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Hi IP!

FYI, I currently use both ME and TDAmeritrade, and prefer the latter. I "inherited" ME when I agreed to manage some other family member's money.

Because of ME's relatively bureaucratic ways and poor interdepartmental communications, I recently checked TDA's incentive to move $1,000,000+ and it was $3500, according to the office I use.


Cheers!
Murph
PRO and MFPP Home Fool
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And speaking of ME, I originally got the 600$ bonus, but when I made another large deposit (a transfer of an IRA, I think), I asked if I could get another bonus, and though it wasn't the full $600, it was a nice it just for asking!!

Lisa
in MA
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Was interested to find out that there is an unadvertised incentive of $2500 for amounts over $1,000,000.

I should also clarify that if you are part of a couple, and can put up $1MM each, you each get the $2500 even if some of those funds are jointly held.

IP
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If a couple has over $2 million which they can transfer, why would they
need to use Merrill?
They would seem to be doing rather well without Merrill.

Howie52
$2500 out of $1000000 can be lost in fees rather quickly.
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$2500 for amounts over $1,000,000.

All well and good, and $2500 is $2500....

But: 2500/1,000,000 = 0.25%.

Kinda the same reason why I don't get excited anymore about commissions of $4.95 vs. $3.95 vs. $0.

$50,000 of a 100$ stock is 500 shares.
A 2 cent spread is $10. That is not only small compared to $50K, it is also larger than the commissions.
You'd save more money by watching the quotes like a hawk and jump on it when you see a 2 or 3 cent spike.

Not that I would spurn somebody handing me a $5 bill...or a $2500 check. Just that it's negligible in the overall picture.

I've toyed with the idea of transferring a rollover IRA account between Merrill and Etrade annually, to collect a $600 bonus every year. Haven't bothered to do it. Has anybody here done it? Why not?
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If a couple has over $2 million which they can transfer, why would they
need to use Merrill?


Merrill Edge is a self-service brokerage, without advisory fees, unless you ask for them.

$2500 out of $1000000 can be lost in fees rather quickly.

Since, at that level of assets, you would get at least 100 free trades a month, and there are no advisory fees, you pretty much get to keep all the money, except for any taxes that might be due.

AJ
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I've toyed with the idea of transferring a rollover IRA account between Merrill and Etrade annually, to collect a $600 bonus every year. Haven't bothered to do it. Has anybody here done it?

I've done it with other brokerages and will probably do it again early next year. A lot of things are negotiable, including the bonuses. I haven't spent a lot of time on it and usually I decide to do it when I have time on my hands for some reason or if I hit something that bugs me about the firms I am using.
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Do brokerage firms offer these bonuses
(a) in the hope of generating transaction and other fees?
(b) because they can make money on your holdings (if so, how?)
(c) some other reason?

Just curious,

Tom
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We were looking to move our money anyway and what Merrill Edge offers looks attractive. Not looking to have someone manage our accounts but it's nice to know someone decent can step in to help with the investing if I get hit by a bus. Very nice synergies with Bank of America, which will provide the local bank and free safety deposit box we need.

I was pleased at all the freebies and cash they were throwing my way in addition to saving us money compared to our current situation, so I thought I would share what I had found. It may not work for you and that's just fine, but why all the belittlement because someone does something different from you?

Feel free to ignore anyone handing you $5,000 plus to do something you wanted to do anyway, but I won't. Hey, I still pick up pennies I come across in the street. Take care of your pennies and the dollars take care of themselves, or however that quote goes.

IP
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Do brokerage firms offer these bonuses
(a) in the hope of generating transaction and other fees?
(b) because they can make money on your holdings (if so, how?)
(c) some other reason?


Because there are so many synergies with Bank of America, which bought Merrill Lynch, I suspect that the bonuses are an attempt to woo customers back to branch banking and away from on line financial institutions. I asked this directly and the guy I was speaking with agreed that was part of it. He also commented that they were pretty flush with the change in corporate tax rate.

I was wondering if there was a push they were going to be making with the stock, that would look more attractive if they bumped up their numbers. As has been pointed out, $2500 bonus is only 0.25% on a million, and you have to keep your money there 9 months to get the bonus. So I suspect anything they are trying to do will be within 9 months from when they started this. And the bonuses have no expiration date other than when they decide they are done. Could be gone tomorrow.

IP
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I've toyed with the idea of transferring a rollover IRA account between Merrill and Etrade annually, to collect a $600 bonus every year. Haven't bothered to do it. Has anybody here done it? Why not?

</snip>


A few years ago I transferred a $100,000 block of stock to Fidelity to capture 50,000 frequent flyer miles (a round-trip ticket to Europe worth $1,300 cost 60,000 miles, so the Fidelity promotion was worth a bit over $1,000) After 9 months, I transferred the shares back to Vanguard.

Probably took 15-20 minutes to initiate each transfer, so it was more than enough payback for the time expended, but well short of free-Obamacare.

intercst
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TDHFool asks,

Do brokerage firms offer these bonuses
(a) in the hope of generating transaction and other fees?
(b) because they can make money on your holdings (if so, how?)
(c) some other reason?

</snip>


I'm sure Merrill hopes that they can sell you a high-commission product once they have your account.

But even if Merrill fails at that, they can loan out your shares to a short-seller and make money on the escrow held.

intercst
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inparadise,

Be aware, the incentive is considered income to you. You will get a 1099 for whatever the amount. You will have to claim it on your tax return. :(
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you have to keep your money there 9 months to get the bonus. So I suspect anything they are trying to do will be within 9 months from when they started this.

