Brokerages
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Brokerages Does anyone have an idea as to why investment clubs seem to have become pariahs to brokerages? Three of the seven brokerages (Folio, Schwab, and Merrill Lynch) listed as being ably to link through AccountSync seem no longer willing to accept new club accounts. It's all about cost. From the view of the brokerage, clubs are * Hi touch - lots of calls and lots of questions. That ties up staff. * Most clubs want to change officers frequently. That process takes time and is not something brokerages consider normal activity. * Most club accounts are small and it is not as easy to be profitable Mark Eckman Does anyone have an idea as to why investment clubs seem to Mark Eckman During our recent officer change, we learned it is also about liability - with multiple members in a club, there are more potential risks and opportunities for the brokerage firm to be pulled into investment club issues. Our brokerage, Fidelity, put us through additional legal reviews of our paperwork and noted it was due to their perceived additional risk from multi-member partnerships. Pro Tip for Fidelity users: When you call in for account changes, request a case number (they target closing within 30 days and you can reference followups back to it, without it you essentially start over with every call) and request help from / escalation to the backoffice Services Support Group. Michael Boyd, Treasurer Salt Pond Investments Our club just renews our officers annually with a voice vote.
It's probably not the healthiest way to groom new officers but it
does make it easier on the club and the brokerage. We've been with
E-Trade for 20 years with few issues. They're part of Morgan
Stanley now. I'm not sure if they're taking new clubs or not but
you might want to check. Like someone mentioned, just present your
self as a "Limited Partnership". Lee Weygandt On 12/5/2020 8:30 AM, Mark Eckman via
bivio.com wrote:
I don't know about limited partnership. That might be more complicated than a general partnership. But I think you work are correct about not asking if they take investment clubs. We don't tell our brokerage every time we change officers. Maybe we should but they have never indicated that it is any kind of problem. The brokerage might want to know, but if we just simply change passwords and user IDs, I'm not sure the brokerage really cares. Peter Dunkelberger
TD AMERITRADE takes on new investment club accounts.
A Limited Partnership is very different from a general partnership in terms of the legal rights and responsibilities of the members. In a limited partnership, only the general partner or partners have a say in the decisions made by the partnership. The limited partners are basically "along for the ride". Note that this can also create potential issues with SEC and/or state securities regulators if it is determined that the partnership is selling a security interest in the partnership. Simply put, an investment club does not want to go the limited partnership route without very good legal representation to ensure that things are done correctly. Ira Smilovitz
Sorry for the delay on this.. For Fidelity we do not use Bivio account sync. We found it easier to just manually input the investment transactions and was easier/cleaner to record member contributions manually (Sync brings them over individually). We average 10-12 transactions a month plus monthly member contributions. Total data entry is typically 5-10 mins (Bivio is easy!). Our officers are authorized users on the account to allow for all trades/transactions. Each member can view the entire portfolio as a separate account under their Fidelity login. The sync would require you to use that member's Fidelity login credentials. Hope this helps. Michael Boyd, Treasurer Salt Pond Investment Club -----Original Message----- From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Mary Lou Griffin via bivio.com Sent: Thursday, January 7, 2021 11:37 AM To: mjboyd@litehows.com Subject: Re: Brokerages How did you sync your Fidelity account with Bivio? Our club does not have one user ID or password. Fidelity made each member open an account with their own user name etc You cannot sync without user name etc. Fidelity will not give the club one user name and password Help! Thanks.. Mary Amlg@optonline.net |
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