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Rarely use chat. Too easy to bump the ipad’s screen and have everything disappear. Plus - typing fast I make a lot of embarrassing mistakes. True, you can take screen shots and have a record. Fido has an issue where you get a pop-up when you sell a fund saying “If you think you may be entitled to a fee wavier, cancel this transaction and call (this number).” I’ve pretty much learned to ignore it. But when selling from several different funds to raise cash recently the message kept coming up - 5 times as I recall. So I called. Longest hold ever at Fido. 10-15 minutes. Finally a guy picked up and said I was good to sell (without any fees) and that the message simply means “exercise due diligence.” Obviously, that’s not what it says.
Fido has an issue where you get a pop-up when you sell a fund saying “If you think you may be entitled to a fee wavier
I don't consider this as 'bad; but that the company trying to be helpful, no?.
Umm. Yes. I guess. Their online trading platform directs you to call and confirm what you already know. Like I said, if selling from 1 or 2 funds I’ve learned to ignore it. You can easily pull up your history and see if you owe an early redemption fee. In this case, I pulled from 5 different funds and was reluctant not to follow the instructions. I didn’t feel when I called, however, that they really wanted me to call. I thought they seemed a bit irked that I called re such a mundane issue. But - I might be wrong on that.
Maybe when they get AI, their online system will know whether or not a sale will incur a fee and they won’t need to waste your time and theirs calling every time you sell a fund.
Schwab: I've been a customer for over 20 years. I can talk to a rep and explain exactly what I want and get an answer very quickly. Using a chat is much longer and annoying. Using email it's longer too, it depends on who I use. My local rep is excellent. 1) One time they messed up my bond fund distributions. I called a rep and felt I didn't get the right answer. I asked to talk with the mutual fund back office. This time, I was sure I would get it cleared up and it was within 2 hours. 2) Try to get Ins shares purchase waived, your chances are low. 3) Try to get a match to other brokers on bringing money while it's not on the site. 4) There are more but you got my drift.
While Schwab and Fidelity are great and better than other brokers, other businesses' chat is even worse. I've been a T-Mobile customer for about 25 years. I've got so many real free phones, especially when my kids were in college and somehow lost/damaged their phone and T-Mobile sent it directly to them. I got several free boosters in dead spots, and now it is less of a problem. In the last several years, I call customer service after 10 PM because I get reps from the Philippines and they give me more stuff compared to the American reps.
Penfed credit card gives you the same 2% cash back as Fidelity but Fidelity CC service is a lot worse and why I changed. Last year a rental company in the Netherlands charged a lot more than promised. They sent me the bill several days later. When I asked for a breakdown, I never got an answer. I filed a dispute with Penfed online, but it was denied within hours. I called in and found out none of the reasons matched my case, a new dispute had to be filed and followed by the rep. This time the dispute worked.
The lessons are 1) Chat is pretty good for solving trivial problems, but I hardly ever have them since you can find this stuff on the site. Try to solve real problems or get some freebies and chat is useless. 2) Ask for the moon and you will be surprised, humor helps too.
Schwab chat is a thing I use more than the phone: no stoopid 16-question identity routine. Usually, the chat reps are helpful. But sometimes, they have given me the WRONG information. They hire chat-workers who are learning as they go. Your questions and issues are the tools they use to learn by. Stinky poopy. The same, everywhere.
I don't get the wrong answer because a live person knows the answer or not, and if they don't they ask or transfer me to someone who knows...and the time is much shorter too. I usually get to a rep within 1-2 minutes. And if you know how to work the phone system, chances you will get to an expert directly. Words I used before that got me to an expert were: trader, margin call, and mutual fund desk. So, you can drive directly for 10 minutes or use a longer way and get there in 20 minutes, and maybe get lost and it takes you 30 minutes.
@msf said, ”Regarding Fidelity cash management - it will shortly be adding SPAXX (current SEC yield is 4.97%) as a core account option to its CMA account. Currently you're limited to a bank sweep paying 2.69% APR (2.72% APY)”. Elsewhere, @msf provided a link to Fido’s announcement. Effective date appears to be today, June 15.
