Moving your money to a 401(k) plan elsewhere. [Archive]

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FordMan

11-24-2007, 07:14 PM

Here's a link from WSJ showing brokers want 401K accounts with over $100K balances. (that's right only $100K and you're in). So it looks like FEDS might be real attractive.

http://online.wsj.com/article/SB109036444613069139.html?mod=todays_us_personal_j ournal

Wall Street Targets
Retiring Boomers

Fidelity, Merrill, Others Launch
Services Aimed at Managing
Funds Withdrawn From 401(k)s
By RUTH SIMON
Staff Reporter of THE WALL STREET JOURNAL
July 21, 2004

Financial-services firms are rolling out new products and services aimed at a lucrative target: the trillions of dollars sitting in baby boomers' retirement accounts.
The money sitting in 401(k)s and similar retirement accounts is particularly attractive. As the oldest boomers begin to retire, their options include leaving their money in their current company-sponsored retirement plan, taking a cash distribution or rolling it over into an Individual Retirement Account.
The competition for that money and boomers' other retirement assets is creating new offerings -- and potential pitfalls -- for people planning their retirement. Last month, Fidelity Investments introduced Fidelity Retirement Income Advantage, a service designed to help boomers plan for, monitor and manage their finances as they make the transition from saving for retirement to living in retirement. The service is free until early next year.
Two weeks after Fidelity's announcement, Massachusetts Mutual Life Insurance Co. announced the creation of a new "Savings Product Division" that will develop products and services aimed at the 76 million baby-boomers who will begin retiring during the next five years.
RETIREMENT BOOM

• By 2008, 401(k) rollovers could nearly double to as much as $300 billion a year.
• Merrill Lynch is urging brokers to earn professional designations as specialists in retirement benefits and planning.
• Vanguard introduced a service this year aimed at investors rolling over at least $100,000 in assets.

See a chart (http://online.wsj.com/article/SB109036444613069139.html?mod=todays_us_personal_j ournal#CHART) listing pros and cons of different options for your retirement savings.
THE JOURNAL REPORT: 401(K)

What you should know (http://online.wsj.com/article/SB108990931470264800.html?mod=Retirement-Planning) about rolling over your 401(k). Plus, what's next for your nest egg, and more (http://online.wsj.com/page/0,,2_1096,00.html).

