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No. of Recommendations: 13
 19% (438 Votes)
I was thinking of opening an AmEx account. Not now it's too expensive.
 24% (555 Votes)
I'll be closing my account and moving the money elsewhere.
 5% (118 Votes)
Big deal. This will have little impact on my current AmEx account.
 30% (708 Votes)
These changes make me distrust management.
 21% (484 Votes)
I didn't have an account there before. I still won't.
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No. of Recommendations: 19
I'll be closing my account and moving the money elsewhere.

Not that it matters much, but this is my choice, with two caveats. First, I also think that option #4 is an accurate description - in fact, the primary reason behind my decision to move my account:

These changes make me distrust management.

Second, I not only plan to move my brokerage account, but I have cancelled my Blue card, and I intend to sell my shares in AXP in the very near future. In case you're wondering, all this has been expressed to the company. As many others probably have done, I have written to Mr. Hallin to complain. As many others likely have, I received a request via email to discuss the option by phone. As I waited a few days to complain, I responded to this request somewhat differently than you may have:

Mr. Pope, thank you very much for your quick reply on this matter. However, I have already heard of several others who have received such calls from your organization. As I understand it, these callers are authorized to offer up to 20 free stock trades per month, though those trades are still not inclusive of limit orders. As that is the primary cause behind my complaint, unless said caller is able and willing to offer anything more, and more importantly, to put it in writing, I am not interested in receiving a call. I have already spent nearly a year with American Express brokerage, and frankly I don't have any desire to spend any more time unless this ridiculous policy is removed at once. At the very least, a grandfathering of the existing accounts as they were originally announced would satisfy my request.

If there is nothing new to offer, I see absolutely zero reason to speak with Mr. Hallin, you or anyone else about my dissatisfaction.

The only way that you will regain my trust and retain my business is to immediately repeal the insane decision to charge $19.95 for all limit orders placed on my account after 10/30/2000. If your company feels the need to increase the price of transactions, that is fine, as I understand that - but the reason I moved my account in the first place was to benefit from free trades - at the moment, free buys and in the very near future (hopefully), free sells as well. Naturally so long as I fall short of the $100K goal, I would expect to pay for my transactions - and paying the higher price for those transactions is acceptable. In fact, I can even understand limits on the accounts to prevent professional traders from taking advantage of your generosity. But once I make it to that $100K level, I would absolutely expect to receive both free buys and free sells as I was promised in the many advertisements asking for my business, subject to those monthly limits. As an individual investor, I can understand some of the thinking behind this move, to limit exposure to day traders, and to not bleed money continuously. At the same time, I would have expected American Express to act in a manner which is consistent with their generally highly-regarded customer service.

I am not so naive as to expect this to continue in perpetuity - but to suddenly be lambasted with the information that not only are my trades being restricted to a certain number, they are removing the ability to make limit orders - and at the same time, increasing the rate at which those orders are executed! From an organization that, until recently, was as widely known and respected as American Express, this is unthinkable. As an organization you just slit your own throat. Without consumer confidence, you are nothing.

As I have already sent word to Mr. Hallin, the overwhelming majority of my trades are limit orders. Offering me 20 free trades a month, or 50 free trades a month, or 100 free trades a month, means absolutely nothing to me as they would not include limit orders, which I am placing - you might as well continue to offer me unlimited free trades, as none of them will be used. Anything less than restoring limit orders to my free trade allocation will indicate to me that American Express is completely unworthy of my business as a consumer and also my interest as an investor. For pulling such an obvious bait and switch, American Express should be decimated. If I can do anything to speed that process, I will. For now, removing my business and selling my stock is all I can do. In the future, I will be sure to tell all my friends, family and business associates how they should never deal with American Express because you obviously cannot be trusted.


Needless to say, I've yet to be contacted again. In any case, I consider this saga over. The bad taste in my mouth will fade. But I will not do business with American Express again. By the end of the year I will have washed my hands clean by removing any traces of contact with the company - the brokerage transfer is already in progress, the Blue card is cancelled. I haven't sold the stock simply because I haven't gotten around to it (though that will definitely happen before 10/30!).

Thanks for listening. :)

Chad.
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No. of Recommendations: 0
I have received AmEx stuff before but I never moved on it. Right now I have accounts at eDreyfus, Ameritrade and e*Trade (and my daughter's educational IRA at Schwab). I'm going to move them all to one spot but I have been too busy.

E*trade's site is the most comprehensive but I have gotten used to Ameritrade. That's where most of my money is. In 12 months or so I will buy a house and Fidelity has a great program with GMAC Mortgage. You can get a 100% loan-to-value mortgage with no PMI from GMAC and they use the equity in your Fidelity account as your "down payment". That way, you do not have to liquidate your holdings and pay taxes on your gains in order to buy a house. It is a clever deal.

Obviously, you should not have all your money in a few speculative stocks if you are going to do this.