Anybody know if the existing paper checks for the cash management account will need to be reissued? Or will the same ones continue work even after we change the CMA default investment to SPAXX?
FWIW - I write about 5 a year. Typically reserved for very large expenditures.
It shouldn't make any difference. The checks are actually processed through UMB Bank, which taps whatever the core account is for the cash needed. You're not writing checks directly against the core account, whatever that is.
Click on the "Cash" link in your CMA account (positions page); you'll see a Change Core Position button appear. Unfortunately, clicking on that pops up a page that still reads: "There are no new core positions to select."
FWIW, here's the announcement as it appears on March Fidelity statements:
Please note that on or around June 15, 2024, you'll have the option to elect Fidelity(R) Government Money Market Fund (SPAXX) as your core sweep investment vehicle. You will not need to take any action if you wish to retain the Bank Sweep as your core position. For additional information on your core position options, including the current yields on the Bank Sweep and money market funds, please visit Fidelity.com/spend-save/fidelity-cash-management-account/overview and FundResearch.Fidelity.com/mutual-funds/summary/31617H102.
Finally - Today I was able to switch my CM account at Fido to the new option, SPAXX, that @msf highlighted in his earlier comments When it wouldn’t work earlier this week I moved a bunch from CM over to my TOD account (into SPAXX)) to take advantage of the compelling higher rates,
What could possibly go wrong? I rely on Fido’s portfolio analyzer for a rough approximation of how I’m positioned across major asset classes. The TOD account contains one mutual fund and is is considered part of the invested portfolio. So moving a substantial chunk of cash from CM into TOD threw the analysis out of whack - rendered it near useless. So it was with pleasure this morning to finally get SPAXX as an option in CM and to move that chunk of cash back where it belongs.
Technically - When you initiate the change, they do offer up a proviso that it will take them 24-hours to update the CM account to the new SPAXX core position. No sweat. I can wait.
Finally - Today I was able to switch my CM account at Fido to the new option, SPAXX ... What could possibly go wrong?
Under "activities" you should see interest from the old bank sweep accounts for June. This money (like all cash proceeds) is automatically dumped into your core account (now SPAXX). "Activities" should also report an explicit reinvestment of SPAXX divs into that fund.
Starting next month, no more interest payments, just MMF divs that get reinvested.
More than 90% of my portfolio is with Schwab but I would happily switch to Fido if my RIA supported Fidelity
Schwab lacking auto-sweep into a MMF and Schwab MMF settling T+1 vs. Fido MMF same day can get pretty expensive pretty fast if one is not aggressive in managing idle funds sitting in cash.
I never had a problem with Schwab MM and I'm a trader. I always trade funds/MM on the same date, just make it a habit. MM is just another fund for me. I have had both Fidelity and Schwab for over 20 years.
Having recently (re)opened a Schwab account, I have a different set of observations vis-a-vis Fidelity. While my first impressions of Schwab below are largely negative, keep in mind (as I do) that using a new site is a learning experience and that I'm inclined to look first for things I know I can do at Fidelity as opposed to looking for new things.
Changing default fund cost basis from average cost to actual cost (mutual funds): - Schwab requires paper form - Fidelity allows change online
Power of attorney form filled in office: - Schwab requires me to go to third party for notarization - Fidelity will notarize on the spot
New issue treasuries, expected (indicative) yields - Schwab does not provide - Fixed income desk suggested looking at recent trades - Fidelity and Vanguard give ballpark figures (actual yields not known until auction)
Trading mutual funds, fixed income with desktop application: - Fidelity Active Trader Pro supports - Schwab ThinkOrSwim does not support these trades (per webpage, link below; I haven't downloaded and tested) https://www.schwab.com/trading/thinkorswim/compare-platforms
Fixed income pricing ($1/bond): - Schwab has $10 min commission - Fidelity has $1 min commission
Fixed income quotes
- Schwab quotes prices including markup (it seems), so yields are "true" - Fidelity quoted prices are before markups - shown only on trade page - so yields appear higher, but are actually the same
- Schwab does not show YTW figures for all bonds, effectively forcing sort on YTM - Fidelity facilitates sorting on YTW
- Depth of book presentations are similar (pop up windows)
- Fidelity opens new tab for trade, leaving bond search window intact - Schwab uses existing tab for trade and "back to search" button resets search instead of restoring existing search
Mutual fund research - sites are comparable, basic stuff and docs; neither offers M* reports. Schwab used to provide M* reports years ago.
