Don’t Under Estimate Customer Appreciation

[Islandtraveler]

I use two different brokerage firms as I am a believer in the “Don’t put all of your (nest) eggs in one basket” theory. I was surfing the net on different brokerage sites and came up upon an offer from Fidelity that caught my eye. They were offering up to $2500 dollars to open an account with them. It just so happened, that I needed to visit my brokerage (which is Scottrade) in order to fund my last SEP contribution. During the conversation with the office manager, I asked him if there was anything that he could do for a legacy account holder. He said that he could give me a $100.00 bonus in addition to 50 free trades and a 15% discount on future trades. I thought that was nice so I left happy. Being retired and having some time on my hands, I called Fidelity and asked them what they could do. By the time I got off the phone with them, they offered me $5000.00 to switch. In addition, they said that they would pay the transfer fees and match the commissions that Scottrade charged. I thanked him and contacted Scottrade to tell them what they had offered. I never had a problem with them and felt an obligation to let them match the offer. They did. 5 grand for a couple of phone calls. BTW, I do not consider myself a high frequency trader. I generate maybe $500.00 a year in trades. It really doesn’t make much sense to me. It will take them 10 years to break even. Am I missing something? Anyway, I thought I would share my experience with you so that maybe you could benefit.

 

[rodi]

Good job on negotiating a sweet deal.

 

[audreyh1]

Thanks for sharing. Great advice for anyone considering the same.

 

[NW-Bound]

The amount they offer depends on the balance of the account. No broker will offer $5K for a small account. But even if the account is greater than $1M, a $5K windfall bonus is nicer than I would expect.

 

[Sunset]

Good deal, it must have been a large account.

I think they make money from lending out your stock to option traders.

 

[audreyh1]

Good deal, it must have been a large account.

I think they make money from lending out your stock to option traders.

Only if you have a margin account.

Otherwise it's just commissions and fund fees.

 

[target2019]

Must have been a large account. Makes you wonder.

5K could be what it costs to land a new, larger customer.

 

[brett]

When we transferred from a full service broker to a discount broker the latter paid the transfer fees on trading accounts and our registered accounts. Worked out to about $1200. No other incentives...I was just happy to have my costs covered. Perhaps I left some money on the table?

 

[GrayHare]

These huge brokerages have all sorts of ways to make money off your investments, far beyond $7.95 commissions and expense ratios.

 

[audreyh1]

Like what? They aren't allowed to loan my shares. I don't have a margin account.

 

[Totoro]

Some charge costs on processing dividends.

But I expect something more pedestrian is going on. You just get discounts and incentives based on what you might trade given your account size.

 

[aida2003]

Hmm, I'm also curious how you can get such a sweet deal. The OP must have a serious balance at Scottrade, IMO.

We've got a joint brokerage account at Capital One and I'd love to transfer to a brokerage that can convert /set-up our holdings to a trust type account as Capital One doesn't offer such accounts. However, to transfer we'd be charged $50 per stock. Maybe if I was able to find such a deal like OP I'd move.

Anyway this post got my brain thinking

 

[DrRoy]

I also had my accounts split between Fidelity and another broker. The other had given me a couple issues over the last year, and when Fidelity made the $2500 offer I shifted my funds at the other over to Fidelity. I do find it more convenient having consolidated at one firm.

 

[Sunset]

Hmm, I'm also curious how you can get such a sweet deal. The OP must have a serious balance at Scottrade, IMO.

We've got a joint brokerage account at Capital One and I'd love to transfer to a brokerage that can convert /set-up our holdings to a trust type account as Capital One doesn't offer such accounts. However, to transfer we'd be charged $50 per stock. Maybe if I was able to find such a deal like OP I'd move.

Anyway this post got my brain thinking

Are you sure its not $50 per account ?
That $50 per stock is outrageous, never heard of that before.

 

[HillCountry]

Wow, I think I need to move around, at least threaten Fidelity I will move.

 

[Islandtraveler]

Are you sure its not $50 per account ?
That $50 per stock is outrageous, never heard of that before.

I believe that Scottrade charges $50.00 per account so the transfer fee to another brokerage would have been $150 for 3 accounts. 50 bucks per position does not sound right.