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I'm looking for a brokerage firm where I can buy stocks (large cap div. payers) and have the firm reinvest the dividends. Right now the funds are in Morgan Stanley. They want to run the money but I don't like their platform. Too expensive. I have TD ameritrade, and etrade now. Like to know what the board thinks
I don't care for E*Trades idea of customer service so I dropped them years ago. I switched to Scottrade for the $7 trading fee but they don't reinvest dividends in individual equities. I can't see paying TD Ameritrade a $10 trading commission when Fidelity will perform the same service for $7.95. There is a lot to like about Fidelity.
Most of our assets are held at Wellstrade (WT) because of their 100 free trades/year for qualifying accounts. You may link a qualifying retirement account with a non-qualifying taxable account, so that you get 100 free trades for each account. And I have been able to link my qualifying account with the non-qualifying accounts of my 7 children, so that they each may have 100 free trades/year. Also, there is no WT short-term trading fee other than those required by mutual funds. And they do reinvest dividends for stocks, OEFs, and CEFs on request.
However, since opening our accounts, Wellstrade has provided consistently very poor service. If you want them to carry a new mutual fund, forget about it. They will if they want to and definitely NOT because you want them to. With transfers in and out of WT, you need to fax the required documents, and then call them to make certain that everything is in order. If something is not right with your paperwork, they will not call or contact you -- at least that is my experience. I have become accustomed to their poor customer service, which is at least consistent. I guess that is a positive if you squint your eyes.
We also have smaller accounts at Fidelity, Scottrade, TOS/TDAmeritrade, and Firstrade for access to specific attractive mutual funds which are not available at WT. Fidelity has the absolute best service in the business IMO, but they also have the almost the highest costs. The customer service and costs at the other three brokerages are excellent. Please note that we had a Thinkorswim (TOS) account before they were gobbled up by TDAmeritrade, so we are grandfathered into the very reasonable TOS fee schedule: $15 for sale or purchase of non-NTF funds, and no short-term trading fees other than those specified by the mutual funds.
I really wish I could consolidate all of our assets in one brokerage, but so far that's a no-go.
Etrade has dividend reinvestment. Mediocre customer service (fine one time, not great the next), but they do have pretty easy dividend reinvestment. Ameritrade has terrific customer service, but not as easy dividend reinvestment (when it comes to stocks.) Some stocks do not offer dividend reinvestment, but there's no way to know (most ADRs/foreign stocks don't, but some surprisingly do, some US stocks don't, etc.)
Hi guys, thanks for the input. I've thought that Fidelity was too expensive with their 75.00 mutual fund fee. Why would you pay them 75.00 when you can just buy the fund directly for nothing? I think i've seen here that Vanguard brokerage is not that friendly. I guess I'll make some calls next week. Thanks again
Reply to @tip: $75 is for TF funds when you purchase but there is no fee for sales. So, if you liquidate your position in one go or 10 pieces the total fees paid is still $75. Other brokerages charge fees for both purchase and sales of fund shares. In some cases Fidelity can be cheaper. For example, a retiree buys a big fund position in a TF fund and liquidates some portion each month/quarter for income, Fidelity will be the lower cost brokerage.
Reply to @tip: You are getting excellent feedback from the board contributors here. Bear in mind that depending on your needs it is not easy to find a single brokerage that provides A+ service in all categories.
We use Fidelity for many years: excellent service, ease of use website, reasonable fee on Transaction-fee funds, free trading on iShares ETFs, and many more. The $75 transaction fee allows you to buy into institutional mutual funds with smaller initial investment that the typical $1 million. Outside of Fidelity you will be expecting to meet the $1 million minimum.
At the same time we also use Vanguard to supplement what Fidelity lacks: Vanguard's low cost index funds and free trading on Vanguard's ETFs. Although their website is not as user friendly I consider this a minor issue.