If you're a trader in stocks, Schwab may be superior as OP stated. For my interests (largely OEFs and bonds, some ETFs), so far Schwab isn't impressing. Though that could be due to lack of familiarity.
Update: I decided to stick with Schwab for the forseeable future.
Having poked around Fido in recent weeks, there are some things that they certainly does better than Schwab (cash management, UST rollovers, DRIP of foreign dividends) but I was not impressed by Active Trader and the available research. Of course, if I experience any major issues w/Schwab, having an existing (albeit unfunded) account @ Fido would facilitate a smoother and more prompt transition.
Having tried Treasury auto-rolls at both Fido and Schwab, IMO, Fido does it better.
Fido coordinates it with maturing Treasury & roll occurs on the same says as maturing Treasury. Auto roll can be canceled online once triggered but before the next auction date (it can be canceled by phone anytime).
Schwab first gets the money in hand and then proceeds with the roll. So, there is possible delay of 1 week or more (depending on the next auction date).
@msf, all those and more limitations of Schwab are real and I had alluded to them in various posts. Great listing in your post - I am going to save it for future reference lest I forget as I have a short memory for pain. Some of these limitations are acknowledged by Schwab Reps. All are acknowledged by TD Reps that moved from TD to Schwab - some of these guys actually said status quo is not acceptable. The biggest BS Schwab does is surrounding cash friction.
Even though Schwab Reps called me more than once increasing the bonus offers, I had to politely decline. Schwab creates enough friction for me that they do not deserve more of my assets. They got lucky with my TD assets moving over to them; I am thinking of pulling one of the accounts (not much stock trading in it) over to Fido.
I dabble in all asset classes and all investment vehicles, except interval funds.
Apparently as the Schwab-TDA merger took shape, the company tried to walk the line between "not upsetting their existing customers" (mainly 'stodgy' B&H types) when trying to integrate a more active type of investor/trader from TDA ... my sense is that they erred on the side of caution to respect their existing asset base and didn't want to upset their more conservative investors with dramatic changes. So as a result, many TDA migrants are upset w/the Schwab experience.
That said, cash management issue at Schwab is just 100% customer-unfriendly and inexcusable, and adds an extra step/more friction to doing things, and their failure to allow DRIP of Canadian stocks is just annoying.
Speaking of idle cash, in 2023 Schwab made 50% of their revenue from interest on uninvested cash 25% from asset management (incl Schwab ETFs) 17% from trading (commissions and PFOF).
" in 2023 Schwab made 50% of their revenue from interest on uninvested cash"
Stop right there. No need to say anything more. If anyone thinks that any business can give up 50% of their revenue from one source without compensating by redistributing that 50% income over other types of charges then I suggest that they are living in some sort of alternative capitalism than I am.
Yes, I surely hate the constant game-playing to keep cash earning a decent income for me rather than Schwab. But before we get too excited over that let's talk about exactly how Schwab will make their money if they give up 50% of their income.
I am guessing all or most of that revenue from uninvested cash goes straight to the bottom line.
If there is no such thing as uninvested cash at Fidelity and Schwab relies on uninvested cash for 50% of revenue, Schwab must suck at almost everything else. Now that we are close to 2 months since TD integration, I am waiting to learn about lay offs at Schwab. Their customer service level is inferior to that of Fidelity, even with massive improvement after TD acquisition. With lay offs, it will only get worse.
