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cheap online brokerage(8 posts)

cheap online brokeragemr_spin
Dec 2, 2002 9:39 AM
Anyone know of an online brokerage that doesn't charge "account maintenance" fees? I have stock I plan to hold for a while, but my broker just announced that it will cost $25 a quarter for them to do nothing for me. A quick look around shows that this is not unusual. All I want is a cash account I will only use once (to sell) that won't cost me anything except trade fees. Am I dreaming?
SiebertTJeanloz
Dec 2, 2002 9:59 AM
It of course depends on how much you hold (i.e. size of your account), but keep in mind what you're asking the broker to do- hold an account open for you for an indefinite period of time (which requires expense on their part), in the hopes that someday, you will make one trade with them. You are not their ideal customer.

That said, Mickey Siebert is probably the best discount broker for this situation- I don't think she charges a maintenance fee, regardless of account size.
Go to the companymoneyman
Dec 2, 2002 10:25 AM
Ask if they have a program that will allow them to hold your shares. If you are not concerned about a timing issue, that is by far the cheapest way to go. Otherwise, put them in your safe deposit box. If you do that, you MUST keep current on any mergers, acquisitons, name changes, splits or other changes to the company that may affect your ability to make good delivery on the certificates when you want to sell.

You're NOT a good brokerage customer, even for the online folks. No slam against you, but an account like yours is high maintenance and high liability, with (essentially) no return on investment for the firm. And they ARE doing something for you. All that stuff you have to keep current on? They do that, as well as send you quarterly statements, calculate your cost basis, direct proxy statements and reorganization notices, as well as have a broker acccept responsibility to keep your account current and in compliance with the host of federal and state regulators overseeing the account. I could tell you lots of stories about people who held their own shares, did not keep current, and ran into significant roadblocks when it came time to deliver the shares.

The $25/quarter fee is there as much as to discourage your account as it is to pay for the costs associated with it. Personally, if you were to approach me with your dilemma, I would steer you towards the company direct option.

$$
then what?mr_spin
Dec 2, 2002 12:43 PM
If I own the certificates, how do I sell them? I've always wondered that because a former company sent me 20 shares of a stock in the mail one day as a bonus. The stock has since split, in fact. I would love to deposit these in an account, but given that they are now worth about $1500, I don't know if I want to send these through the mail.
then what?moneyman
Dec 2, 2002 1:49 PM
To sell them - Walk into a brokerage office and tell them you want to sell them. I was under the assumption that you wanted to deposit them and then hold them for a while. If that's the case and you are asking how to sell them when the company holds the shares, then its a bit different. Once you call the company and tell them you want them to hold the shares, they will give you mailing instructions. Don't endorse the shares, because that is like sending cash in the mail. Not a good idea. Generally, they will have you send them via registered mail or an insured carrier (FedEx, UPS, etc.) with a stock power. Once the shares are deposited, you can sell them when you would like by sending the company the appropriate form, available from them. The downside to this is that typically you don't get to tell them at what moment you would like to sell. They take all the shares that shareholders want to sell and then sell them all at once at the end of the month. If you send in your sale request on the 10th, they may not get sold till the 30th. Who knows what happens in between. There is generally no fee to sell the shares, although that can vary from company to company.

If you want to sell them RIGHT NOW, its a bit different. If you live in a large city, find a Fidelity or Schwabb or Waterhouse office nearby. Go there and tell them you want to sell them. They should open a new account for you and sell them on the spot. If you don't have one of them nearby, see if your bank has a brokerage office inside. If so, go in there and tell them what you want to do. Bank brokers tend to be less picky when it comes to new accounts and are pretty much desperate for whatever business they can get. They should charge you about $45 - $50 to do the trade. A small price to pay considering the work you won't have to do.

Selling the stock is a bit of a hassle, but remember what it is you have - ownership in a publicly traded company, not a savings account. E-me at mattnp2 AT earthlink dot net if you want more help.

$$

(For the record, this is my livelihood. I do not take accounts under $100,000 and all my accounts are fee based asset management accounts. I don't trade.)
What are the advantages here?TJeanloz
Dec 2, 2002 2:05 PM
I understand what you're telling him to do. And I understand the situation pretty well. But what are the advantages to getting the stock certificates yourself, holding them (and 'maintaining' them) yourself, as opposed to having a no-fee discount broker like Muriel Siebert hold them in street name? It seems like your solution, while technically feasible, is a lot more complicated, and costly, than simply opening a no-fee brokerage account.
What are the advantages here?moneyman
Dec 2, 2002 2:53 PM
There aren't really any. The reason he might want the company to hold the shares is because the online brokerage may not open an account for $1,500. I don't know about Siebert. If they will open an account for him, fine. But I don't know. Most of the firms I am familiar with will open accounts for $5,000 or more. I don't think my solution is either complicated or costly. It jsut depends on what he wants to do with the shares - sell them now or later.

OK - I just looked up Siebert and they will open an account for no minimum. That would be a simple solution. A trade with them costs $15. If he walks to his bank and sells his shares for $45, it cost him $30 for the convenience of letting someone else do the paperwork. If the additional work is worth it, he should save $30 and go online.

No argument here. He should do what he feels most comfortable with.

$$
What are the advantages here?mr_spin
Dec 2, 2002 3:05 PM
Just for the record, I have two questions going here. I have an existing brokerage account with about 8,000 shares of a stock that I have been holding for over two years. It was at Robertsen Stephens, which didn't charge me anything, but they merged with Quick & Reilly, who wants to charge me fees. I took TJ's advice and opened an account at Siebert, and will transfer the shares in kind.

I also own stock certificates for 20 (40) shares of another stock. I've owned these for over 10 years now, mainly because I wasn't quite sure what to do with them. That was a wise move, because even in this current economy, not all tech stocks are doing poorly. They've been sitting in my file cabinet all this time, so I would love to get them into the same Siebert account as above.

Your idea about having the company holding them is interesting, but it sounds too inflexible to me.