Has anyone tried this with GMAC and Fidelity yet?
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No. of Recommendations: 0
Oh my God! Your article about the recent changes in Amex's online trading sounds like an excerpt from my angry email to American Express. Obviously, I am one of the fools who bought the bull about free and superior quality service (= bait) ... and now, switch! to not only loosing the free priviledges but a rate hike in sells!!! Why are we - long-term investors - paying for the day traders' abuse of their services? Why not cancel or penalize the day raders accounts? If I sound like I am 'barking up the wrong tree' that's because my long and well-crafted email to Amex only managed to earn me a FORM response from the company! Well my friends, THIS "Dear Customer" will be taking his chunk elsewhere ASAP... any advice on where to go for inexpensive quality online trading companies?
Nicolas C.
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No. of Recommendations: 0
Amex and Etrade must be incahoots........ill be closing my Amex account
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No. of Recommendations: 0
MSDW raised rates for new accounts and promised to raise rates for existing accounts (me) Oct.1,2000. They have now extended "preferred pricing"..."into next year". I was planning to close my MSDW account before the increase and I will before the other shoe drops. I did consider (free trades) but I'm no longer interested in opening one at AmEx.
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No. of Recommendations: 0
You need to let us choose at least two answers, not just one. Yes I plan to move my accounts elsewhere. And, yes, this move makes me distrust management. I would like to be able to vote twice, but apparently that is not an option.
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No. of Recommendations: 1
We opened an American Express Corporate Credit Card Account, which clearly stated there was no annual fee (for this particular card, a Delta Sky Miles card) on their website. Surprise, surprise, we got our cards and A BILL for an annual fee. OK, after long hold times while someone checked to see if they could waive the annual fee (their idea), we decided we had made an unwise decision to use the American Express card. So, after the rep got back on the line, we told her that we would prefer to just close the account ("bait and switch" was sure on our minds). For 2 months, we were billed the annual fee (and called again and again to cancel) then we were just charged the late fees and penalties (ok, so it's 50 cents or a dollar, but we're still getting charged). We have a $1.88 sent balance on our closed account that we can't make go away, and all this because we believed AMEX's web site and decided to be customers!! UGH. Considered being brokerage customers as well, and am glad we had our credit card nightmare before. Now that I've read this post, I'm even more glad. I use Fidelity, and while I'm sure it's not the most inexpensive, I'd consider it good value, as I expect excellent customer service and get it when I need it from them.
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No. of Recommendations: 0
I haven't yet moved my portfolio to AMEX, but I will. I agree that the recent price changes are not indicative of great foresight, but I can understand their failure to take the day-trader volume into account.

I'll be in the $25K to $100K category with three free trades a month. I'd much prefer five free trades a month, but three is acceptable. I like the concept of free trades to attract investors to open accounts.

Come on AMEX, compromise! How about five free trades for the smaller accounts and 15 for those with over $100K. That will discourage day-traders, and still give the rest of us a deal too attractive to resist.
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No. of Recommendations: 1
I think there is something basically wrong with the company so I'm selling my stock too.

Dick
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No. of Recommendations: 2
OK, so it's not as good as before. Maybe you feel like you were tricked into opening an account. Or, maybe American Express realized that they would go broke by giving away FREE, UNLIMITED LIMIT BUYS (and SELLS, for over $100,000).

Sure, did they realize too late? YES.

Do customers feel cheated? YES, most probably do.

Would it have been better for AMEX to keep the program going until they ran their business into the ground, just to appease customers? You answer this one.

In a year or so they would have to close the brokerage anyway. Instead, American Express NOW OFFERS...

1) 3 FREE MARKET-ORDER BUYS A MONTH for over $25,000

2) 10 FREE MARKET-ORDER TRADES A MONTH for over $100,000

3) Limit orders are now $19.95, $5.00 more but still inexpensive.

So, basically, Fools who buy-and-hold are unaffected. I didn't realize that this was only 5% of the Foolish community (sarcasm intended!)

cziggy

Note: I have no position in AMEX, nor do I work for or represent anyone in American Express. If anyone in American Express wants to offer me a job, however.... just kidding.
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No. of Recommendations: 0
Absolutely, it's bait and switch. In Connecticut, at least, a retailer could face a hefty fine for pulling the same stunt with an appliance.
I talked to an AMEX advisor this morning who assured me that I would not be charged $75 for dealing with a service representative (instead of online) to buy a mutual fund. The fee applies only to stock trades through a rep, he said.
(AME does not allow the purchase of Vanguard short term bond fund online. It has to be done through the service rep. I suspected it was just another ploy to extract money from the investor, but was assured by the rep. that buying funds via phone will remain free.)
As a buy-and-hold kind of guy, the change does not immediately affect me. But it does raise warning flags.
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No. of Recommendations: 0
I am unaffected by this, but the way I see it, it's not a matter of punishing them for the bait-and-switch, but rather avoiding rewarding them. I sincerely doubt the Rule portfolios would have signed up for the account in the first place with the no limit orders exclusion in place, so by staying, they are putting money in Amex's pockets for deceptive practices. In short, regardless of intent, the operation was a success according to the balance sheets.

Personally, I have a problem with someone getting paid to lie to me and tend to be paranoid on that account.

I don't do any business that involves Amex, but I consider myself warned.
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No. of Recommendations: 1
My wife & I have separate accounts of over $100k each with AMEX too. We moved them from Salomon Smith Barney because of their commission free transactions & we respect the company. We are not day traders & most of our investment are for long term but we do have set aside a small portion of it to trade actively.

Like everybody else, now we have lost faith in AmEx. If they do not do anything to the change, we will move our accounts to another discount broker. We will also close our AmEx credit card account. I guess they do not realize that they could lose their credit card business too. I will spread the news to my friends who have AmEx credit cards.
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No. of Recommendations: 1
AH!
At last I feel the universe makes sense again.
When this whole free commissions thing started, I refused to go to Amex because of the incredibly incompetent jerks I'd dealt with in their Financial Planning office. Unbelievable! I read about this commission thing, and the glowing reports on the Rule Maker board about Amex and I just couldn't understand how such a 'Great' company could've screwed me so badly.

At last the other shoe has dropped, and I realize it's just a phillips-head screw instead of a flat blade this time. Same company - different screw.

Z1
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No. of Recommendations: 0
When they announced the no-commission deal, I knew it wouldn't last long, so this is no surprise. I agree that they did not think it through, and early on it was obvious that they were flooded with more accounts, more trades, and more web site traffic than they were prepared to handle. I'm surprised it took them so long to wise up to the day-traders.