Brokerage houses also are stepping up their efforts. Early next year, Merrill Lynch (http://online.wsj.com/quotes/main.html?type=djn&symbol=mer) & Co. plans to introduce the "Retirement Paycheck Service," designed to help people near or entering retirement manage their investments and cash flow. With the new service, investors can create a financial plan, choose investments and manage withdrawals.
Some of these efforts are aimed at winning over the assets by simplifying the rollover process itself. Vanguard this year introduced a free service aimed at investors looking to roll over at least $100,000 in assets. Under the program, Vanguard retirement advisers handle all the rollover paperwork and provide investors with a personalized retirement portfolio analysis that includes recommendations for specific Vanguard products. T. Rowe Price Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=TROW) says it can handle most rollovers with a single phone call and will get an investor's old employer on the phone to take care of any wrinkles.
Many firms are beefing up their staffs of in-house retirement experts. During the last year, more than 500 Merrill brokers have earned professional designations as specialists in retirement benefits or retirement planning. Morgan Stanley (http://online.wsj.com/quotes/main.html?type=djn&symbol=mwd) says more than 4,000 of its brokers have received financial-planning training this year that includes a focus on retirement planning.
Investors need to keep a watchful eye out for marketing gimmicks and products such as annuities that may carry high expenses or limit their flexibility down the road. "I see a lot of people in retirement running off to these retirement advisers, who put them in complicated stock and bond products when probably all they needed is three mutual funds," says John Markese of the American Association of Individual Investors.
The heightened focus on boomers' retirement needs is being driven by demographic and economic trends. Next year, the oldest boomers will turn 59½, the age at which they can begin tapping their tax-deferred retirement accounts without penalty. They'll need to make this money last for decades: The average 60-year-old can expect to live for 22 more years, according to the National Center for Health Statistics.
This year, TD Waterhouse Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=TD) launched its first print and television ad campaign focused specifically on rollovers. The online brokerage is also testing more novel approaches, such as sending direct-mail pitches for its rollover services to people who have filled out a change-of-address form with the U.S. Postal Service. Waterhouse says its rollover deposits are up 44% this year from last year.
Another approach is interactive tools and educational programs. This spring, T. Rowe Price introduced a free interactive CD-ROM, "Rollover Planner," that helps investors sort through their rollover options and explains the firm's rollover services and investment options. The fund company says it is sending thousands of the rollover kits to investors each month.
Fidelity, meanwhile, says more than 7,500 investors have attended retirement-income planning seminars it began offering around the country this year. The company's new Retirement Income Advantage program includes tools that allow investors to model what will happen to their retirement finances under different scenarios. The planning service is free until early next year, after which clients with less than $100,000 in assets will have to pay a one-time $500 fee to work with an income-planning specialist.
Fidelity's program also includes an "Income Management Account" that lets investors measure the performance of their investments against their plan and create a pension-like monthly income from different pools of money. That service is free to customers with at least $30,000 in assets.
Firms are also coming up with new products intended to meet their needs for retirement income. Last year, Principal Financial Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=PFG) introduced a new rollover IRA that allows investors to gradually shift their investments from funds to income-producing annuities over time.
Principal also is adding two new products that use annuities to help investors manage cash flow. One of these, the Principal Income Manager, allows investors to transfer annuity payments they don't currently need to a tax-deferred Principal Bank IRA money-market account.
This summer, MassMutual will begin offering funds used in the 401(k) plans it administers to individual investors saving for retirement. Later in the year, it plans to introduce a program that gathers funds, annuities and financial tools into a product that will enable clients and their financial advisers to develop a retirement income plan and then monitor it.
Fidelity, meanwhile, is working on adapting its Freedom funds for retirees. These targeted funds currently provide a mix of stocks and bonds that adjust over time and are aimed at people who expect to retire at a certain date, but also can be adapted to meet the needs of investors already in retirement, the company says.
Where to Put Your 401(k) Money

Workers who retire or change jobs have several choices when it comes to the money in their 401(k) plan. Here's a look at the pros and cons of each option.
Option Pros Cons Leave money in old 401(k) Savings continue to grow tax-deferred. May provide greater protection from creditors than an IRA. Limited to investment options in current plan. Could be more expensive, depending on plan's cost. If changing jobs often, could wind up with multiple accounts. Roll over into an Individual Retirement Account Typically provides more investment options, greater flexibility on withdrawals and more control over costs. Growth in savings continues to be tax-deferred. Can consolidate multiple accounts. Have to decide where and how to invest and arrange for money to be moved. If changing asset mix, run risk of investing all money at one time. Move money into new employer's plan Fewer accounts to monitor. May be able to borrow against balance. Investment choices limited to those provided by new employer. Savings continue to grow tax-deferred. May provide greater protection from creditors than an IRA. Costs may be higher. Cash distribution Provides immediate access to your savings. Reduces your chances of saving enough for retirement. Payout is subject to taxes. You may face 10% early-withdrawal penalty if younger than 59 1/2.

James48843

11-24-2007, 07:27 PM

This is a thread about options to move your money to a 401k style plan elsewhere, other than the TSP.

RAE

11-24-2007, 08:34 PM

FordMan

11-24-2007, 09:58 PM

This is a thread about options to move your money to a 401k style plan elsewhere, other than the TSP.

Wall Street Targets
Retiring Boomers

Fidelity, Merrill, Others Launch
Services Aimed at Managing
Funds Withdrawn From 401(k)s
By RUTH SIMON
Staff Reporter of THE WALL STREET JOURNAL
July 21, 2004

Financial-services firms are rolling out new products and services aimed at a lucrative target: the trillions of dollars sitting in baby boomers' retirement accounts.
The money sitting in 401(k)s and similar retirement accounts is particularly attractive. As the oldest boomers begin to retire, their options include leaving their money in their current company-sponsored retirement plan, taking a cash distribution or rolling it over into an Individual Retirement Account.
The competition for that money and boomers' other retirement assets is creating new offerings -- and potential pitfalls -- for people planning their retirement. Last month, Fidelity Investments introduced Fidelity Retirement Income Advantage, a service designed to help boomers plan for, monitor and manage their finances as they make the transition from saving for retirement to living in retirement. The service is free until early next year.
Two weeks after Fidelity's announcement, Massachusetts Mutual Life Insurance Co. announced the creation of a new "Savings Product Division" that will develop products and services aimed at the 76 million baby-boomers who will begin retiring during the next five years.
RETIREMENT BOOM

• By 2008, 401(k) rollovers could nearly double to as much as $300 billion a year.
• Merrill Lynch is urging brokers to earn professional designations as specialists in retirement benefits and planning.
• Vanguard introduced a service this year aimed at investors rolling over at least $100,000 in assets.