Reply to @tip: As investor said, the $75 fee is only for funds that for which there is a fee. I have never had a problem finding equivalent funds that are NTF at Fidelity, i.e. No Transaction Fee. I use Fidelity for long term mutual fund investments and for short-term trading in individual stocks and ETFs. At $7.95 per stock/ETF trade, commissions are not a factor in my individual stock/ETF decisions.
I believe Schwab reinvests dividends for stocks too, but not 100% sure. $8.95/trade. They also have one of the most (if not the most) number of NTF mutual funds. I used to be at WellsTrade, but have since switched to Schwab and have been very happy with the features and service.
If you want to invest in ETFs, you should also take a look at the no-commission ETFs now offered by Fidelity, Schwab, Ameritrade, etc. Each one has a different list.
More on Fidelity's $75 transaction fee - as Investor and others have mentioned it is a one-shot, buy in fee. There are no fees for selling the fund. From what I understand Schwab charges a fee going in and out which together equals or exceeds Fidelitys fee. Scottrade charges $17 on all buys and sells in a TF fund. Akso, depending on the size of your investment amount these fees may or may not be considered onerous.
Then there is the problem with fund availability. You may not find the same fund, or even the same fund share class, at all of the various brokerages. Where this is of interest is that at Fidelity I have been able to buy into the institutional share class of funds which often have minimum initial purchase amounts exceeding $1 million for a nominal pittance of $2500 or more. Just something to think about.
Lastly in some cases where the brokerage firm carries the fund you're interested in but charges a TF for you to buy in, I've often bought the fund directly from the fund company and then after a period of time had the fund shares transferred over to Fidelity. Yeah, a mickey mouse pain in the patootie but it works.
All in all, no one firm will probably offer everything you're looking for and you will have to decide how much you're willing to do to work around the holes in their systems.
Reply to @Mark: Schwab and Fidelity generally take great pains to mimic one another (with Schwab usually charging $1 more). That goes for TF funds as well. Schwab recently changed its fee structure so that it charges $76 going in, $0 for sales. And they both dropped their hold period for NTF funds to 90 days from 180.
As you note, one area of difference is fund availability. Schwab waives not only the transaction fee but the load on a variety of funds. For example, in my post on midcap value funds, I mention Victory and JPMorgan funds (load funds, but available at Schwab NTF/NL).
Both brokerages offer some access to (often different) institutional class funds with reduced minimums.
Fidelity does offer a back door to purchasing additional shares of a TF fee fund for $5 (via their automatic investment plan with a one-time trade) that I don't believe Schwab offers. This makes the game of buying directly from the fund and then moving it to the brokerage worth the effort at Fidelity, but not at Schwab.
So there are differences in availability - I tend to think that Schwab does a significantly better job of making funds (including load funds) available NTF, while Fidelity is better for holding funds where you can't avoid the transaction fee.
the first sentence of the original post asks for a place to purchase individual stocks and reinvest dividends. while his current brokers can all do it, i agree with the majority that fidelity's transparency, ease of use, and investor friendliness make it a good choice. there is no $75 or any other fee for purchasing stocks and reinvesting dividends, only $7.95 commission for each purchase or sale.
I've just finished setting up a brokerage account with Schwab. Wanted to wait until it settled before commenting. So far, so good. Seems like a place with decent people, good service, very good internet setup, and reasonable charges.
Thanks again for the comments. My wife has a Vanguard act now. It's invested in funds now. The plan was to move funds from a full service broker to Vanguard or some other house to buy dividend paying blue chips and reinvest the dividends. I talked to Vanguard and they said, no problem. Also said trades would be 2.00. Ameritrade also said I could do this. Fees I think were 20.00 per trade. The reason I posted this, I thought the board had some issues with Vanguards brokerage service.
