Ally Invest — nice cash bonus offer

[courtjustshan]

I moved into Merrill Edge recently. They do not advertise the higher amounts on the website, but there is a certain amount of negotiation that is possible. In my case, I was assigned a specific tranisition person, and they listened to my "ask" and got approval for it. I was able to negotiate the higher amount, but the caveat was that I had to leave the money there for 9 months to get the bonus.

Regarding time in market loss, I was very happy that I lost no time in market. The assets (including many corporate bonds) transferred over "in kind" without issue. I was expecting to be out a few days and was pleasantly surprised.

It is also correct that larger accounts get platinum preferred status, 60 trades a month forever for free for ETF's and equities. This does not cover mutual funds or bonds.

Been very happy with Edge so far.

 

[audreyh1]

Hmm... have to admit I'm kind of puzzled by these comments. Maybe I'm missing something here, so I'll try to explain my thinking a bit further.

Yes, it's only 0.25% when looked at as a percentage of total assets required, but the vast majority of those assets (in my case) consists of various stocks and mutual funds. Only a tiny portion is cash. I'm earning 0% on the stocks and MFs—aside from the dividends and cap gains distributions that I receive regardless of which brokerage I'm using—so I don't understand why 0.25% of $1 million is "too little". Too little compared to the zero I'm currently getting? Or too little relative to some other way to earn money on those assets? I'm not aware of any other basically risk-free way to quickly and painlessly earn $2,500 by passively leveraging the holdings in my brokerage account.

And with regard to the "a lot of work for too little gain" comment, I can't imagine a transfer-in-kind from my TD account to a new Ally Invest account would involve more than an hour or two of total time on my part, filling out a few forms and maybe chatting with someone from Ally for a short while. Is that really too much work for $2,500? Even if it were to take 3 hours, that's still over $800/hour! That's roughly 10 times what I recently charged a friend of a friend to do some I.T. consulting work.

One thing I'm not sure of in all this, though, is if there is any sort of fee that I'd be charged by TD or by Ally to execute a transfer-in-kind of assets to another brokerage. I believe Ally will compensate me for whatever TD charges, if anything, but I'd need to get all the details from both brokerages.

I’m retired.

I no longer look at my life in terms of how much I can earn an hour.

There have to be pretty strong reasons to introduce added complexity. It’s not just the initial work to transfer but additional tracking, tax reporting, etc.

 

[Sunset]

I’m retired.

I no longer look at my life in terms of how much I can earn an hour.

There have to be pretty strong reasons to introduce added complexity. It’s not just the initial work to transfer but additional tracking, tax reporting, etc.

If everything is transferred in kind, there is almost no extra work.

At tax time there is 1 additional brokerage statement for the year where both were involved.
As for tracking, if you look at your accounts once per month , there is no real additional work, just check before and a month later for the after.

Where I do see some work, is getting used to the new brokerage website, everything will be different and while everything is there, it's a pain to get used to it.

 

[MrLoco]

It’s still a tax headache moving accounts. I know it wouldn’t cost anything, but I’m trying to avoid new hassles in retirement.

This. Times 1000X. I would have to set up new broker agent authorization all over again. NEw forms. Notarized at the bank. 2 witnesses. Change all the current dividend payments from my taxable accounts to the bank to now come from the new brokerage. No thanks.
A headache.
And what will you do a year from now when XYZ bank offers $3,000 to switch all over again?



Also, a 2 week trip to Europe would cost you only $2,500


That would not even cover our airfare.

 

[audreyh1]

If everything is transferred in kind, there is almost no extra work.

At tax time there is 1 additional brokerage statement for the year where both were involved.
As for tracking, if you look at your accounts once per month , there is no real additional work, just check before and a month later for the after.

Where I do see some work, is getting used to the new brokerage website, everything will be different and while everything is there, it's a pain to get used to it.