See a chart (http://online.wsj.com/article/SB109036444613069139.html?mod=todays_us_personal_j ournal#CHART) listing pros and cons of different options for your retirement savings.
THE JOURNAL REPORT: 401(K)

What you should know (http://online.wsj.com/article/SB108990931470264800.html?mod=Retirement-Planning) about rolling over your 401(k). Plus, what's next for your nest egg, and more (http://online.wsj.com/page/0,,2_1096,00.html).

Brokerage houses also are stepping up their efforts. Early next year, Merrill Lynch (http://online.wsj.com/quotes/main.html?type=djn&symbol=mer) & Co. plans to introduce the "Retirement Paycheck Service," designed to help people near or entering retirement manage their investments and cash flow. With the new service, investors can create a financial plan, choose investments and manage withdrawals.
Some of these efforts are aimed at winning over the assets by simplifying the rollover process itself. Vanguard this year introduced a free service aimed at investors looking to roll over at least $100,000 in assets. Under the program, Vanguard retirement advisers handle all the rollover paperwork and provide investors with a personalized retirement portfolio analysis that includes recommendations for specific Vanguard products. T. Rowe Price Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=TROW) says it can handle most rollovers with a single phone call and will get an investor's old employer on the phone to take care of any wrinkles.
Many firms are beefing up their staffs of in-house retirement experts. During the last year, more than 500 Merrill brokers have earned professional designations as specialists in retirement benefits or retirement planning. Morgan Stanley (http://online.wsj.com/quotes/main.html?type=djn&symbol=mwd) says more than 4,000 of its brokers have received financial-planning training this year that includes a focus on retirement planning.
Investors need to keep a watchful eye out for marketing gimmicks and products such as annuities that may carry high expenses or limit their flexibility down the road. "I see a lot of people in retirement running off to these retirement advisers, who put them in complicated stock and bond products when probably all they needed is three mutual funds," says John Markese of the American Association of Individual Investors.
The heightened focus on boomers' retirement needs is being driven by demographic and economic trends. Next year, the oldest boomers will turn 59½, the age at which they can begin tapping their tax-deferred retirement accounts without penalty. They'll need to make this money last for decades: The average 60-year-old can expect to live for 22 more years, according to the National Center for Health Statistics.
This year, TD Waterhouse Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=TD) launched its first print and television ad campaign focused specifically on rollovers. The online brokerage is also testing more novel approaches, such as sending direct-mail pitches for its rollover services to people who have filled out a change-of-address form with the U.S. Postal Service. Waterhouse says its rollover deposits are up 44% this year from last year.
Another approach is interactive tools and educational programs. This spring, T. Rowe Price introduced a free interactive CD-ROM, "Rollover Planner," that helps investors sort through their rollover options and explains the firm's rollover services and investment options. The fund company says it is sending thousands of the rollover kits to investors each month.
Fidelity, meanwhile, says more than 7,500 investors have attended retirement-income planning seminars it began offering around the country this year. The company's new Retirement Income Advantage program includes tools that allow investors to model what will happen to their retirement finances under different scenarios. The planning service is free until early next year, after which clients with less than $100,000 in assets will have to pay a one-time $500 fee to work with an income-planning specialist.
Fidelity's program also includes an "Income Management Account" that lets investors measure the performance of their investments against their plan and create a pension-like monthly income from different pools of money. That service is free to customers with at least $30,000 in assets.
Firms are also coming up with new products intended to meet their needs for retirement income. Last year, Principal Financial Group (http://online.wsj.com/quotes/main.html?type=djn&symbol=PFG) introduced a new rollover IRA that allows investors to gradually shift their investments from funds to income-producing annuities over time.
Principal also is adding two new products that use annuities to help investors manage cash flow. One of these, the Principal Income Manager, allows investors to transfer annuity payments they don't currently need to a tax-deferred Principal Bank IRA money-market account.
This summer, MassMutual will begin offering funds used in the 401(k) plans it administers to individual investors saving for retirement. Later in the year, it plans to introduce a program that gathers funds, annuities and financial tools into a product that will enable clients and their financial advisers to develop a retirement income plan and then monitor it.
Fidelity, meanwhile, is working on adapting its Freedom funds for retirees. These targeted funds currently provide a mix of stocks and bonds that adjust over time and are aimed at people who expect to retire at a certain date, but also can be adapted to meet the needs of investors already in retirement, the company says.
Where to Put Your 401(k) Money

