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Re: Eggs in one basket?
Old 03-18-2007, 11:35 AM   #21
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Re: Eggs in one basket?

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Originally Posted by 3 Yrs to Go
I'm toying with the idea of directing all future contributions to Fidelity to dilute my Vanguard concentration further.
It'll be interesting to read your observations on their respective customer services...
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Re: Eggs in one basket?
Old 03-18-2007, 01:15 PM   #22
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Re: Eggs in one basket?

The way I look at it, if anyone were to find a way of cashing out my stocks and funds without my permission, that would be an illegal act and I could sue the brokerage to be made whole. The burden of proof is on the brokerage to prove that I authorized the disbursements, and since I didn't authorize them, it's a fairly open and shut case.

Imagine some hacker in Albania installs spyware on my PC and gets my account login. He liquidates my account, which would be annoying, but I still am okay. I call up my brokerage and say I didn't authorize this liquidation. They either make it right, or I sue and they make it right. Either way I'm not out my full nest egg.

As far as the brokerage itself going under, again that is not a problem. The brokerage doesn't own my equities, I do. They can't raid my account any more than they could come into my home and cart off my possessions.

These regulatory protections are a large reason I don't do international investing. This is one area where the USA really is ahead.
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Re: Eggs in one basket?
Old 03-18-2007, 01:46 PM   #23
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Re: Eggs in one basket?

Quote:
Originally Posted by free4now
The way I look at it, if anyone were to find a way of cashing out my stocks and funds without my permission, that would be an illegal act and I could sue the brokerage to be made whole. The burden of proof is on the brokerage to prove that I authorized the disbursements, and since I didn't authorize them, it's a fairly open and shut case.
Are you sure this is how it works? I'm not saying that it doesn't, but I don't think there is a lot of case law about this topic. And I'm pretty sure that no existing laws specifically cover electronic theft from brokerages the way they do for ATMs and credit cards. Do you know of any instances where victims were successful in winning restitution from brokers in such cases?
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Re: Eggs in one basket?
Old 03-18-2007, 03:03 PM   #24
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Re: Eggs in one basket?

Quote:
Originally Posted by free4now
The way I look at it, if anyone were to find a way of cashing out my stocks and funds without my permission, that would be an illegal act and I could sue the brokerage to be made whole.
I believe that you signed away your right to sue a brokerage, instead you agreed to binding arbitration. On the other hand, the arbitrator would probably agree with you if the brokeage let it get that far. In past cases, they have immediately settled to avoid any bad publicity.
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Re: Eggs in one basket?
Old 03-18-2007, 04:39 PM   #25
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Re: Eggs in one basket?

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Originally Posted by bssc
I believe that you signed away your right to sue a brokerage, instead you agreed to binding arbitration. On the other hand, the arbitrator would probably agree with you if the brokeage let it get that far. In past cases, they have immediately settled to avoid any bad publicity.
bssc is correct...you signed away your right to sue Vanguard or any other mutual fund or brokerage company. Your only recourse is to file a demand for arbitration, and your case is then decided by someone from the brokerage industry, and if they rule against you, you have no right to appeal.

And it would not be an open and shut case either, you would have to prove that you did nothing to contribute to the theft, ie, you used a strong password, you didn't use the same login or password as any other site, you used anti-spyware software which was updated regularly, you checked your account regularly, you didn't login from any public computer, you changed your password regularly, you didn't share it with anyone else, etc. If you failed to do even one of these things, you may be found at fault for contributing to the loss.
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Re: Eggs in one basket?
Old 03-18-2007, 08:18 PM   #26
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Re: Eggs in one basket?

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Originally Posted by Nords
It'll be interesting to read your observations on their respective customer services...
Thus far, its Vanguard 1 and Fidelity 0. I'm not a high maintenance customer and I don't consume a lot of "customer service" but I've never once had an issue, or have been disappointed, with Vanguard. We did have a tough time rolling over a 401(k) into a non-brokerage IRA at Fidelity, though.
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Re: Eggs in one basket?
Old 03-18-2007, 08:48 PM   #27
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Re: Eggs in one basket?

Smileydog--

Professor here with a question. I have 50% of my money in Fidelity--right now in Retirement Money Markets-- and I have the other 50% at Edward Jones in several different American Funds accounts. I have been concerned that I can't get a straight answer from the EJ rep on how much these accounts are actually costing me. So I'm starting to get pissed!!!!!!!

What type of deal are you getting with Fidelity on your AFs? Are you still getting the same low fees structure as with their specific Fido funds? If so, EJ is history!!!!!

Thanks.

Professor
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Re: Eggs in one basket?
Old 03-18-2007, 08:56 PM   #28
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Re: Eggs in one basket?

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Originally Posted by Professor
What type of deal are you getting with Fidelity on your AFs? Are you still getting the same low fees structure as with their specific Fido funds? If so, EJ is history!!!!!
I've moved other funds to Fidelity.

If you transfer your American shares in kind to a Fidelity account, Fidelity will hold the funds at no (possibly minimal) charge. There may be a fee for buying more shares, but reinvesting & selling are free.
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Re: Eggs in one basket?
Old 03-18-2007, 09:08 PM   #29
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Re: Eggs in one basket?

Thanks for the info, Nords!!!!!!! I really appreciate you, and I know you've had good luck with Fido. I have too. I just never knew they handled other accounts.

I'm calling Fidelity in the morning to get the specifics on the transfer. Once I get a straight answer, EJ is history.

Thanks again.

Professor
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