perhaps not."
As you reported, the instructions on that page apparently don't work even though that page includes "average" among its list of several cost basis methods to choose from. The others given are LIFO, FIFO, Low cost, High cost, Tax Lot Optimizer, and Specified lot.
Elsewhere, Schwab does make a stab at differentiating the two concepts (cost basis and selection method), using its own unique terminology: https://client.schwab.com/secure/file/P-4705302/APP105445-02-01-fill.pdf
That pdf includes the form you requested of Schwab: "Change the Cost Basis Accounting Method on My Schwab Brokerage Account". One doesn't have to log in to access it, and it appears in its own page (not a popup).
Here's Schwab's full 10 page cost basis disclosure statement, April 2024.
https://www.schwab.com/resource/cost-basis-disclosure-statement
For longer-term investors, I think Schwab's site is more useful than TD's -- you never could see your account history/performance @ TD, but you do at Schwab. They have had a few hiccups w/portfolio income reporting in recent weeks, but it seems to have worked out since.
Unfortunately ThinkDesktop's position reporting doesn't always match with the website, but I only use that for charting and options so I don't rely on the portfolio data -- and that was also a problem at TD, too.
On the whole, I'm satisfied w/Schwab. I've had a few enquiries disappear into the ether and their mobile app has a few quirks, but for the most part it's been a decent ride.
BTW for those who track and/or trade IPOs, Schwab isn't the best and rarely has them. Buf it you do want to play, when making your expression of interest always be sure to indicate it's a 'speculative' trade (even if you see it as a 'growth' think) or else their IPO nanny-state minders will deny your request. (It took a few tries, b/c their IPO nanny-state minders were rather coy about how to answer those questions when I was exploring the site back then.)
Thanks for the info. The lot open date history in cost basis did not come through overnight, but as you suggested I will wait until next week to check on it.
I had my accounts at TD enrolled in securities lending. Like most things at TD this was also an online process. There is no indication Schwab has automatically enrolled me in their SL program and evidently, the Reps seem to have no way of confirming. For this program, Schwab has a specific department which one can call only until 4PM EST. From what I gather from a Rep at the local branch, at Schwab you can not enroll on your own and the SL program folks will invite you if securities in your account are in demand by borrowers. I am inclined to remove my margin privileges with the thought that Schwab should would not be able to lend my securities without sharing revenue with me.
Edit: I tracked down the SLP dashboard and it displays the following message for me, which I take it to mean I am not invited at Schwab: "You have no Securities Lending Fully Paid offers or details available for online review at this time."
@rforno, I called the transition team to get an ETA on the lot history so I do not check before that date and was told there is no pending work on it (i.e., no ETA) as they are not aware of any issues. (I had to disclose to the Rep what I did for a living so he takes me seriously and who he needs to go talk to.)
In 2022 I had changed to reinvest for every position; I still had not turned that off at TD but Schwab changed mine to “No” for every position. I have to change for each position by a separate action at Schwab (at Schwab there is no account level selection we had in TD so you can then selectively change for specific positions). Strangely, Schwab sent an email today saying they transferred my dividend reinvestment selection, except where the record date was before but pay date was after migration; so, I checked my account to see which positions fell into this exception and noticed that Schwab had set all positions not to reinvest.
schwab.com/trendingtopics
https://client.schwab.com/secured/faqs/trending
I think they (as probably others) hiccup with large-scale account conversions/transfers. Maybe their internal processes or technology has problems scaling up. Hope it gets sorted out for y'all soon enough!
MarketWatch
Charles Schwab website ‘is a mess’: Hundreds of TD Ameritrade users complain about their new online home.
https://finance.yahoo.com/news/charles-schwab-website-mess-hundreds-193600024.html
But I'm not particularly sympathetic about the complaints of "a 23-year-old client" who resents having to learn to adapt. Her opinion that Schwab should run two completely different trading platforms so she wouldn't have to learn something new really leave me pretty cold. Get used to reality, honey... that's life.
“Having to change login info for all the accounts I manage was unnecessary." she says. Poor baby!
But the useful information in the article was that only 10% of the accounts were moved in the final batch this weekend. Schwab did not learn anything from moving 90% of the accounts prior to this or they did not care.
@rforno, I did not work for Schwab. In my work we had let people that worked on M&A integration go or re-assigned to mundane tasks outside M&A for repeating mistakes in M&A integration, depending how much of FU attitude they showed. The Schwab CEO should be held accountable for keep screwing up after doing this for a year. I always knew that financial industry is one of the slowest to adaptation and full of fat cats but this is beneath American work ethic and standards.
I thoroughly enjoyed my years at TD Ameritrade (after they absorbed Scottrade) Can’t say there was ever a problem. A few observations. The private client service department at TD was heads above that of Schwab. The reps far more friendly and down home at TD. Fortunately most of the TD reps have migrated to Schwab too. Most annoying is at TD I could get a rep after one or two rings. At Schwab have to dance through more hoops. But what are my options. I had a couple problems when I was at Fidelity in years past and would never return there. E*trade doesn’t have the fund selections needed. And at least from what I read - like everywhere - Vanguard has had deteriorating customer service over the years.
Could you please elaborate what you meant by, "I received my checks for my taxable account as promised a few days before the transfer."
I have been a Schwab customer for more than 2 decades and held only mostly permanent positions there (limited trading) because I liked TD better but I am familiar with Schwab platform, and it turns out better than many Schwab Reps. As you said, TD before the Schwab acquisition was head and shoulders above any other brokerage I ever dealt with but I am not longing for the old TD as we need to move on and use what we got. My displeasure is with account migration issues that Schwab created.