Workers who retire or change jobs have several choices when it comes to the money in their 401(k) plan. Here's a look at the pros and cons of each option.
Option Pros Cons Leave money in old 401(k) Savings continue to grow tax-deferred. May provide greater protection from creditors than an IRA. Limited to investment options in current plan. Could be more expensive, depending on plan's cost. If changing jobs often, could wind up with multiple accounts. Roll over into an Individual Retirement Account Typically provides more investment options, greater flexibility on withdrawals and more control over costs. Growth in savings continues to be tax-deferred. Can consolidate multiple accounts. Have to decide where and how to invest and arrange for money to be moved. If changing asset mix, run risk of investing all money at one time. Move money into new employer's plan Fewer accounts to monitor. May be able to borrow against balance. Investment choices limited to those provided by new employer. Savings continue to grow tax-deferred. May provide greater protection from creditors than an IRA. Costs may be higher. Cash distribution Provides immediate access to your savings. Reduces your chances of saving enough for retirement. Payout is subject to taxes. You may face 10% early-withdrawal penalty if younger than 59 1/2.

FordMan

11-24-2007, 10:06 PM

It used to be brokers, I should know my dad was a top broker at Merrill Lynch until his premature death, did not want the prospect of plenty of small accounts. Hence, the brokerage industry bias against privatizing social security.

Essentially it's greed. If you were a broker wouldn't you be happy with fewer huge accounts instead of small dollar accounts? Besides, big dollar people have connections and a social side that the small fry just don't have. E.g. country clubs, etc. It's hard to take 1,000 small account holders to ball games etc. So, let's just admit there's really no interest in small fry.

Fast forward to 2007. Lot's of retiring feds with $500K+ in their TSP accounts. According to this article $100K is now the threshhold. That makes Fed Greybeard a wanted client. But if the TSP meets the clients' needs, how does hungry broker capture the client?

If you're like me, you've heard a few sales pitches already. Just try to let your broker friends down gently, "well if they keep destroying my plan you'll be getting my business eventually....."

gavinman

11-30-2007, 01:30 PM

The Evolution of an Investor

by Michael Lewis http://www.portfolio.com/images/site/gfx/accent-dotted-pipe.gif December 2007 Issue
Blaine Lourd got rich picking stocks. but then he realized that everything he thought he knew about the markets was wrong. And he's not alone...

This is an interesting but long article:

http://www.portfolio.com/executives/features/2007/11/19/Blaine-Lourd-Profile?print=true

It basically says most brokers and firms only care about commissions and don't really do what is best for your money. I don't think there is anything wrong with TSP and have a Vanguard account on the side.
I do have some money with a financial planner and some other investments. I've started checking the historical data to see if the financial advisor accounts did better than if I would have just used Vanguard index funds. So far I would have more money just using Vanguard.

I agree, be wary of anyone wanting that lump sum TSP account.

ayla

11-30-2007, 05:32 PM

Anyone have any experience with Zecco? They supposedly offer 10 free trades per month (stocks or ETF's), and then just $4.50 per trade after that. They look pretty good overall on the comparison chart with Scottrade, Ameritrade, Schwab, etc.......but I'd like to hear from anyone who has first-hand experience with their services. Thanks much.

Hey rae, thanks for the tip. That looks like a great broker. Lots of good reviews on the web. Apparently, the cost of a trade has gone down to about $2 so that explains why zecco and a few others can offer accounts with no commission for 10 trades ($4.50 per trade over 10 and two trades not allowed in one day, i.e. no day trading).