"I am guessing all or most of that revenue from uninvested cash goes straight to the bottom line."
Well, let's think about that for a minute. If that's true, then: • Schwab's "bottom line" must be impressively better than it's competitors. or maybe... • Schwab's operating efficiency is much worse than it's competitors, so their bottom line is roughly equivalent to their competitors.
Or maybe Schwab's operating efficiency is roughly similar to their competitors, and their competitors are simply making their money by other means... miscellaneous charges to customers in other parts of their operating empires.
I really don't care for simplistic assumptions. If Schwab's profit margin is drastically different from their competitors I'd certainly want to see the details, before just assuming that they are milking their customers for significantly more than other brokerages.
" in 2023 Schwab made 50% of their revenue from interest on uninvested cash"
@rforno, @Old_Joe, I don't find anywhere where the interest from uninvested cash is 50% of their revenue. I do find this, below, that lays out where the 50%+ interest income is coming from, but interest income comes from many sources.
Charles Schwab makes more than half of its money from interest earning assets like margin loans, investment securities, and bank loans.
According to page 146 of Schwab’s latest 10-K Form, they brought in roughly $6.5 billion of revenue from interest. The breakdown of interest earning assets and revenue are as follows:
Available for sale securities: $4.5 billion Receivables from brokerage clients: $848 million Bank loans: $545 million Securities lending revenue: $334 million Cash and investments segregated: $141 million Cash and cash equivalents: $120 million
The order of how Schwab makes it's money.
#1. Interest Revenue (From Interest Earning Assets) #2. Asset Management And Administration Fees #3. Trading Revenue #4. Bank Deposit Account Fees #5. Other Revenue
Edit: Just a bet, but I'm guessing this model is very similar to a Fidelty or other major brokerage model, just a tweak in each of the revenue streams.
The definition of Net Interest Revenue is right below the chart: "Schwab’s primary interest-earning assets include cash and cash equivalents; cash and investments segregated; margin loans,which constitute the majority of receivables from brokerage clients; investment securities; and bank loans. "
... ok, so maybe not 50% is ALL from uninvested client cash (poor wording on my part, sorry) but the general consensus in the community is that by not paying interest on those funds Schwab, like many other banks, reaps a huge source of easy income / cost savings.
Seems to me that is the investors fault . I don't see Chuck with a mask & "gun" pointed at there clients. BMO here in town is the same way. I had to open checking account so I could reap (2.2) % ? in Money market account.. I try hard to move cash out of MM as soon as possible. Maybe it's time to move on from BMO.
@rforno, I agree. The way they handle cash accounts is revenue for them, not us. That is the main reason, among others, that I sold out of my Intelligent Portfolio robo account. They hold 12% of assets in cash in a robo, which makes nothing for the client.
The cash account is a money maker for them, but I do believe if they increased interest earned on that cash, like Fidelity, they would increase some other revenue stream to compensate. No different from Fidelity or any other brokerage.
Net Interest Revenue, " margin loans,which constitute the majority of receivables from brokerage clients" I thought everyone was upset by what they pay on cash. Margin loads, I don't use it , do you ?
Comments
Maybe when they get AI, their online system will know whether or not a sale will incur a fee and they won’t need to waste your time and theirs calling every time you sell a fund.
Using email it's longer too, it depends on who I use. My local rep is excellent.
1) One time they messed up my bond fund distributions. I called a rep and felt I didn't get the right answer. I asked to talk with the mutual fund back office. This time, I was sure I would get it cleared up and it was within 2 hours.
2) Try to get Ins shares purchase waived, your chances are low.
3) Try to get a match to other brokers on bringing money while it's not on the site.
4) There are more but you got my drift.
While Schwab and Fidelity are great and better than other brokers, other businesses' chat is even worse.
I've been a T-Mobile customer for about 25 years. I've got so many real free phones, especially when my kids were in college and somehow lost/damaged their phone and T-Mobile sent it directly to them. I got several free boosters in dead spots, and now it is less of a problem. In the last several years, I call customer service after 10 PM because I get reps from the Philippines and they give me more stuff compared to the American reps.
