Wellstrade

[bosco]

Somebody brought it up a few weeks ago.

I'm trying to figure out where to roll over a 401a and 457 into an IRA.

I had ruled out Vanguard because the brokerage fees aren't competitive, and I'd like to have more available than their funds (some of which are closed). Would like to be able to purchase ETFs. I don't have $1,000,000 that I can put with Vanguard at this time.

Fidelity looked good--cheap rates, ETFs available, but mutual funds not on their NTF (no transaction fee list) were expensive.

But Wellstrade seems to have up to 100 free trades per year, and this includes any no-load mutuals. The minumum is only $25,000 to get this level of service. 100 trades is plenty for me, I would mostly just do annual rebalancing--probably 10-15 trades/year.

What am I missing? Anybody used it, and are they happy with it? I already have a Wells Fargo checking account. Once I officially resume my residency in Canada (next fall), I will have difficulty transferring custodians, so I need to be sure that where I put it is where it can stay.

 

[yakers]

I don't have a good answer but I think I have some similar issues. I am winding down DRIP stocks and plan to get the share certificated and place them in a trading account somewhere. I only have six and I do not expect to trade much, only collect dividends to spend. I want the ability to make trades and buy stocks but I expect I would only trade like twice a year. Because I alrady have my Roth at VG and my wife has her Trad IRA and Roth there I am thinking of useing their brokerage services since so few trades are involved.

 

[Ed_The_Gypsy]

A while ago I found that Wells Fargo bank had lots of little, sometimes hidden, fees. Beware.

 

[LOL!]

I always write recommendations for WellsFargo here, so I guess I will again. The PMA relationship is where you have a free checking account linked with your WellsFargo brokerage account. Our WF is our only checking account. There is nothing to miss. It is legit and I am very satisfied. I have not paid any fees yet ... hidden or otherwise. We even get free checks printed.

You cannot buy "any no-load mutuals." For example, DFA funds are not available. I have bought Dodge&Cox International which is not on the WF NTF list, but is available. I paid $2.95 commission at the time, but it would be $0 now.

I have made less than 10 transactions in the last year with WF. No problems. As I have noted before the money market sweep is WFLXX which pays about 4.6% nowadays. I have also transferred mutual funds in-kind from AmericanCentury to WF without any problems.

I found TDAmeritrade easier to buy CDs online. WF you had to call them up to ask about rates and terms. The WF web site is clunkier than TDAmeritrade, but servicable.

 

[bosco]

Thanks, LOL

I did not mean to imply that one could buy DFA funds, but looking at the Wells Fargo website, it looks like Vanguard, Fido, Pimco, and most any no-load funds commonly available without an advisor can be had, and with no fee to get in or out (up to 100 x per year).

Although given that there is no commission to buy ETFs, I'd probably stick mostly with ETFs.

 

[cute fuzzy bunny]

One last time I'll put in a plug about low trading costs.

You might be losing that 'cost savings' and then some in the buy price those low cost shops are hitting you with. Which is not to say that the more expensive places are doing you any better.

But trading fees arent the whole story.

 

[bosco]

One last time I'll put in a plug about low trading costs.

You might be losing that 'cost savings' and then some in the buy price those low cost shops are hitting you with. Which is not to say that the more expensive places are doing you any better.

But trading fees arent the whole story.

is there an easy, reliable way to check this out?

 

[cute fuzzy bunny]

I'd have to do some googling to see if anyone has ever done anything, either on a large formal basis or on an individual basis. and then of course it can change from one month or year to the next.

My personal lousy anecdotal single data point 5 year old observations from trading in my ameritrade account and my freetrade account was that the ameritrade trades always seemed to transact at around the mid range of the bid/ask spread during the execution time window, while the freetrade ones always traded a lot closer to the ask price. After about a dozen executions on the freetrade account, I quit using it as it became obvious to me that they were making money off of me on the bid/ask spread and it was a shitload more than ten or twenty bucks.

On limit orders or very liquid high volume issues, the difference might be a penny a share or less. On market orders against a thin to medium volume issue, it could be significantly more.

There is a way you can do it yourself, albeit unscientifically like I did. Do two simultaneous trades and see if one is consistently giving you the best trade price against the spread for the execution time. I got two machines going, got the trade windows up and clicked the confirm button at the same time.

If you're trading enough for trading costs to matter, its probably worth it to find out where the market maker is extracting their profits from you...

I'll see if anyone has done a recent study on it...and if the study is any good.

 

[cute fuzzy bunny]

This has some decent tutorial information on the scalping arbitrage profit arrangement many market makers employ.

http://en.wikipedia.org/wiki/Scalping_(trading)

http://www.investorhome.com/daytrade/spread.htm

 

[cute fuzzy bunny]

Looks like a lot of the brokerages are performing to sec rule 605 on execution disclosures. Do a search for that on each traders web site to find their average effective spread and price improvement rates.

 

[bosco]

Looks like a lot of the brokerages are performing to sec rule 605 on execution disclosures. Do a search for that on each traders web site to find their average effective spread and price improvement rates.

thanks for the links--definitely food for thought.

I'll never be an active trader, and part of what I liked about Wellstrade was that I could buy mutual fund shares of other families without a transaction fee (including Vanguard, which you can't do through Fido without paying a hefty fee). Of course, in this case the purchase is executed at the closing NAV and there is no spread.

But for ETFs, the spread would certainly enter in. I guess I need to look into it enough to ballpark how much this could affect me before I make any decisions.

 

[cute fuzzy bunny]

Or just do limit orders for the price you want and hope there wasnt room for price improvement or a small dip in the price at the moment you bought.

And yeah, mutual funds are exempt from this. Although I found good benefits to holding mutual funds directly with the fund company. Concentrate enough assets and you get all sorts of freebies.

 

[maddythebeagle]

ahh...LOL already gave his/her experience with Wells on the other more recent post on....maybe look at that...http://early-retirement.org/forums/index.php?topic=12281.0

 

[LOL!]

Today seems like a good day to buy something in my WF account. What kind of experiment would you like me to try?

[Edit to add:]
At WF, I entered a limit order to buy, but apparently the limit was reached during the time I spent entering the order. A warning message appeared in red that this was the case and a note that the order would be executed as a market order unless I changed it. So I changed my limit lower and submitted the order. The order was filled a few moments later.

I intend to sell this holding in the near future, so I'll report on that as well or as far as that goes.