Wow! That will do as a very nice replacement for TSP.

I've spent a few months (maybe longer) developing a new strategy so at least at first (if I transfer to Zecco), I will need to find TSP clones. I know about EFA for the I fund. Haven't really started looking yet but hopefully, I will find ones for the others. Bet there will be lots of options for that one. Suggestions welcome.

Wow, this option sure has got me out of the doldrums though I will miss the competition here if we end up being limited. Hey, maybe ocean can add a "cost of trade" variable that applies for those of us on the outside? Bet Tom (and ocean) will be less than enthusiastic (understatement) about considering something like that but I bet EBB would be interested.

Will be interesting how this turns out especially now that I know there are some reasonable alternatives and TSP is not the only game in town (at least it doesn't seem so at this stage) for those of us who are retired.

And even for those who aren't since all you need is $2500 to get started with this contract. One could make a loan, invest it in zecco, make the money and then pay it back to TSP. Then a short time later, make another loan. Wouldn't that work? (as long as you DO make money at zecco...need to have a lot of confidence, I guess.)

p.s. just read how discount brokers offering free trades is a relatively new development. Funny how TSP is going in the opposite direction (or not so funny).

Show-me

11-30-2007, 11:31 PM

Good find RAE!

Show-me

11-30-2007, 11:35 PM

Hey, I could take out a TSP loan for $10k and have a nice starter account.

Silverbird

12-01-2007, 01:27 PM

Hey, I could take out a TSP loan for $10k and have a nice starter account.
Problem with that is you pay taxes on the automatic repayments that you make into your TSP account to repay a TSP loan, which partially defeats the purpose of a 401K. And you have to immediately start re-paying when you pull out the loan, with a limited payback period. Plus - if you haven't paid off the loan at retirement you have to pay it back first before getting your money - exact rules you will have to look in the TSP handbook. It's been a while since I studied TSP loans, but I did a lot of researching before pulling money out to pay a down payment on my house, so I do know some of the problems. It allowed me to make a down payment and get a fixed interest rate and not an ARM and Leg, so it was worth it to me.

Show-me

12-01-2007, 01:46 PM

Problem with that is you pay taxes on the automatic repayments that you make into your TSP account to repay a TSP loan, which partially defeats the purpose of a 401K. And you have to immediately start re-paying when you pull out the loan, with a limited payback period. Plus - if you haven't paid off the loan at retirement you have to pay it back first before getting your money - exact rules you will have to look in the TSP handbook. It's been a while since I studied TSP loans, but I did a lot of researching before pulling money out to pay a down payment on my house, so I do know some of the problems. It allowed me to make a down payment and get a fixed interest rate and not an ARM and Leg, so it was worth it to me.

I see your point.

Birchtree

12-01-2007, 02:58 PM

You can stll make good money in your TSP account - you just need more of it to work with. That's the first law of finance - you need money to make money.

Show-me

12-01-2007, 03:57 PM

You can stll make good money in your TSP account - you just need more of it to work with. That's the first law of finance - you need money to make money.

Looking for a new relative? I'm available! :nuts: :D

ayla

12-01-2007, 04:31 PM

I'm still very serious about switching to a zecco ira if TSP unlimited trading is rolled back. But wanted to post this page about "hidden costs" at zecco. Bank of America brokerage also offers free trading by the way. There's no free lunch so I'm not surprised about hidden costs.

My biggest worry is that if we have a recession and zecco gets bought out by etrade or scwab or some big broker, then the rules will probably regress and then I WILL be concerned. "No guts no glory" as they say. I still hope the TSP limits are NOT rolled back.

Here's the link about hidden costs at Zecco (which seems like many could be avoided if you wanted to be frugal.)

http://tinyurl.com/2uqghq

or spelled out with a carriage return in case the tinyurl expires:

http://mrwavetheory.blogspot.com/2006/10/
zecco-not-entirely-free-lots-of-hidden.html

Here's another link with some useful info about pros and cons. It looks to be a bit old since the latest is that the IRA zecco account has a $50 annual admin charge.

http://tinyurl.com/2og4w7

and with a carriage return in case of tinyurl expiration:

http://www.seekingalpha.com/article/
27373-is-zecco-com-any-match-for-wells-fargo-and-bank-of-america

Show-me

12-01-2007, 05:59 PM

To good to be true. Dang it, I'll have to stick to Scott.