Additional work: additional accounts in Quicken. Additional monthly statements - that’s 12 times a year, not 1. Additional downloads (hopefully) and reconciles at tax time.

Now I’ve got to rebalance across multiple brokerages? Or am I completely abandoning my well understood 20 year old Fidelity brokerage account for this new unknown?

Otherwise got to spend time figuring out what to move, and how to handle things with annual withdrawals and rebalancing. Not to mention how many surprises might pop up along the way or things go wonky with transfers.

OK - already reached my limit in terms of “figuring it out”.

If I were shopping for a new brokerage anyway it would be a different matter.

 

[Sojourner]

I would have to set up new broker agent authorization all over again. NEw forms. Notarized at the bank. 2 witnesses.

Really? I don't believe I've ever had to get anything notarized or have any witnesses in the past when I opened a new brokerage account. I'm pretty sure it can all be done electronically.

Also, a 2 week trip to Europe would cost you only $2,500 That would not even cover our airfare.

Yeah, that's a valid point. So maybe it's only enough for a 1 week trip to Europe, flying coach both ways. That doesn't fundamentally change the value proposition, though. It's still $2,500. That's roughly what I made in salary for an entire week's work before I semi-retired several years ago.

Additional work: additional accounts in Quicken. Additional monthly statements - that’s 12 times a year, not 1. Additional downloads (hopefully) and reconciles at tax time.

Now I’ve got to rebalance across multiple brokerages? Or am I completely abandoning my well understood 20 year old Fidelity brokerage account for this new unknown?

Otherwise got to spend time figuring out what to move, and how to handle things with annual withdrawals and rebalancing. Not to mention how many surprises might pop up along the way or things go wonky with transfers.

OK - already reached my limit in terms of “figuring it out”.

Sounds like our situations are fairly different, since you're concerned with things like monthly statements, re-balancing, and integration with Quicken, etc. All valid concerns, I'm sure, but not things that I would be worried about for myself.

Still, though, it does seem like the majority opinion here is that it's likely more of a hassle than it's worth, even if the bonus were more than $2,500. I suppose I'll continue to ponder it before making any moves.

 

[MrLoco]

Really? I don't believe I've ever had to get anything notarized or have any witnesses in the past when I opened a new brokerage account. I'm pretty sure it can all be done electronically.



No. I'm talking about granting someone else Power of Attorney in case I am incapacitated. So they can act on my brokerage accounts. Most brokerages have their own POA which they call "Agent authorization."



I found out after my wife and I set up dual POA's (both financial and for Healthcare,end of life,etc.) with a local attorney that the brokerage house has their own form which is linked usually to the state where they are headquartered. The POA's we currently have are OK for our local bank accounts and most anything within our state, but for the brokerage we had to use their form. And get it notarized. And witnessed. In duplicate. Just a PITA.

 

[gauss]

The brokers use ACATS for doing account transfers and the cost basis goes along with the securities.

Automated Customer Account Transfer Service (ACATS) | DTCC

Thanks - but this was not exactly what I had in my mind. I am sure that there exist industry tools that the brokerages have available to them to attempt to bring over basis info. Some of them may use it and it may sometimes work.

My concern was the loss of an actual IRS requirement upon the new brokerage house to actually track and report the basis.

-gauss

 

[RunningBum]

0.25% isn't much, but it seems to me that people will swap around $50K in CD/MM/Savings accounts to get that. Doing it on $1M makes it more significant.

OTOH, moving a significant part of your assets seems like a big deal. I wouldn't do it unless I was unhappy with my current broker and looking for a push to leave anyway. Then again, for a buy-and-hold investor maybe it's not that big. I'd have to convert my admiral funds to ETFs (which is not available for Primecap), but then they'd mostly just sit at a new place instead of VG. It almost seems like free money--unless something goes wrong. And I do occasionally sell part of my holdings for living expenses, and some of those are from way back, so tax reporting could get a little more complicated.