Comments
Most of our assets are held at Wellstrade (WT) because of their 100 free trades/year for qualifying accounts. You may link a qualifying retirement account with a non-qualifying taxable account, so that you get 100 free trades for each account. And I have been able to link my qualifying account with the non-qualifying accounts of my 7 children, so that they each may have 100 free trades/year. Also, there is no WT short-term trading fee other than those required by mutual funds. And they do reinvest dividends for stocks, OEFs, and CEFs on request.
However, since opening our accounts, Wellstrade has provided consistently very poor service. If you want them to carry a new mutual fund, forget about it. They will if they want to and definitely NOT because you want them to. With transfers in and out of WT, you need to fax the required documents, and then call them to make certain that everything is in order. If something is not right with your paperwork, they will not call or contact you -- at least that is my experience. I have become accustomed to their poor customer service, which is at least consistent. I guess that is a positive if you squint your eyes.
We also have smaller accounts at Fidelity, Scottrade, TOS/TDAmeritrade, and Firstrade for access to specific attractive mutual funds which are not available at WT. Fidelity has the absolute best service in the business IMO, but they also have the almost the highest costs. The customer service and costs at the other three brokerages are excellent. Please note that we had a Thinkorswim (TOS) account before they were gobbled up by TDAmeritrade, so we are grandfathered into the very reasonable TOS fee schedule: $15 for sale or purchase of non-NTF funds, and no short-term trading fees other than those specified by the mutual funds.
I really wish I could consolidate all of our assets in one brokerage, but so far that's a no-go.
Kevin
We use Fidelity for many years: excellent service, ease of use website, reasonable fee on Transaction-fee funds, free trading on iShares ETFs, and many more. The $75 transaction fee allows you to buy into institutional mutual funds with smaller initial investment that the typical $1 million. Outside of Fidelity you will be expecting to meet the $1 million minimum.
At the same time we also use Vanguard to supplement what Fidelity lacks: Vanguard's low cost index funds and free trading on Vanguard's ETFs. Although their website is not as user friendly I consider this a minor issue.
If you want to invest in ETFs, you should also take a look at the no-commission ETFs now offered by Fidelity, Schwab, Ameritrade, etc. Each one has a different list.
Then there is the problem with fund availability. You may not find the same fund, or even the same fund share class, at all of the various brokerages. Where this is of interest is that at Fidelity I have been able to buy into the institutional share class of funds which often have minimum initial purchase amounts exceeding $1 million for a nominal pittance of $2500 or more. Just something to think about.
Lastly in some cases where the brokerage firm carries the fund you're interested in but charges a TF for you to buy in, I've often bought the fund directly from the fund company and then after a period of time had the fund shares transferred over to Fidelity. Yeah, a mickey mouse pain in the patootie but it works.
All in all, no one firm will probably offer everything you're looking for and you will have to decide how much you're willing to do to work around the holes in their systems.
Schwab and Fidelity generally take great pains to mimic one another (with Schwab usually charging $1 more). That goes for TF funds as well. Schwab recently changed its fee structure so that it charges $76 going in, $0 for sales. And they both dropped their hold period for NTF funds to 90 days from 180.
As you note, one area of difference is fund availability. Schwab waives not only the transaction fee but the load on a variety of funds. For example, in my post on midcap value funds, I mention Victory and JPMorgan funds (load funds, but available at Schwab NTF/NL).
Both brokerages offer some access to (often different) institutional class funds with reduced minimums.
Fidelity does offer a back door to purchasing additional shares of a TF fee fund for $5 (via their automatic investment plan with a one-time trade) that I don't believe Schwab offers. This makes the game of buying directly from the fund and then moving it to the brokerage worth the effort at Fidelity, but not at Schwab.
So there are differences in availability - I tend to think that Schwab does a significantly better job of making funds (including load funds) available NTF, while Fidelity is better for holding funds where you can't avoid the transaction fee.
I believe NTF holding period at Fidelity is 60 days. It used to be 180 days at Fidelity.
You are absolutely right. I stand corrected.
The short term fee period for Schwab, however, really is 90 days.