The only thing that bothers me now is the fee for limit orders, which I do use. I could go elsewhere and pay more for market orders (which I also use), or just figure that I am setting my limit price to gain a few hundred $, and the $20 fee is worth it. I think it is quite reasonable, though, that they should allow a small number of limit orders for free, and maybe if they hear that enough they will do it. I would give "2-for-1" if they want: 10 free market orders, or 5 free limit orders, or any combination.

I don't think it was "bait and switch", it definitely was an attempt to buy market share (and access by their account reps to these juicy $100K customers, so they can attempt to sell them other Amex products), but I think they probably started out intending to keep their original pricing, and just didn't anticipate things that a company already in the online brokerage business - or an online brokerage customer - would have considered obvious. This might be a reason to knock management's competence, but not their integrity.
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No. of Recommendations: 0
The American Express change came as a real surprise as I was anticipating that they were finally (after a year) allowing the on-line brokerage accounts to be linked to regular accounts. Apparently, they seem to be going the opposite way. Certainly causing me to start looking around for a possible change.

airkuch
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No. of Recommendations: 1
Frankly, I'm amazed at the negative poll results so far. I moved all of my accounts to AMEX last April from Datek and E*trade (I've got a joint account and two IRA's).

This change in commission schedule notwithstanding, I still think it's a great deal. My trading consists of one or two monthly buys from my regular savings and an occasional sell, so, the commission schedule will not affect most of my transactions. I will, however, think twice before placing a limit order, which I've done on occasion in the past.

As I've said, I've dealt the E*Trade and Datek in the past. AMEX's customer service has them all beat. Any time I've called them, I've never had to wait more than a minute or two for a representative to come on the line, and my questions have always been answered efficiently and courteously.

Let's face it. Things like this happen in the business world. Costs increase and businesses raise their prices all the time. I'm glad that AMEX chose to take their price increase the way they did, which I think will have the least impact on the vast majority of account holders.

I give them high marks and praise and feel very secure with the future of their brokerage business.

hogan
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No. of Recommendations: 0
The forced choice vote didn't allow me to actually express all of my feelings. I could only pick one, so I picked "makes me distrust management."

I have an accoun with AMEX. I also have other accounts that I was going to consolidate with my AMEX brokerage holdings. And I was going to add to my portfolio because of the fee structure. I am not actively contemplating closing down my AMEX account. Yet. But, I am seriously reconsidering adding any future money to that account or closing my other accounts. I may well end up closing the account as well.

As someone who studies organizations and attitudes like trust, I agree the article. This change not only greatly reduces their competitiveness in the marketplace but also erodes my trust and makes me feel as though I have been taken advantage of. This is not the way to win customers. This also makes me question the long term value of my holdings of AMEX stock. If I do decide to close my account and move my business elsewhere, I am also unlikely to want to maintain my status as a shareholder...
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No. of Recommendations: 0
Good for you Chad. You know, right or wrong, you have to love a guy who puts his money where his mouth is. Personally I agree with you, but even if I didn't I would be impressed with the way you dealt with it. I thought about getting an account at amex but I couldn't since I live outside of the US. Lucky for me. I would be faced with the same decision as you if I had done so.
djm
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No. of Recommendations: 0
I am not surprised at the negatives from this poll.

AMEX lost my 15 year account last year when they could not get a change of address done properly (after multiple months of completing the change of address form), had me call back twice, didn't do as requested, etc. Then when I asked if they would do anything for me after all of the aggravation, they said "they were sorry". I asked if that was all they would offer and they said yes. I got to the supervisor level who also would not negotiate.

Next day I called to cancel my account, they immediately wanted to do more than say "sorry". I explained that their chance for negotiation was the prior day and demanded that they cancel my account.

They lost a good customer that day. I used to ring up large monthly bills and pay them in full each month.

Time is money - I wasted much of mine due to their incompetence. I would never do business with them again. I did look at the brokerage offer, but have been a happy Fidelity customer for about 20 years. I'm glad I stayed with Fidelity.

I don't normally trash a company (I didn't post this problem on the AMEX board when it originally occurred) but since you put a poll together, I thought I'd chime in my 2 cents.

Jon
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No. of Recommendations: 0
I think the new Brokerage Policy from AmEx is probably a mistake, but I'm not surprised that it happened. Me and my investment club use T.D. Waterhouse for our trades. We are tickled with the services and commissions ($12 online).
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No. of Recommendations: 3
I made a big mistake,I sold 120 shares of AXP the minute they alerted me of the policy change. I should have sold 120 LIMIT orders of one (1) share each. Yep, I still got a few hundred shares of AXP to play the game, AND I WILL.


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No. of Recommendations: 0
I signed on with American Express brokerage because of the free online trades. This move smacks of bait and switch. I called them up to complain and without even hesitating, they gave me 20 free trades instead of 10. I pressed them by asking if this would be forever. They replied by saying it was only until March 1st of 2001.

All of this gives me less than a warm and fuzzy feeling towards AMEX. And despite the trouble it takes to switch accounts, I'll do it, if they don't reverse this policy by March.

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No. of Recommendations: 0
My impression from your article about American Express's change in their fee schedule is that you are a "whiner", and somewhat juvenile in your view of business and the market place. The customers will decide whether this new fee schedule is successful or a mistake. Get a life!
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No. of Recommendations: 0
I opened my acct with AE in Feb and asked specific question if this was a introductary rate or a on-going effort.. Was told that this was a on-going offer.
This week sent AE a "unhappy" letter and got back this "form" reply "... we're sorry you are unhappy but ..."
Don't trade much but use limits/stops regularly when I do trade so this represents a huge cost increase for my trading... I guess that they don't need accounts with mid-six figures in their brokerage firm. I am sure that some other brokerage house will charge me less to handle my account and my trades... I'm glad that I don't have AE in my portfolio... otherwise I would have already sold it... as "spooked" as the market is these days .. it won't take long to trash AE's price as money start flowing out of AE...
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No. of Recommendations: 0
Please be sure to get these poll results over to American Express.