Penfed credit card gives you the same 2% cash back as Fidelity but Fidelity CC service is a lot worse and why I changed. Last year a rental company in the Netherlands charged a lot more than promised. They sent me the bill several days later. When I asked for a breakdown, I never got an answer. I filed a dispute with Penfed online, but it was denied within hours. I called in and found out none of the reasons matched my case, a new dispute had to be filed and followed by the rep. This time the dispute worked.
The lessons are
1) Chat is pretty good for solving trivial problems, but I hardly ever have them since you can find this stuff on the site. Try to solve real problems or get some freebies and chat is useless.
2) Ask for the moon and you will be surprised, humor helps too.
I usually get to a rep within 1-2 minutes.
And if you know how to work the phone system, chances you will get to an expert directly.
Words I used before that got me to an expert were: trader, margin call, and mutual fund desk.
So, you can drive directly for 10 minutes or use a longer way and get there in 20 minutes, and maybe get lost and it takes you 30 minutes.
The reps are extremely nice and want to help you.
Anybody know if the existing paper checks for the cash management account will need to be reissued? Or will the same ones continue work even after we change the CMA default investment to SPAXX?
FWIW - I write about 5 a year. Typically reserved for very large expenditures.
Well, not as of 10:15AM EDT. I tried.
Click on the "Cash" link in your CMA account (positions page); you'll see a Change Core Position button appear. Unfortunately, clicking on that pops up a page that still reads: "There are no new core positions to select."
FWIW, here's the announcement as it appears on March Fidelity statements:
What could possibly go wrong? I rely on Fido’s portfolio analyzer for a rough approximation of how I’m positioned across major asset classes. The TOD account contains one mutual fund and is is considered part of the invested portfolio. So moving a substantial chunk of cash from CM into TOD threw the analysis out of whack - rendered it near useless. So it was with pleasure this morning to finally get SPAXX as an option in CM and to move that chunk of cash back where it belongs.
Technically - When you initiate the change, they do offer up a proviso that it will take them 24-hours to update the CM account to the new SPAXX core position. No sweat. I can wait.
Under "activities" you should see interest from the old bank sweep accounts for June. This money (like all cash proceeds) is automatically dumped into your core account (now SPAXX). "Activities" should also report an explicit reinvestment of SPAXX divs into that fund.
Starting next month, no more interest payments, just MMF divs that get reinvested.
Schwab lacking auto-sweep into a MMF and Schwab MMF settling T+1 vs. Fido MMF same day can get pretty expensive pretty fast if one is not aggressive in managing idle funds sitting in cash.
Schwab reps definitely more friendly than Fido.
Changing default fund cost basis from average cost to actual cost (mutual funds):
- Schwab requires paper form
- Fidelity allows change online
Power of attorney form filled in office:
- Schwab requires me to go to third party for notarization
- Fidelity will notarize on the spot
New issue treasuries, expected (indicative) yields
- Schwab does not provide - Fixed income desk suggested looking at recent trades
- Fidelity and Vanguard give ballpark figures (actual yields not known until auction)
Trading mutual funds, fixed income with desktop application:
- Fidelity Active Trader Pro supports
- Schwab ThinkOrSwim does not support these trades (per webpage, link below; I haven't downloaded and tested)
https://www.schwab.com/trading/thinkorswim/compare-platforms
Fixed income pricing ($1/bond):
- Schwab has $10 min commission
- Fidelity has $1 min commission
Fixed income quotes
- Schwab quotes prices including markup (it seems), so yields are "true"
- Fidelity quoted prices are before markups - shown only on trade page - so yields appear higher, but are actually the same
- Schwab does not show YTW figures for all bonds, effectively forcing sort on YTM
- Fidelity facilitates sorting on YTW
- Depth of book presentations are similar (pop up windows)
- Fidelity opens new tab for trade, leaving bond search window intact
- Schwab uses existing tab for trade and "back to search" button resets search instead of restoring existing search
Mutual fund research - sites are comparable, basic stuff and docs; neither offers M* reports. Schwab used to provide M* reports years ago.