Warrenlm

12-05-2007, 04:05 PM

Any inclination to seek out a non-USA broker to hold assets in foreign currency? I'm not sure what currency to bet on long term but ours may become much less a safe haven in favor of something else.

Miss_Piggy

12-06-2007, 10:57 AM

ayla

12-06-2007, 11:27 AM

I asked this question in another thread, perhaps this is the more appropriate one to get an answer from.

Does anyone know if there is any alternative to preserving one’s capital as we can with the G Fund if one were to transfer their TSP accounts to accounts such as Charles Schwab or Fidelity or Ameri-Trade or any of the others mentioned above?

Since I'm investigating the options, I did some brief research last week and easily came up with some substitutes which means there are probably better ones if I spend more time looking but this is what I have so far. I'm not one of the most experienced at this so would appreciate if you would investigate further or if you find someone else who has, please report back.

S fund - AMEX:VXF
C fund - SPY:AMEX
I fund - NYSE:EFA
F fund - NYSEArca:AGG
G fund - AMEX:SHY

Next, I need to find out if these are available for trading by all or most brokers of IRA's. I'm especially interested in Zecco, Bank of America and Wells Fargo because of their "free trading" options.

FUTURESTRADER

12-06-2007, 11:29 AM

FUTURESTRADER

12-06-2007, 11:33 AM

Since I'm investigating the options, I did some brief research last week and easily came up with some substitutes which means there are probably better ones if I spend more time looking but this is what I have so far. I'm not one of the most experienced at this so would appreciate if you would investigate further or if you find someone else who has, please report back.

S fund - AMEX:VXF
C fund - SPY:AMEX
I fund - NYSE:EFA
F fund - NYSEArca:AGG
G fund - AMEX:SHY

Next, I need to find out if these are available for trading by all or most brokers of IRA's. I'm especially interested in Zecco, Bank of America and Wells Fargo because of their "free trading" options.

(SHY) is a 1-3 yr bond fund. G fund is essentially a money market fund.

ayla

12-06-2007, 11:37 AM

I like FUTURES option better. I just noticed that SHY (a.k.a. my proposed substitute for the G fund) is down today.

In our Schwab account, our cash always gets interest. I just read up on it - they call it the "Schwab Cash Feature) as Futures has described if we are not using it for trades. Can't remember the rate but it doesn't "go down".

Now to see if this works with other brokers as well.

ayla

12-19-2007, 10:48 PM

Hey Tom --

With the recent ETAC/TSP meeting plans to continue with IFT limits, maybe you could earn some advertising dollars by inviting some of the investment brokers/funds/whatever to advertise here to appeal to those of us who might be looking for better IRA options than what TSP is turning out to be.

It may not happen overnight but given the nature of capitalism and the inherent competition associated with it, seems like if I owned a brokerage, I would be setting up some kind of a plan that might be like a TSP "clone" to appeal to those of us who have the option to move our money.

12-20-2007, 05:44 AM

ayla

12-20-2007, 02:48 PM

Hope this info isn't too depressing for those of you who don't have an option to move your money away from TSP. But wanted to share this info about Zecco. This particular review is very insightful, I think. The offer of free trades definitely appears to be legit - 40 per month and from what I can find out (not at this link) this includes ETF's. (And they do have an IRA option) with apparent interest paid on cash balances.

The down side is that to this reviewer, their operation seems to be "unpolished" with inconveniences such as no phone access (or minimal anyway) making it difficult to resolve any problems if such problems arise.

His conclusion is that if you are doing simple buys and sells, he thinks its a good deal but he himself got burnt because of some delays so his enthusiasm is somewhat limited.

I'm definitely still interested but will wait until the TSP board drops the final bomb before I do something like this. I'm still hoping that maybe the limits as proposed won't happen.

http://tinyurl.com/yuzxq2

or full url with carriage return in case the tiny url above expires:

http://www.seekingalpha.com/article/
23199-test-driving-zecco-com-free-trading-but-at-a-price

ayla

12-20-2007, 04:05 PM

Zecco offers 10 free trades per month, not 40 as I wrote below by mistake:

Hope this info isn't too depressing for those of you who don't have an option to move your money away from TSP. But wanted to share this info about Zecco. This particular review is very insightful, I think. The offer of free trades definitely appears to be legit - 40 per month and from what I can find out (not at this link) this includes ETF's. (And they do have an IRA option) with apparent interest paid on cash balances.