Their moves are extremely disappointing.

Very truly yours,

Paul
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No. of Recommendations: 2
I also wanted to choose two options on the poll: I plan on moving my money elsewhere, and I am more likely to distrust management in the future.

We rolled-over my wife's 401(k) into an AmEx IRA account in April. It wasn't a seven-digit sum, but it was well above the $100K threshold. We made several buys in the first couple of months, and a couple of sells; since then, two or three buys a month, and no sells. Looks to me like we're going to become buy and hold investors.

But we usually took advantage of the limit orders, as the first few market orders we placed "surprised" us when the executions didn't bear much resemblance to the real-time quote we'd seen on the "confirm your intention to trade" screen.

So cutting us down from "unlimited" to "ten" trades a month won't hurt. But like several other people that have posted, yanking out the rug on limit orders WILL hurt. So it's time to hunt for another broker, and time to cancel the AmEx Optima card too. My AmEx corporate Green card will stay in my wallet as well; my employer prefers that I use it, but they don't demand it --- so AmEx will lose that lucrative business too.

Wasn't it just a few months ago that AmEx stated that they were going to crack-down on people that used their accounts for day trading? I sure wish they'd been honest about that, and simply asked such customers to take their business elsewhere. Now they're going to lose a lot of buy-and-hold customers too, the very type they wanted to retain. Somebody in management didn't think this one through.

AmEx, do you want this account to stay with you? I'm listening. Start by restoring free limit orders. Cap them at ten a month, if you must. You have already put in writing that you won't assess us a maintenance fee on our IRA, ever. Do the same for the free trading thresholds, and guarantee that I'll get ten limit orders every month for free too.

This assumes that AmEx is really only trying to weed-out the day traders. But I don't know if that's true or not. If that doesn't conclusively prove that AmEx has blown it, I don't know what does: I DON'T KNOW IF THEY'RE LYING TO ME OR NOT. That's a sorry state for American Express to have placed itself into.
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No. of Recommendations: 0
" .... 6% (63 Votes) Big deal. This will have little impact on my current AmEx account."


Very interesting! According to the company's line, these changes would ONLY affect 3-5% of their current account holders.
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No. of Recommendations: 0
At least Amex has applied the changes to all customers in all geographic locations (I believe that Amex does not accept overseas accounts outside USA). As a customer of Charles Schwab Hongkong Office, I pay minimum US$ 39.00 commission on every trade, when I know that for USA based customers the minimum is only US$29.00. I don't like it one bit, but I am still a Charles Schwab Customer. It is no accident though that I am also a customer of ETrade.
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No. of Recommendations: 1
Please be sure to get these poll results over to American Express.

Their moves are extremely disappointing.


Earlier this evening I sent them a link to tonight's article as well as to the poll. The e-mail I sent was addressed to Harvey Golub and copied to a number of other execs.

I'll be sure to report back with any response that I receive.

Phil

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No. of Recommendations: 0
While this won't really impact my account (I don't do a trade a month, much less 10), I don't like the fact that they keep changing the rules. Don't think they thought things through up front.
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No. of Recommendations: 0
I voted for the distrust management.

I also fit between two of the other buttons. I had already opened an account and was going to transfer some 401K money to a Rollover IRA. Free trading sounded too good. No taxes and No commissions. So I read the fine print. a fee for closing the account didn't sound right, so I went slow. Now, I have decided not to fund the account. I had also started to get calls from the Advisers. And I don't need or want their assistance.

Oh, well.
AKS
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No. of Recommendations: 1
In my estimation, those that "distrust management" as a result of a pricing mistake are overreacting. Those that were thinking of Amex but will not open an account or are closing their accounts are very sensitive to price, which is ok, but are also overreacting.

Management made a pricing mistake. It wasn't bait & switch, it wasn't malicious. Even if management did the whole thing on purpose, it was no more of a come-on than anything Circuit City or any car dealership perpetrates.
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No. of Recommendations: 0
" ...They lost a good customer that day. I used to ring up large monthly bills and pay them in full each month. "


In their eyes, you're a BAD customer because you ring up large monthly bills BUT pay them in full each month, so that they can't extract fees and interests from U.
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No. of Recommendations: 1
Here's the part of the letter from Amex announcing this change that really ticked me off:

we will be adding new enhancements requested by our customers, such as additional equity research and portfolio analysis tools. These and other new services are scheduled for early next year ...

Yup, they are pulling the rug on the free trades with just over 30 days notice, and they have the gall to try and soften the blow with a vague promise of "enhancements" and they don't even have a firm date for implementation!

Silly me, I never thought to write to them and request an "enhancement" that they just leave the terms of the account the way they were when I signed up for an account.

-Tony
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No. of Recommendations: 0
I'm glad you put this poll into your article on the AmEx fee change, because it led me to call up AmEx and complain. I hope a lot of you guys will do the same, as it could push AmEx into a more considered fee adjustment.

The AmEx rep who took my call said they raised the rates largely to fund enhancements in service that customers had requested, such as limits orders and more research. I don't use either one; the appeal of AmEx is precisely its free trades. My suggestion was to charge fees for research, for those who want it, rather than taxing the rest of us.