So I wouldn't think in terms of what % it is, but rather whether $2500 is a worthwhile incentive to move. Putting a % on it is misleading anyway. If you move $1.5M over you don't get .25%, you still get $2500, so now it's 0.167%.

 

[kite_rider]

I've been using promotional offers from E*Trade for years now and have been very impressed with them. Over the last couple of years I've collected well over $10,000 in 'free' money and am collecting more this year.

Here is the typical deal:

Deposit Amount Cash Credit

$25,000-$99,999 $200
$100,000-$249,990 $500
$250,000-$499,999 $1,000
$500,00-$999,999 $1,500
$1,000,000+ $2,500

As you can see; if you have $1M to move you are much better off moving it in 4 increments of $250K. $4K bonus vs $2.5K bonus.

For me, it all started out when I needed to rollover a 401K from MegaCorp due to a job change. E*Trade gave me a free iPad as a reward at the time and back then a free iPad was a really cool thing for me (they were just introduced). Since then I started moving bits and chunks of my regular portfolio as the rewards motivated me to do so. Note, occasionally they are much better than the table listed above.

Anyway, as your portfolio grows E*Trade will assign a human to you as sort of a customer service thing. These guys often want to help you 'manage' your assets, but you can decline these offers (which I have always done). I use this person to help with logistics or just basic grunt work and have been really impressed with his service. Examples are being charged annoying 'wire fee's to move a large chunk of cash or needing something like a new ATM card when I'm on the road; he will just solve the problem and it's a nice benefit.

Like many of you I also hate the headaches related to a x-fer. But these days there are few. I have stocks I bought a very long time ago and held them at a company called 'Regal Discount Securities'. That broker is long gone now and I've had to track my cost basis from that no matter where I put the stocks. The stocks were x-ferred to Options Xpress (with no free money bonus and all of the headache). Options Xpress was bought by Charles Schwab and so I was faced with another mandatory x-fer. This is when I made the shift to consolidate at E*Trade over time and with incentives. Sometimes you can not avoid the hassles of an x-fer, but in my experience E*Trade has been the best to work with. By the way, E*Trade lets you x-fer over the stocks (you don't have to sell them in case you were curious) and the mandatory IRS cost basis tracking that goes with more recent purchases follows those stocks around. So no additional work there.

Another thing to mention; you get the bonus for every account you work with. So I have a regular margin account, an IRA account, and a Roth account. My wife also has an IRA account and a Roth account which I manage. So each of these accounts collects these cash incentives. Also, each gets free trading and other benefits associated with these promotions. Schwab wanted me and my wife to sign and notarize a bunch of complicated paper docs to allow me to continue to manage my wife's accounts, where E*Trade did almost all of this online.

Sorry for the long post, but I have a lot of experience with this topic.

 

[Sojourner]

So I wouldn't think in terms of what % it is, but rather whether $2500 is a worthwhile incentive to move. Putting a % on it is misleading anyway. If you move $1.5M over you don't get .25%, you still get $2500, so now it's 0.167%.

This is basically how I was looking at it before I started this thread and and saw all the responses mentioning the meagerness of 0.25%.

From my perspective, $2,500 is a decent amount of money for simply moving some of my assets to a different brokerage, where they will just sit for months and months at a time, as they've always done. I might make 1 or 2 trades a year (and those would be free with Ally Invest as part of their bonus sign-up offer), so being handed $2,500 just for having the assets sit there seems pretty tempting. Yes, tax reporting would be slightly more complicated due to having an additional set of 1099-DIVs, etc., from the new brokerage. And re-setting up new bank info for money transfers would take a bit of time and effort... but not much. As for cost basis info, I downloaded a complete report of that from Scottrade a few years ago when I sold a portion of a mutual fund holding that had lots of reinvested dividends, so I'm fully covered there.