I've had an account at Merrill for 4+ years. The promo bonus has gone on for all that time, so it's not like they are likely to cease.
In fact, a few months ago my assigned "account manager" got replaced and the new guy called. In the discussion, he discovered that they didn't pay me a promo bonus I qualified for a couple of years back--and he put in and got it for me, hit my account a few days later.


I'm sure Merrill hopes that they can sell you a high-commission product once they have your account.
Probably not. The (very few) calls I've gotten from them, they just mentioned that they offered a stock management service if I ever desired one. No pressure.
On one call, when I discussed looking for something in a certain asset class, he mentioned a mutual fund---that wasn't theirs and was actually a no-load and low expense ratio fund.


But even if Merrill fails at that, they can loan out your shares to a short-seller and make money on the escrow held.
Everybody's got to eat.
All brokers can and will lend out your stocks to short-sellers if you have a margin account. It's right there in the margin account agreement that you agreed to.

Interestingly, Etrade has a thing called "Fully Paid Lending Program". I suspect that other brokers have it, too. FIDO does. But whatever, it doesn't seem to be advertised. Not hidden, per se, just not mentioned. Unlike when they lend your stocks in a margin account, you allow them do so in your non-margin account---even an IRA. But with this, they split the profit 50/50 with you. I bet that if you had a big long position in TSLA you could make a handsome profit.

https://www.thestreet.com/story/14443832/1/make-money-off-yo...
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Be aware, the incentive is considered income to you. You will get a 1099 for whatever the amount. You will have to claim it on your tax return. :(

Pretty good pay for a couple hours of work.

IP
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But even if Merrill fails at that, they can loan out your shares to a short-seller and make money on the escrow held.
...
Everybody's got to eat.


Amen. I worry about establishing a relationship with a company that doesn't look after it's own bottom line.

IP
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OK, so I have a dumb question.

I've had most of my accounts FOREVER with eTrade (ever since they acquired Brownco). At tax time, I rely quite heavily on exporting my trades into Turbo Tax, especially since I don't trust myself at keeping track of cost basis (especially with dividend reinvestments) and wash sales. I like the idea of transferring assets to Merrill Edge for the bonus, but would that mean I'd lose track of my trading history? Or does that somehow transfer as well?

Thanks.
Cathy
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At tax time, I rely quite heavily on exporting my trades into Turbo Tax, especially since I don't trust myself at keeping track of cost basis (especially with dividend reinvestments) and wash sales. I like the idea of transferring assets to Merrill Edge for the bonus, but would that mean I'd lose track of my trading history? Or does that somehow transfer as well?

For securities that you have purchased since brokerages were required to track the basis (tax year 2011 for most securities), the basis is required to be passed on. For securities that you may have purchased prior to that, or securities that basis tracking is not required (some types of debt securities, for instance) the basis may or may not be passed on.

That said, it's always best to track your own basis, because brokerages have been known to make mistakes in tracking basis, and there are some things (step ups in basis, for instance) that they may not know about. That's why there is a column on the form 8949 to adjust the basis reported to the IRS, and a whole list of codes in the form 8949 instructions https://www.irs.gov/pub/irs-pdf/i8949.pdf to document the reason those adjustments were made.

AJ
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At tax time, I rely quite heavily on exporting my trades into Turbo Tax, especially since I don't trust myself at keeping track of cost basis (especially with dividend reinvestments) and wash sales.

Since the early nineties, I've used Quicken to track the cost basis of my investments in addition to tracking my income and expenses (including taxes) in my banking account. I haven't used TurboTax for the purpose of tracking the cost basis of my investments as it requires that you assume your broker to have the correct cost data.

In 2011, I transferred my accounts from Smith Barney to Raymond James using the Automated Customer Account Transfer Service (ACATS). A major problem with ACATS was the loss of information about the cost basis and date that each lot of shares was purchased although ACATS reported the correct number of shares transferred. I captured the transfers in Quicken but had to manually split each transfer into individual lots to establish the correct cost basis and date of acquisition using Smith Barney monthly statements.

It was a painful 3 month exercise to get all the lots and cost basis data into Quicken. I then used me Quicken data to update the lot and cost basis to update my records at Raymond James.
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Hi IP!

FYI, I currently use both ME and TDAmeritrade, and prefer the latter. I "inherited" ME when I agreed to manage some other family member's money.

Because of ME's relatively bureaucratic ways and poor interdepartmental communications, I recently checked TDA's incentive to move $1,000,000+ and it was $3500, according to the office I use.


Cheers!
Murph
PRO and MFPP Home Fool
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...I recently checked TDA's incentive to move $1,000,000+ and it was $3500, according to the office I use.

Nice!! Anyone else have bonuses to offer?

IP
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Hi IP!

I'm sure most, if not all, online brokers offer bonuses to move seven figures. However, I have found that there is an "official" rate....and there are the "negotiated" ones: sometimes one can get a bit more(i.e. the rep you talk to may sacrifice a bit of his account acquisition commission to get your business).

When in doubt, ask for more.....all they can do is say "no", and you'll be no worse off than you were. ;-)


Cheers!
Murph
PRO and MFPP Home Fool
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Posted previously but here's where I often begin:

http://www.hustlermoneyblog.com/best-brokerage-bonuses/

My experience is that everything's negotiable. My last deal included a bonus for my son to move his Roth as well.
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