Backdoor to government Institutional MMFs at Fidelity

Comments

• BaluBalu

  November 5

  Thanks for the info. FSIXX is better than FDLXX by >20 bps.
  
  I am currently using FZDXX in my Fidelity IRA. Seems like I can pick up 4-5 basis points
  by buying FIGXX at Merrill and transferring to Fidelity. Can I do better?
• BaluBalu

  November 8 edited November 8

  I submitted an online application for Merrill CMA (taxable brokerage) by logging into my existing accounts (IRAs). After a week, when I called them, they said, the application is pending because “we are going to request additional documentation.” We need a copy of your ID, copy of your SS card, & proof of address (two bills). I already have a BoA bank account, safe deposit box, two credit cards, and the above IRAs and they want to verify my ID and address now?
  
  These guys have become worse than a Govt office.
  
  I did not ask for margin.
• Anna

  November 8 edited November 8

  @BaluBalu A few months ago, after having been a BoA customer since the 1980s, I finally had to visit the local BoA branch to get an account set up for Merrill Edge. And, yes, I have checking, savings, safety deposit, credit cards,.... I haven't made use of it yet.
• BaluBalu

  November 8

  I also try to buy an ETF (GRNY) today at Merrill which Merrill blocked as high risk. Unfortunately, the online message is a page long with various reasons including “not sufficient funds” for rejection. So, you are baffled. I called the CS and they told me it is blocked as high risk.
  
  Merrill is good for a very narrow set of reasons, incl the MM. That is why I only have long term holdings there. I saw there was small uninvested cash and thought I would buy the ETF. Otherwise, I would not bother with them.
  
  I was opening the CMA to buy Fidelity MM to transfer to Fidelity.
• davidrmoran

  November 8

  BoA / ML, by no means alone, has gotten very strict about the 'know your customer' thing, corporatewide mandate, due to insane global scamming and fraud.
  
  Rightly or wrongly.
  
  (This from a BoA IT SVP.)
• msf

  November 12

  A fly in the ointment: Two weeks after I transferred a small number of MMF shares from Merrill to Fidelity, Merrill pulled them back. Fortunately I had purchased additional shares at Fidelity so this did not close out my position there.
  
  Fidelity told me they were fine with the transfer in, they were fine with my purchasing additional shares, that it was Merrill undoing the original ACAT transfer.
  
  Merrill confirmed a rule of thumb on in-kind transfers: if a receiving institution (here, Fidelity) accepts shares being transferred, then a transfer will go through. However, upon checking the rep said Merrill does not allow the transferring of MMF shares into or out of Merrill.
  
  The rep is having Merrill check into whether this is just policy or some legal/contractual constraint. The bottom line is that I was lucky that Merrill let the shares transfer out initially. So I am set but this maneuver may not work for others.
  
  It also leaves me wondering: if this is a Merrill (or legal) rule, then why wasn't the initial transfer stopped automatically? And why did it take Merrill two weeks to discover the supposed transgression?
• BaluBalu

  November 12

  Thanks for the update @msf.
• Observant1

  November 12 edited November 13

  "It also leaves me wondering: if this is a Merrill (or legal) rule, then why wasn't the initial transfer stopped automatically? And why did it take Merrill two weeks to discover the supposed transgression?"
  
  Very good questions!
• FD1000

  November 13

  SNAXX pays 4.71% at Schwab. I know they are not equal.
  Wait, I have less than 1% in MM and I only concentrate on how to make money, which will make me a lot more than the difference between these funds.
• BaluBalu

  November 13

  Something that @msf had mentioned previously and it is worth noting for anyone thinking of opening an account at Merrill. In the IRAs, your mutual fund sell order has to settle first before you are able to use the proceeds to buy anything else. I do not have that restriction anywhere else.
  
  P.S.: probably a temporary glitch but I was not able to place a MM order in my Merrill account yesterday or today. After three tries, I called the CS rep who then had to connect me to a trading specialist who was able to place the buy order. If fact, I first did the online chat who told me they can not place the trade for me and that I need to call CS.
  At other brokerages I have I can call and be connected to the trader without having to go through a generic Rep first.
• davidrmoran

  November 13

  At Fidelity I myself have never been connected to a trader without going through a rep first.
• BaluBalu

  November 13 edited November 13

  davidrmoran said:

  At Fidelity I myself have never been connected to a trader without going through a rep first.

  I am surprised. I always seem to connect to a licensed broker who can place trades for me without having to pass me on to someone else. It so happened, I sold a mutual fund today and had to have the Rep place the buy order for me. (The same is not possible at Merrill, unless it is an exchange.)
  
  I shall let you know what happens next time at Fidelity.
  
  May be ask to convert your account to an ATP account (you can continue to use the web account.)
  
  
• davidrmoran

  November 14

  I may have had ATP for years, not sure and could well be wrong, and my trade frequency certainly has never hit it, but perhaps the criteria were different back when
• BaluBalu

  November 14

  David, My trade frequency is not much at Fidelity but I asked Fidelity to classify my account as an ATP account, even though it did not meet their traditional criteria for ATP classification and they obliged. (They do not want you to move to another brokerage!)
• Old_Joe

  November 14

  Not knowing what "ATP" was, I found this information from Fidelity. It may be useful for others also-

  Active Trader Pro is a dynamic trading platform that provides you with customizable tools to help you trade, track the market, see the latest financial news, monitor your portfolio, and more. You can customize your Active Trader Pro experience to adapt to a layout that works best for you.
  
  Active Trader Pro is automatically available to customers who trade 36 times or more in a rolling 12-month period. If you don't meet this criteria but would like to request access, please call Active Trader Services at 800-564-0211.