I don't know. It seems like a pretty easy way to earn a couple thousand bucks for someone like myself with a simple brokerage portfolio consisting of individual stocks and a handful of common MFs and ETFs. Of course I wouldn't realize the entire $2,500 due to the tax hit, but it would still be around $2,000 after tax, and that's enough to pay my satellite TV and Netflix bills for nearly 2 years.

 

[kite_rider]

I don't know. It seems like a pretty easy way to earn a couple thousand bucks for someone like myself with a simple brokerage portfolio consisting of individual stocks and a handful of common MFs and ETFs. Of course I wouldn't realize the entire $2,500 due to the tax hit, but it would still be around $2,000 after tax, and that's enough to pay my satellite TV and Netflix bills for nearly 2 years.

I see it the same way. FWIW, E*Trade never has 1099'd me on the bonus money. So yes you are supposed to report it, but you should also report the 'cash back' bonus from your credit card too I guess...

 

[audreyh1]

I see it the same way. FWIW, E*Trade never has 1099'd me on the bonus money. So yes you are supposed to report it, but you should also report the 'cash back' bonus from your credit card too I guess...

No, not the same. The bank and brokerage bonuses are considered income, so they issue 1099s. The credit card discounts not. That’s why the credit cards don’t issue 1099s.

I don’t know why ETrade did not issue you a 1099.

 

[Montecfo]

I've been using promotional offers from E*Trade for years now and have been very impressed with them. Over the last couple of years I've collected well over $10,000 in 'free' money and am collecting more this year.

Here is the typical deal:

Deposit Amount Cash Credit

$25,000-$99,999 $200
$100,000-$249,990 $500
$250,000-$499,999 $1,000
$500,00-$999,999 $1,500
$1,000,000+ $2,500

As you can see; if you have $1M to move you are much better off moving it in 4 increments of $250K. $4K bonus vs $2.5K bonus.

For me, it all started out when I needed to rollover a 401K from MegaCorp due to a job change. E*Trade gave me a free iPad as a reward at the time and back then a free iPad was a really cool thing for me (they were just introduced). Since then I started moving bits and chunks of my regular portfolio as the rewards motivated me to do so. Note, occasionally they are much better than the table listed above.

Anyway, as your portfolio grows E*Trade will assign a human to you as sort of a customer service thing. These guys often want to help you 'manage' your assets, but you can decline these offers (which I have always done). I use this person to help with logistics or just basic grunt work and have been really impressed with his service. Examples are being charged annoying 'wire fee's to move a large chunk of cash or needing something like a new ATM card when I'm on the road; he will just solve the problem and it's a nice benefit.

Like many of you I also hate the headaches related to a x-fer. But these days there are few. I have stocks I bought a very long time ago and held them at a company called 'Regal Discount Securities'. That broker is long gone now and I've had to track my cost basis from that no matter where I put the stocks. The stocks were x-ferred to Options Xpress (with no free money bonus and all of the headache). Options Xpress was bought by Charles Schwab and so I was faced with another mandatory x-fer. This is when I made the shift to consolidate at E*Trade over time and with incentives. Sometimes you can not avoid the hassles of an x-fer, but in my experience E*Trade has been the best to work with. By the way, E*Trade lets you x-fer over the stocks (you don't have to sell them in case you were curious) and the mandatory IRS cost basis tracking that goes with more recent purchases follows those stocks around. So no additional work there.

Another thing to mention; you get the bonus for every account you work with. So I have a regular margin account, an IRA account, and a Roth account. My wife also has an IRA account and a Roth account which I manage. So each of these accounts collects these cash incentives. Also, each gets free trading and other benefits associated with these promotions. Schwab wanted me and my wife to sign and notarize a bunch of complicated paper docs to allow me to continue to manage my wife's accounts, where E*Trade did almost all of this online.

Sorry for the long post, but I have a lot of experience with this topic.

+1

Also with Etrade and I do same as I have consolidated there. When I move my 401k I may just piecemeal it. Right now I am moving small taxable chunks in to buy brokered CDs. Easier to deal with there as they roll off.