The down side is that to this reviewer, their operation seems to be "unpolished" with inconveniences such as no phone access (or minimal anyway) making it difficult to resolve any problems if such problems arise.

His conclusion is that if you are doing simple buys and sells, he thinks its a good deal but he himself got burnt because of some delays so his enthusiasm is somewhat limited.

I'm definitely still interested but will wait until the TSP board drops the final bomb before I do something like this. I'm still hoping that maybe the limits as proposed won't happen.

http://tinyurl.com/yuzxq2

or full url with carriage return in case the tiny url above expires:

http://www.seekingalpha.com/article/
23199-test-driving-zecco-com-free-trading-but-at-a-price

ayla

12-20-2007, 07:54 PM

NewBee

01-30-2008, 12:38 AM

Sorry to dominate this thread with posts about Zecco but given the comments on the blog at the link below, I feel compelled to share this info. Apparently, customer service at Zecco can be SO bad that to some it has a definite odor of a scam, i.e. the more they delay you being able to trade, the more interest they get on your money.

There are a few positive comments but very few compared to the larger number of clients who say "stay away from Zecco".

I will be investigating the free trade options at Wells Fargo and Bank of America also. Don't know yet much about them. If anyone else does, please share.

http://tinyurl.com/2c3vke

or link with carriage return embedded in case the tinyurl above expires:

http://www.mymoneyblog.com/archives/2006/10/
zecco-feature-review-and-free-trades-details.html
I just wanted to write about my experience with Zecco. I still believe the TSP is the best place for the first 5% of my salary because of the Gov't matching, but I also contribute to my ROTH IRA and my account is held at Zecco.

I opened my ROTH account with Zecco in May 2007, but I've had a trading account with them since Jan 2007. Zecco originally promised 40 free trades per month, but then backtracked and changed to only 10 free trades per month if equity balance is $2,500 or more.

Believe me, I was upset when Zecco changed from 40 free trades to 10 free trades, but I still kept my account with them and plan on keeping my account with them (unless of course, another firm offers more free trades). I didn't even use 40 trades a month, but I liked having the option.

So now, I'm left with 10 free trades a month. That's okay. That gives me 5 full-round trips a month free. Online trades after that are $4.50.

I've had no problems with trade executions. I don't recall a time I've been unable to access their website to enter a trade. But it's true, customer service (live operator via phone) can sometimes take a while to get to.

Zecco charges an annual fee for its IRA accounts. It was only $30 last year, but it looks like it is now $50. (I will be extremely disappointed if this fee keeps increasing each year!) That's the only fee I've been charged with, so I can't speak to the other fees. I was charged an ACAT fee, but that fee was charged to me by Fidelity when I moved my ROTH IRA to Zecco. Fidelity charged a fee of $50, which seems in line with what Zecco is charging.

Keep in mind, Zecco is a fairly new brokerage firm. (Less than 2 years old, I believe). If that makes you uncomfortable and you feel you need a more established firm, then Zecco might not be right for you. Also, the more established firms probably have lots of other value-added features (research, free tax reporting, etc.) that Zecco does not. However, I didn't need any of that, so Zecco works for me. Besides, I don’t qualify for free trades at Wells Fargo or Bank of America since my account balances are puny. LOL!

BooDog

03-06-2008, 10:01 AM

New to the board and am still lurking around. Not very happy with TSP and certainly not happy with the 2 trade restriction. My post on the petition...

Mar 6, 2008, Anonymous , Virginia
As a TSP contributor my ability to maximize returns is already limited due to the delays of executing orders. With today's technology I would expect there could be some compromise. If we will be limited in our trades we should be able to get real time results. Too often I have missed returns or buy ins because of the executing delays. This costs me and therefore also costs the fund. As society learns more and more how to manage their own finances in this mostly self serve technology I feel they will take their money elsewhere in order to maximize results.

A lot of good info through out. Cheers.