I'm an infrequent trader, but I moved to AmEx just two weeks ago because MSDW was about to double the rates for grandfathered accounts, to fund extra services that some customers want -- in other words, the same thing AmEx is doing. And to ice the cake, just after I made the change, MSDW announced that grandfathering would continue past January.

Further irritation: just before I made the change, MSDW reps assured me the rate increase was sure to go through on Sept. 30, and AmEx reps told me they'd heard of no impending change in rates.

Some people remarked that AmEx probably had to raise rates to keep from going broke. But that doesn't justify raising the rates all the way to $19.95. What's wrong with $5, like Brown, or $10, like Datek? Am I wrong that each trade only costs the broker a few cents?

Raising the rates all the way to $19.95 in one unexpected step is just plain bad thinking. A sane policy would have been to test the waters with a small fee increase and make further changes later if need be.


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No. of Recommendations: 0
TMFGrape,
I too am unhappy about the changes that AmEx is making to their fee schedule; however, I was expecting it. Before I opened an account there, I asked my full service broker to match their trade fees (free) so he called them and asked how they were going to support free trades. This was last February. He was told that they expected to fund the trades by the margin fees and additional services they sold to their new clients. Also they planned to raise the fees later. So I guess we have arrived at later.
I use limit orders often as I live on the west coast and the market has already been open 2 to 3 hours before I log on. Often the price I decide is a fair entry price has already happened but is not the opening price nor available again later in the day. When I have used market buys, I usually find it to be a higher price than later the same day and I end the first day down which psychologically doesn't leave me very happy with my new buy. I suppose in the long run it doesn't matter except now it is going to cost me $20 to do it! I also use limit sales for the same reason. From what I read in MF articles, I don't think you will encourage me to get up at 5 AM to trade instead!
Thought this might add some info to your viewpoint and that of other MF readers in other time zones. Keep up the good work of generating thoughtful, well researched and written articles to stimulate readers of so many levels of investing experience.
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No. of Recommendations: 0
Phil, Phil, Phil.....sounds like sour Grapes to me.

Wax
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No. of Recommendations: 0
These changes make me distrust management.

My American Express brokerage account has been nothing but TROUBLE from the start. Being attracted by their fee structure I promptly filled out an online application which was immediately rejected. Since I don't give up easily, I called one of their Reps and asked why they rejected my application. She responded that it was rejected because I have a foreign address and it is illegal for persons outside the USA to trade US securities. I explained that E*Trade never seemed to have a problem with a foreign address and she responded that Am Ex's competitors often operated illegally. I thought their Rep acted in a completely unprofessional manner in making a statement like that and at that point I should have ended my attempt to open an account there.

In any case I was a bit shook by the implication that I may have been stepping out of the legal boundaries by purchasing stocks with a foreign address. After some investigation, I felt reassured that the Am. Ex. Rep was misinformed. So I tried again. This time I got a hold of a Rep that advised me to use my US business address and that should solve the problem. He indicated that Am. Ex.'s account acceptance criteria had only to do with internal policy and nothing to do with the legality of trading with a foreign address. Bingo – that did the trick.

But the hassles didn't end there. After funding my account and making a few trades I discovered they were charging me for the trades. No problem I thought – just drop them a line over their secure server and that should be that. They responded with a form letter to contact customer service at their 800 number. Since I pay overseas phone charges for 800 numbers I like to make it short, and after a 15 minute wait to speak with a Rep I was certainly considering just letting them charge me for the trades. The Rep was however helpful and refunded the charged fees as well as making sure that future charges would not be made.

While I had the guy on the phone I thought I could at least find out a bit about their business. I asked how the new online brokerage business was developing and he indicated they were overwhelmed with applications. HHMMM not bad I thought. So then I asked him what he thought about buying stocks in his own company and he advised against it. When asked about why I can't solve simple problems per e-mail he explained it is against company policy to do so.

Then it was the free check writing privileges. The next charge, the next e-mail form letter response, the next phone call and the beat goes on. To add aggravation to injury they rejected my “ fee free” credit card application because I have no existing DEBT!

As a final note I find their site primitive in comparison with other online brokers - difficult to navigate, poor presentation of quotes and historical data, poor correspondence capabilities, slow, and lacking some attractive services like statements per e-mail and e-transfer of funds into the account from other existing accounts. Although I trade infrequently I nearly always place a limit order because I have found that by placing a market order I often end up paying a few dollars more than necessary per share.

To sum it up, I am not sure at this point how I will respond to their new fees structure. In any case, I am not the happiest camper so I may be setting up camp elsewhere in the near future.....
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I am also a stockholder in American Express. The free trades for one year were an excellent marketing tool. Once a person has a account, chances are he will not move the account, providing they like the service. As a stock holder you should be happy they are now charging a fee. We are the people who will profit in this change of policy. I like the idea of moving my account to American Express, to enjoy the ten free trades. But I have been with my current broker for a long time and do not want to go all the changes again. I also have a discount broker.
Personally I like the way they marketed this free trade program and feel American Express Brokerage Co will grow. Jonathan Hurchanik
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We voted for a distrust in management. When you deal with and hold OPM that's no small loss for AXP.

We cancelled our AXP card membership after a 22 year relationship and $80k worth of annual charges against the card. Despite mentions in a previous post, those of us who pay off our current monthly charges and carry "zero" balances do still offer a hefty revenue stream to AXP by way of point-of-sale fees assessed against the merchant.

How AXP handles his marketing debacle determines whether or not we ever conduct business with them again. If wasn't just a year or so ago KO mishandled quality issues in France and we snicker at the current state of affairs regarding Brigestone tires and its poor management image in the public's eye.

The resolution of this marketing and customer relations problem will visibly define the expertise of AXP management group and provide us with an important piece of the puzzle regarding its viability as a long term investment for the RM portfolio.

