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Subject:  Re: opinions requested Date:  12/19/2002  1:38 PM
Author:  gurdison Number:  8233 of 20595

<If this works the way I think it will, according to a conversation with a Schwab rep, it should save me money on fees. Are there problems or pitfalls I should be aware of????>

There is no right or wrong answer in deciding this issue. I think account consolidation is a good idea. I switched most of my accounts to Schwab about 3 years ago and have never had any meaningful problems. I still keep one account with Vanguard for most of my fixed income portfolio and have never experienced any problems with them either. You will have to answer several questions yourself to determine if this will be a good match for you. There are other discounters out there who offer trades much lower than the 29.95 online trade that Schwab has. How important is that to you?

Prior to Schwab, I had a full service broker on one side and a number of DRIPs on the other. My average cost per transaction with the full service broker was over 150, plus an annual fee of about 100. The average DRIP transaction was under 5, great from a cost perspective but not so convenient. Having a dozen or so DRIPS meant there was also a lot more paperwork to keep track of. So neither provider really fit my needs. The full service broker was way too expensive for merely executing an order (their advice was not very good either). The DRIPs were certainly cheaper, but not very timely in getting your transactions processed. Schwab was a good fit for my needs.

I have the 10/1/02 Schwab pricing guide in front of me. For Schwab One accounts there are no fees if your total accounts exceeds 50k. For the Schwab Access account the limit is 100k. I think the very steep discounters appeal to those with balances below 100k or those who are very active traders, which does not sound like you. If you do not meet those limits, the fee is 10/month. The fees are waived if you have 8 or more comissionable trades in the last 12 months. The fees are reduced by 50% if you put in some $500 net each month through direct deposit.

One issue that was important to me was that I wanted to have a physical office nearby that I could go to if I wanted to see someone face to face. As I closed each DRIP position, I would get a certificate. There was a certain amount of comfort from knowing the transaction was properly credited to my account right in front of me. It has also been useful to have the local presence when we did several IRA/401k rollovers. There were many documents that needed to be notarized. It made a big difference to us to have it all handled by the same person who actually knew us.

I can't really speak to the other services they offer. I manage my own account and do not buy any mutual funds from them. It all depends on how much hand holding you want or need. They certainly offer it if you want it. The web page is fairly easy to navigate and the online trades I have done have always gone off without a hitch. For me almost all of what I do is done online, but I want the safety net of having a local office. If you have any specific questions, feel free to follow up with them.

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