Changing from Schwab to E*Trade
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Changing from Schwab to E*Trade Our club was formerly with TDA and transitioned to Schwab in May. I began trying to process a transfer of stock to a withdrawing member, using her broker (who is a Schwab broker) to process the transfer. As everyone else has reported, this is not possible through Schwab. As a result, I am looking for new broker suggestions. E*Trade seems to be very accommodating to Investment Clubs and will allow the established agent(s) for the club to make transfers of stocks to a withdrawing partner without needing the signatures of all members of the partnership. For those of you using E*Trade (Morgan Stanley), what has been your experience with member withdrawals? What about account sync with them? Thanks for your help, Marilyn Haldiman Treasurer Win-Vest Investment Club Fidelity works with investment clubs. The sign up process is arduous though. I have transferred two clubs to Fidelity. On Thu, Feb 22, 2024 at 7:52â¯PM Marilyn Haldiman via bivio.com <user*17489100001@bivio.com> wrote: Our club was formerly with TDA and transitioned to Schwab in I agree about Fidelity; after you get established works good.
Thanks for your input. After you have opened your Fidelity account, have you had any experience process withdrawals and transferring stocks to the withdrawing partner? In speaking with a Fidelity agent today, I was informed that all partners in our club need to be listed as owners of the account and all members would need to sign the transfer papers. Then we would have to remove the withdrawing partner from the account, again with paperwork signed by all partners, and reform the partnership by re-signing our partnership agreement and submitting it to Fidelity. I'd like to avoid having to collect and submit all those signatures repeatedly. In our experience, I wouldn't call it arduous, just took some extra effort. They wanted signatures from all partners in our general partnership, which was made more difficult because it was during the first part of COVID (not Fidelity's fault). Still doable and I don't blame them for wanting all signatures. Carole Jansen Wise Investment Club
The Wise Investment Club, a General Partnership, is the owner of our account. We have paid withdrawing partners in cash and never had to "reform" our partnership. I would argue that point, as long as we have memorialized the withdrawal with an addendum to our PA. Never done a stock transfer, but that will be when we dissolve the Partnership, so I don't expect any problems. Carole Jansen Thanks for your input. After you have opened your Fidelity Also....if all partners "own" your account, what do they use for a tax ID number? Everyone's SS#? Thisakes no sense, and is not what we experienced. Carole Jansen Thanks for your input. After you have opened your Fidelity You are a partnership and you do need to show all current partners and their concurrence with the rules of the partnership. Peter Dunkelberget On Thu, Feb 22, 2024 at 8:14â¯PM Marilyn Haldiman via bivio.com <user*17489100001@bivio.com> wrote: Thanks for your input. After you have opened your Fidelity Fidelity takes the approach that all of the partners in a general partnership have equal authority. Therefore, they want all of the signatures on the account application. You still use the club's EIN for the account. I have an LLC club account with Fidelity and they required all signatures on the main application, but required additional information for the four member-managers of the LLC. These four are the only ones with trading authority on the account. TDA's approach was to grant authority to a single person, typically the one who submitted the paperwork to open the account. (It's been so long that I don't remember how my other club opened the account.) We never changed the authorized user, we just "spoofed" that person when we needed to. Ira Smilovitz
I have not removed any members since the transfer. I had to send in 2 different signature pages to even open the accounts. As I said, it is an arduous process. Check with Morgan Stanley. Might not be as hard. Sent from my iPhone > On Feb 22, 2024, at 8:14â¯PM, Marilyn Haldiman via bivio.com <user*17489100001@bivio.com> wrote: > > Thanks for your input. After you have opened your Fidelity > account, have you had any experience process withdrawals and > transferring stocks to the withdrawing partner? > > In speaking with a Fidelity agent today, I was informed that > all partners in our club need to be listed as owners of the > account and all members would need to sign the transfer > papers. Then we would have to remove the withdrawing > partner from the account, again with paperwork signed by all > partners, and reform the partnership by re-signing our > partnership agreement and submitting it to Fidelity. I'd > like to avoid having to collect and submit all those > signatures repeatedly. Our club is a partnership, not an LLC. Would we be able to establish member-managers of a partnership at Fidelity? Our club has been in existence since '91 and I expect to be processing 3 or 4 withdrawals this year. Our Partnership Agreement requires that all members have an account with our investment firm to make stock transfers "easy". I sure miss the old TDA days when I, as the authorized agent for our club, could easily implement transfers of stock to a withdrawing member. Due to the capital gains ramifications, it is not an option for us to sell stock and do a cash payout. Fidelity generally has two types of access levels for users on an account - Authorized Users and Inquiry Users Authorized users on a Fidelity account generally have full trade and cash management privileges (whatever your club has authorized). They can move money in or out. All transactions send notifications to authorized users. Fidelity considers non-authorized users as Inquiry Only members who can see all transactions, balances and statements, but cannot execute transactions, including deposits and withdrawals. We have our club account is setup with officers as Authorized Users and the remaining members as Inquiry Only users. As noted earlier, Fidelity does often require all member signatures on the respective documents when making these types of granting access changes. They are good about taking scanned signatures (during the pandemic they even took a packet with 1 signed page per member). Pro tip for getting good advice from them: Ask to open a support case (they will provide a case number) and ask for escalation to their backoffice team that deals with partnerships and investment clubs. Provide some convenient times to have a call. The people that know the details of their policies and processes are there, just not on the front line call centers. If you have a local Fidelity advisor for your personal accounts, leverage them to escalate for you - it does speed up the process. - Michael Boyd, Salt Pond Investments -----Original Message----- From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Marilyn Haldiman via bivio.com Sent: Friday, February 23, 2024 10:01 AM To: club_cafe@bivio.com Subject: [club_cafe] Re: Changing from Schwab to E*Trade Our club is a partnership, not an LLC. Would we be able to establish member-managers of a partnership at Fidelity? Our club has been in existence since '91 and I expect to be processing 3 or 4 withdrawals this year. Our Partnership Agreement requires that all members have an account with our investment firm to make stock transfers "easy". I sure miss the old TDA days when I, as the authorized agent for our club, could easily implement transfers of stock to a withdrawing member. Due to the capital gains ramifications, it is not an option for us to sell stock and do a cash payout. When we opened our Fidelity account in early 2022, we had 24 separate signature pages (one for each member) as part of the application package. Everything was submitted online. Once Fidelity had the paperwork, the rest of the process was simple. Ira Smilovitz Fidelity generally has two types of access levels for users on an account - |
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