Mr. Golub...are you listening here?

Fishlip:(




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Any one notice the AXP propanganda streaming across the top of this message board?

How ironic!

Fishlip:(
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The customers will decide whether this new fee schedule is successful or a mistake.

Adapting from Pogo, "We have met the customers and they are us." This is the customers deciding.
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In my estimation, those that "distrust management" as a result of a pricing mistake are overreacting.

A "pricing mistake" means they they got everything wrong. Price was their differentiator. Still is - the ads still trumpet "free trades."

Companies make mistakes. But how hard was it to foresee the mistake? Their mistake was that they failed to anticipate that people would use more of something that was free.

So I get a choice. Either management is manipulative, planning a bait and switch from the beginning, or management is incompetent, unable to see the simplest consequences. Neither choice inspires confidence. I think "distrust management" is a rational response.
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I am an impatient investor. I sometimes trade instead of wait. In about July I bought 50 AXP at $139. Split that to 46+. I sold it last month at 58+. Part of that was my impatient trader nature. But for the purpose of this discussion, I sold it as the one stock in my rather conservative portfolio that needed to go.
There was something wrong with some of the decisions being made at the top, and my broker's anaysts have not done the usual - raise the target when you reach the earlier one. They left their target at 60+. They seemed to know something. And AXP has not gone up since as have most other leading financials.

Unless we crash, I'm sure AXP will do another double in the next seven to ten years, but in that area I just think I'd rather go with C or JPM or a Mellon. I put the proceeds into telecom infrastructure.
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Phil, glad you covered this. I wondered what your take would be. Great article!

On the poll, I vote for this choice:

"Have one account there (e.g. Trad'l IRA), already, won't move other (Roth IRA, non-IRA) there."

Fool on!
Tom9
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jonmail wrote:

As a stock holder you should be happy they are now charging a fee. We are the people who will profit in this change of policy.

I'm also a stockholder in AXP, but I use a different broker. As a shareholder, I don't think this is a good idea. If AmEx pisses off their customers and the customers start closing their accounts (both brokerage and other accounts), then we might see decreasing revenues and decreasing profits.

Personally, I think if they were going to change their policy because the day-trading was killing them, perhaps they should have come up with a compromise, say limiting the number of free trades per day. Or, only get 1 free trade per day per stock (so you could buy or sell MSFT once each day). A grandfather clause would have been nice as well.
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Phil,

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AmEx is just doing what all profitable and successful companies do... They are refocusing their policies to attract their target client base. This should not drive away anyone they are truly trying to draw into a business relationship.
True, they may have come online without enough research, but if a few of those affected by the changes stay, they (AmEx) will be better off than if they had waited to deploy.
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Phil,
you left one of the AMEX "improvement" to brokerage accounts off your list (although it probably doesn't affect most Fools) - AMEX also upped the cost of telephone trades from $44.95 to $75.00. As a customer of AMEX I've already sent my letter of complaint to the VP who signed the letter spinning this change as an "improvement" to clients. In addition to clearly degrading the features of brokerage accounts they're abusing their own intellegence and insulting their clients' intelligence by making such outrageous claims (ie. that this is an improvement for clients). Shame on AMEX.
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I do not have an account with AmEx. I do have an account with MorganStanleyDeanWhitter (formerly Discover). They did a similar fee increase last year. It caused such an uproar that they have delayed implementation of the higher fee structure to existing account holders. Every time I get close to the date when the fees will go up for existing accounts, I get an email stating that they are delaying the increase.

If enough people complain, AmEx may change their plans also.

BTW, If and when the higher fees take effect at MSDW, I am gone. The irritating part is that my account there is an IRA and they charge a closing fee for IRA accounts.
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<< What's your opinion on the recent changes instituted to American Express Brokerage's fee structure? >>

Forgot this option: TANSTAAFL

http://usmcug.usm.maine.edu/lists/issues-l/0004.html


Washu! ^O^
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<<But I will not do business with American Express again. By the end of the year I will have washed my hands clean by removing any traces of contact with the company - the brokerage transfer is already in progress, the Blue card is cancelled. I haven't sold the stock simply because I haven't gotten around to it (though that will definitely happen before 10/30!>>


I agree with you completely!!!

Unlike yourself, I was getting the free sells too. I have an AmEx IRA account and a regular brokerage account. Of course, I need to do limit orders to avoid overspending on a trade.

I'm checking now to see if I can get a better deal elsewhere, but I think the economics will be in favor of leaving the accounts stay.

I'm inclined to move the accounts anyway because of what AmEx is doing and how they went about it!
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I find it hard to believe that AmEx customers are favoring the new trading rules 20:1!
I don't trade too frequently, but almost always place limit orders. I think something like 30
free trades/month would be more reasonable.
How can we flood AmEx with email expressing our displeasure?
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What's your opinion on the recent changes instituted to American Express Brokerage's fee structure?

Count me as another one that didn't particularly like the options available in the poll, simply because I would have liked to choose more than one (probably 1,4, and 5).

I had just recently consolidated two brokerage accounts and one DRP account together into one account at BUYandHOLD.com, and the size of the combined accounts would have qualified me for some free trading at AMEX. I was just starting to do my preliminary research on them when I ran across a slew of angry customers over on the Discount Brokers board. Depending on how you look at it, I could see how some would think this would be a "bait and switch". Once you offer your customers a benefit for free, if you ever decide to take it away you are going to be put through the public relations wringer ... regardless of the actual increase in cost to your customers. Some will switch to another brokerage, but most will stay just because its a pain in the butt to keep moving your accounts from place to place. However, I think AMEX could save a lot of face by simply coming out and being honest with everyone about why they raised their prices, and if other raises are possible in the near future. Until that happens, people like myself are going to be somewhat suspicious of management and their intentions.