If you're a trader in stocks, Schwab may be superior as OP stated. For my interests (largely OEFs and bonds, some ETFs), so far Schwab isn't impressing. Though that could be due to lack of familiarity.
Having poked around Fido in recent weeks, there are some things that they certainly does better than Schwab (cash management, UST rollovers, DRIP of foreign dividends) but I was not impressed by Active Trader and the available research. Of course, if I experience any major issues w/Schwab, having an existing (albeit unfunded) account @ Fido would facilitate a smoother and more prompt transition.
Fido coordinates it with maturing Treasury & roll occurs on the same says as maturing Treasury. Auto roll can be canceled online once triggered but before the next auction date (it can be canceled by phone anytime).
Schwab first gets the money in hand and then proceeds with the roll. So, there is possible delay of 1 week or more (depending on the next auction date).
Even though Schwab Reps called me more than once increasing the bonus offers, I had to politely decline. Schwab creates enough friction for me that they do not deserve more of my assets. They got lucky with my TD assets moving over to them; I am thinking of pulling one of the accounts (not much stock trading in it) over to Fido.
I dabble in all asset classes and all investment vehicles, except interval funds.
That said, cash management issue at Schwab is just 100% customer-unfriendly and inexcusable, and adds an extra step/more friction to doing things, and their failure to allow DRIP of Canadian stocks is just annoying.
Speaking of idle cash, in 2023 Schwab made 50% of their revenue from interest on uninvested cash 25% from asset management (incl Schwab ETFs) 17% from trading (commissions and PFOF).
Stop right there. No need to say anything more. If anyone thinks that any business can give up 50% of their revenue from one source without compensating by redistributing that 50% income over other types of charges then I suggest that they are living in some sort of alternative capitalism than I am.
Yes, I surely hate the constant game-playing to keep cash earning a decent income for me rather than Schwab. But before we get too excited over that let's talk about exactly how Schwab will make their money if they give up 50% of their income.
Free lunch, anyone?
If there is no such thing as uninvested cash at Fidelity and Schwab relies on uninvested cash for 50% of revenue, Schwab must suck at almost everything else. Now that we are close to 2 months since TD integration, I am waiting to learn about lay offs at Schwab. Their customer service level is inferior to that of Fidelity, even with massive improvement after TD acquisition. With lay offs, it will only get worse.
Well, let's think about that for a minute. If that's true, then:
• Schwab's "bottom line" must be impressively better than it's competitors. or maybe...
• Schwab's operating efficiency is much worse than it's competitors, so their bottom line is roughly equivalent to their competitors.
Or maybe Schwab's operating efficiency is roughly similar to their competitors, and their competitors are simply making their money by other means... miscellaneous charges to customers in other parts of their operating empires.
I really don't care for simplistic assumptions. If Schwab's profit margin is drastically different from their competitors I'd certainly want to see the details, before just assuming that they are milking their customers for significantly more than other brokerages.
https://custommapposter.com/article/how-charles-schwab-makes-money-11-7b-in-revenue-business-model/1781
https://content.schwab.com/web/retail/public/about-schwab/SEC_Form10k_2023.pdf
The definition of Net Interest Revenue is right below the chart:
"Schwab’s primary interest-earning assets include cash and cash equivalents; cash and investments segregated; margin loans,which constitute the majority of receivables from brokerage clients; investment securities; and bank loans. "
... ok, so maybe not 50% is ALL from uninvested client cash (poor wording on my part, sorry) but the general consensus in the community is that by not paying interest on those funds Schwab, like many other banks, reaps a huge source of easy income / cost savings.
The cash account is a money maker for them, but I do believe if they increased interest earned on that cash, like Fidelity, they would increase some other revenue stream to compensate. No different from Fidelity or any other brokerage.