The only reason I would have moved to AMEX was for the free trades (hmmm ... commodity business, not exactly Rule Maker material if you asked me), so without those I have no real desire to use them. Now that I've heard many of the customer no-service horror stories about account transfers (or lack thereof), I'm probably glad I didn't.

Anyway, that's my two cents on the matter.

the LanceMan
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I too am unhappy about the changes that AmEx is making to their fee schedule; however, I was expecting it. Before I opened an account there, I asked my full service broker to match their trade fees (free) so he called them and asked how they were going to support free trades. This was last February. He was told that they expected to fund the trades by the margin fees and additional services they sold to their new clients. Also they planned to raise the fees later. So I guess we have arrived at later.

I agree that I always thought that the possibility existed that the trades wouldn't be free forever. There are, however, other ways to make money than commissions. There's the bid/ask spread, margin interest, other services, the difference in interest rates for cash balances vs. debts, etc. My view is that the although I don't see them affecting me all that much (other than it being much less likely that I'll transfer other accounts there) the changes that were made were much more drastic than I'd imagined them to be.

Your point about limit orders is well taken. Typically, I make trades real time, so there's less need for limit orders to control things. But, unattended trades like you're talking about can be a different story. The only drawback that I've found in the past is that there were times that my limit order kept me from buying a stock that never hit my price (ever). In those cases in the long run it would have been worth sacrificing the extra per share charge to have made the purchase.

Keep up the good work of generating thoughtful, well researched and written articles to stimulate readers of so many levels of investing experience.

Thanks for the kind words.

Phil
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Phil, Phil, Phil.....sounds like sour Grapes to me.

Just curious as to why you think that. I thought I made it pretty clear in the article that other than thinking twice about moving other accounts there, the changes would most likely have no impact on my current account. The point was to focus on what insights this could give into the company's decision making process and its management team.

Phil

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As a stock holder you should be happy they are now charging a fee. We are the people who will profit in this change of policy.

We do benefit provided that they don't lose customers or potential accounts from the change. From what I've read here both of these reactions are happening.

We also benefit if the fees they generate from the new structure outweigh what's lost in terms of revenues lost from the above. That's one that can't be answered yet.

It seems to me that there's a happy medium somewhere that would work better than what's been proposed.

Phil
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Unbelievable!!!

I opened an account about 5 months ago. I fall in the above $25k/under $100k range. AMEX quickly became somewhat of the center of my financial world (with TMF as it's placid orbiting moon gently pulling the tide of my portfolio up the white sand beach that fronts my dream summer home in ... wooo, got a little carried away there). I consolidated my other brokerage accounts into this one, I re-routed my direct-deposit paychecks here, I began paying bills online here, and began using the account's checking and ATM services. Now that I'm moved in and comfortable ... knock-knock-knock ... who's that? The cranky landlord who thinks his property has suddenly become undervalued. He's going to raise the rent hoping inertia and familiarity will keep me where I am. This dump isn't that nice.

What else can be expected from a credit card company? This ranks up there with Bank One's scam of last year. Look what that bit of PR did for them. I know well enough, I unfortunately own some shares. The irony of this comes in the form of Wisdom. How many went to AMEX looking for the financial services these fee increases are designed to provide anyway? If others are looking for financial advice and other premium services, make them sign up for it and pay. I'm just looking for a cheap place to buy and sell with Limit orders.

I hate to say it, but this could reflect badly on TMF too. I went to AMEX on their referral. AMEX basically got to me as a Wolf in Fool's clothing. And now it reflects badly on me for referring family and friends. If this goes through, I expect TMF to, at the very least, sell it's AMEX Rule Maker shares in a very public way. I quote from the RM Report "When to Sell a Rule Maker" (6/6/00): Some of the "Line of Death" reasons to sell a Rule Maker: 1.Crooked Management. If Bait & Switch isn't crooked business, what is? Better yet, I would like to see TMF use it's leverage as AMEX ad space to make them reconsider this huge mistake.

[Originally posted on the Rule Maker Strategy board, but this is obviously the more appropriate place.]
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Some will switch to another brokerage, but most will stay just because its a pain in the butt to keep moving your accounts from place to place

Or they will stay because AMEX charges a $50 transfer fee :-(
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I'm disappointed on a number of fronts. The policy has the appearance of being a 'bait & switch' manuver. I have one small account with them which I opened to 'test' their service. I was planning to bring in my big accounts to take advantage of the free trades. I've now cancelled that thought and am strongly considering closing my existing account. It's simply bad business. I hate doing buisiness with such individuals/companies.
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There are not enough choices in this poll. I'm reassesing my relationship with American Express. I won't move my account untill I see something I think will work better. But I am actively looking. I just heard about thefinancialcafe.com. Might be what I'm looking for, at least for a portion og my funds. I will be carefull to see in the future that AXP will make very little money off of our relationship because I am very angry with them over this. I guess I'll vote the distrust option but I will probably do more than that.

Peter B
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My impression from your article about American Express's change in their fee schedule is that you are a "whiner", and somewhat juvenile in your view of business and the market place.


Did we both read the same article? I'm afraid I don't see much in TMFGrape's column that warrants the "whiner" accusation. I thought he did a good job of objectively describing the situation, plus providing us with some motives that might have prompted management to alter the original policy.

As for being "juvenile in [his] view of the marketplace", I don't see that as an accurate assessment of his work either. What is wrong with expecting a corporation to be upfront with their customers? KO was dragged over the coals when they weren't upfront with their customers about the bottling problems in Belgium, just as AMEX is now. Many feel that the way AMEX marketed their "free trades" was misleading because they didn't state upfront that certain parts of that were for a "limited time only". In some ways, its kind of like seeing an advertisement in the newspaper for a new car at one price, yet when you get to the dealership it actually costs a considerable bit more. I would hope as a Rule Maker investor that the companies I invest in would be above such "used car salesman" tactics ... which are definitely juvenile in my book. We should simply expect more that that.


The customers will decide whether this new fee schedule is successful or a mistake. Get a life!

Well, last time I checked, TMFGrape and the Rule Maker portfolio was a both a AMEX brokerage customer and a AXP shareholder, so it would seem that he is expressing his concerns for the company's management from those points of view. As an owner of the company, I would hope that the portfolio managers would make their concerns known to management, since it is management that works for the shareholders, not vice versa. Simply dismissing our obligation to "keep management in line" would be a recipe for disaster, in my opinion.

Ultimately, the economics of the situation will determine if this was a good move by company management:

1) How many accounts transfer out because of the change?
2) What is the PR damage to AMEX as a result of the move?
3) How does all this impact the bottom line earnings?

The decision on whether the Rule Maker portfolio should continue using their brokerage service and/or hold shares of AXP going forward should be good fodder for at least a couple of Rule Maker daily columns, I'm sure.

Fool On!

the LanceMan
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From where I sit, this policy change was just one more example of AmEx screwing up its brokerage business. When they announced their "free" trades policy, they literally had no idea of the kind of response they would get. They were swamped with customers, and were totally unprepared. It was a customer service disaster.

Since then, they've hired lots more customer service reps, and taken other steps to get their act together. But I had an AmEx Brokerage customer service rep admit to me on the phone (after they messed up for the umpteenth time on my account) that their service levels were still far below AmEx's own standards of service.

I don't have a problem with AmEx curtailing the number of free trades an account can place in a month. Their ceiling, frankly, is pretty generous for buy-and-hold investors.

But I have a huge problem with the fees placed on limit orders. Nearly all my trades are limit orders. When I place a limit order, I know exactly how much I'm putting on the line. A market order -- particularly in a volative market -- doesn't do that. Instead, it creates the risk that the market will move against me, and that I'll end up buying or selling at unfavorable terms.

And I may be mistaken here, but it seems to me that a market order provides much greater opportunity for my broker to profit at my expense than a limit order provides. Someone tell me if I'm wrong -- I'd hate to think American Express is treating me as just another rube to be fleeced.

I spoke to an AmEx Brokerage customer service rep recently about these changes, and about the limit order change in particular. The perspective he could share with me was that limit orders are more expensive to place than market orders, and that a lot of limit orders never get filled -- but the costs get incurred just the same, when the order is placed.

All I can say is that my experience (over 20 years in self-directed brokerage accounts) is that more than 80% of my limit orders get filled. AmEx must be targeting customers who invest very differently than I do. There's a great deal of room for them to be creative in pricing trades in a way that rewards the customers they want to keep (and I think I'm in that group of people), while penalizing customers they don't want to keep.

So overall, I would say that AmEx Brokerage has been fairly inept in their execution, as well as their understanding of the brokerage services marketplace they're competing in. And this latest twist is just more of the same.
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I ALWAYS PLACE A LIMIT ON MY TRADES. I HAVE A FAIRLY SIZABLE ACCOUNT THERE, BUT THEY HAVE A HIGHER COST THAN msdw-ONLINE NOW. I WILL PROBABLY EVENTUALLY MOVE MY ACCOUNT FROM AMEX. FREE TRADES WERE THEIR ONLY ADVANTAGE. I JUST CAN'T DECIDE WHERE TO GO. MSDW HAS A GOOD WEB SITE AND GOOD IPO'S. THEY RARELY LET ME IN ON THE RED HOT ONES. TD WATERHOUSE HAS A VERY CONGESTED WEBSITE AND IT'S A DAY BEHIND ON BALANCES ETC.
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How about asking some other equally pertinent questions like:

- I don't want nutty day-traders fleecing AmEx's business

- I am a long-term buy and hold Fool and think the pricing structure is pretty sound for a sensible investor like me

Or have all decided to throw our toys out of the pram because a company decided to take some affirmative action?
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I have had an account for almost 10 years with an AMEX financial adviser--VERY happy with the results. I just started buying individual stocks in past 2 years, with AMEX brokerage. I was thrilled with the then new price structure, for my occ. purchases, almost always limit orders. This change sure feels like bait-switch to me. I would like to know where else is convenient and reasonably priced, that a relatively new Fool would feel comfortable. Any rec. from some of you who have switched recently because of AMEX's unfair changes? Thanks, Frankie.
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Frankie--

Some people will snicker about the high cost of Schwab but I use it and since I only buy twice a year for my IRAs it is not that bad of a price. They are always very helpful, have free advisors if you need them and they offer web, phone and in person trades. They also call when you make changes to your accounts to make sure everything is what you want before they set it up. I set up an auto transfer for monthly amounts and they called twice to make sure that they had the correct checking account number and that the dollar amount was correct. I also receive statements each month which is better than Fidelity which has my 401k money and I can't remember when I received a statement last. Fool on.

Matt
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I've been upset w/AE since last Jan. when I opened my account. First they combined my accounts w/my parents, they lured me over w/$100 cash and still haven't paid, and then my IRA contribution was credited for the wrong year. In the meantime, I changed addresses and that made a chain reaction that affected my parents address and local representative. It took their local rep to staighten it out. I've been trying to convert a reg. IRA to a Roth w/ another broker and it's a mess. The online stock buy was easy but customer service gets a D+. Their change in fees adds fuel to the fire. I wonder if they can do my charity gift of stock correctly before year end.
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