Friday, May 18, 2007

TD Ameritrade Update and a Warning

PFStock has helped to chronicle the travails of Ameritrade as it swallows up the brokerage formerly known as Waterhouse Securities. This past week, the assimilation was completed. For former Waterhouse customers, we have been switched to Ameritrade's new web site. I had previously described this upgraded web site in the post: Ameritrade's Unimpressive Site Upgrade.

For long-time Waterhouse customers, like myself, this is a significant changeover. Notices have been posted on the TD Ameritrade on the website indicating that the brokerage firm is experienced a very high volume of calls to customer service. Presumably, this is due to a great many former Waterhouse customers who are, at best, confused by the new web site.

Before I continue with what is becoming a long post, I will now issue the warning that is mentioned in the title of this post. Here is my warning about he the new website:

If you formerly received paper statements from Waterhouse, the new TD Ameritrade will now charge you $2 per month for paper statements, unless you are an Apex client.

This notice was incorporated in the many reams of paper that TD Ameritrade sent out to its clients. In case you missed the change, I am letting you know now.

From my perspective, I am finally an Apex client at TD Ameritrade. However, by the arcane system that TD Ameritrade uses, my DW is not considered an Apex client. Although we (as a household) have more than double the required assets for Apex access, there is less than $100,000 in my wife's combined accounts, so they don't count her as Apex.

TD Ameritrade has been touting such features as Trade Triggers, which the new site has. They also now offer conditional orders. I use Standard and Poors (S&P) stock reports extensively for my personal research. And TD Ameritrade allows customers to access S&P reports for most companies. Typically, these S&P stock reports are 8 pages long. There are some other improvements to the site including the very good Streamer Suite of online investment tools. There is also the new Command Center 2.0, and StrategyDesk.

However on the downside, the new TD Ameritrade website does not give access to IPOs. And currently, customers cannot access the cost basis information for their investments. My general opinion is that customer service at TD Ameritrade is lacking unless you are able to make friends with a representative at a local branch office. In that case, you can call your representative with your issues, and have them do battle with their own customer service department.

As I described in my previous post, the new stock screener is still hard to use. I had trouble figuring out how to use the Ameritrade stock screener, so I've abandoned it and will instead use the free stock screener from Yahoo Finance. And I am still receiving spam at my Ameritrade Email address. In a previous post on the topic, I mentioned how I use a unique Email address for my Ameritrade account. This is accomplished through Yahoo's "AddressGuard" feature.

Lastly, I want to remind readers that better choices exist for the TD Ameritrade's money market (cash sweep) account. Typically, these fund options pay 4-5% APY while if you let let TD Ameritrade assign you to the default FDIC-insured sweep account, you will earn as little as 0.1% interest on your money.

For information on money market (cash sweep) funds, see this post: Ameritrade's "Hidden" Cash Sweep Account.

For information about enhanced cash funds which pay about 5.4% APY, see this post: Money Market Fund Options for TD Ameritrade. By the way, the symbol for this fund is RYPQX and it is offered through The Reserve.

PF Stock


Anonymous said...

Just a few random thoughts from an 8 year TDW customer... and someone who has a "friend" at Private Client Services.

The cost basis "should" be working next week, and all dividends that weren't paid this week should be paid on Monday (21 st). DRIP divs "should" be paid in stock.

AMTD users will now receive DRIP divs all in stock even partial shares - previously they would pay cash on partial shares.

TDW customers will now receive the normal ~4.5% rate on cash balances in sweep accounts. Previously the cash and margin balances were split for TDW customers but now they are one "account". (AMTD customers already get the higher rate.)

For TDW customers the new site has many awesome upgrades. One can create custom views which you can add all kinds of stuff even Greeks and IV for options positions.

While I agree the site is a bit cluttered and will take awhile to get used to... the upgrades are well worth it !

FYI - TDW customers old account #'s are now their "user ID" #'s and there is a newly assigned "account" number.

ps: Aren't we all just glad we could login at all this week ? LOL

pps: 8 hour login sessions w/o needing to login every random 2-5 minutes = WOOHOO!!!

pfstock said...

Thanks for your random thoughts. Could you clarify what you mean by "the normal ~4.5% rate on cash balances in sweep accounts"? By default, TD Ameritrade's cash sweep pays less than 1 percent interest.

I think that using the old account numbers as the new user IDs is a confusing idea, but that is what TD Ameritrade did anyway. Your comment about being able to login is clearly a jab about the fiasco that TD Ameritrade experienced last year when former Waterhouse customers had significant difficulty logging into their accounts for about a week. I remember those days...

Anonymous said...

You're correct that currently TDW customers only earn ~1% (or less) on cash balances in margin (sweep) accounts. BUT AMTD customers earn ~4.50% on cash in sweep accounts which is also what TDW customers earn on cash balances in IRA accounts. (Mar 2007 it was 4.45% to be exact for my IRA cash balance.)

Starting next month (May 07) TDW customers should get the higher interest rate cause now they won't be splitting cash accounts by using 2 sides of one cash balance like they did previously for TDW customers.

TDW customers only started getting the higher rate for IRA accounts in Mar 2006. (It was <1% prior to Mar 2006 - for me it was 0.25%)

Mind you the upcoming changes to cash sweep accounts for TDW customers is what I was told from my contact who I'm on first name basis with at TDW.

I stated "~4.50%" in my first post cause the percentage has been right around that figure since the IRA accounts got the higher rate last year in 06.

Hope that all makes sense :-)

Anonymous said...

When I called in to ask about any sweep account that gets more than 0.25% I get mailed some pdf application for their TAP plan which carries a minimum 100K initial cash balance.

I really hope that they'll go through with that "4.5% rate". Otherwise I'll have to look at other brokerage options.

pfstock said...

Wow, two anonymous commentators! Let's be clear on one thing, the sweep account in question for former TDW clients is called the "TDAM Money Market Portfolio – Investor Class" and shows up with a symbol of CMFMZ on the brokerage statements. This MMF currently yields about 4.5%.

My point was that, contrary to what you've said, this changeover is NOT automatic. My own records show that I was moved to this higher yield MMF in November 2006, and that was only after I spoke in-person to an investment consultant at a TD Ameritrade branch. Perhaps you were moved to the higher yield earlier because you had a "friend" at Private Client Services.

I also have an original AMTD account, and I can also attest to the fact, that the changeover to the higher yield MMF is not automatic there either. In this case, the MM fund in question is called "The Reserve Fund Primary Class R" with symbol RFIXX. Note that I chose the California Tax-Exempt Fund instead. As the second commentator notes, TD Ameritrade sent a TAP (Total Asset Plan) application with a rather steep initial minimum of $100K. My point here is that the TAP application is not part of TD Ameritrade's public website. This is why I refer to this plan as Ameritrade's "hidden" cash sweep.

Anonymous said...

PF - I fully understand your point, however what I'm saying is that "allegedly" ALL TDW accounts will get switched over starting LAST WEEK. According to my contact my cash/margin account had already got changed when we were talking last Friday.

I never did anything last year AFAIK to get my IRA's switched (4 IRA accouts 2 of them with less then 4,000 balance) to CMFMZ. I certainly didn't fill out any application and I don't have any notes from talking to them last year in regards to getting a higher rate on cash. (I keep a TDW journal.)

Is it possible that my IRA's got changed last year due to having over 100k in combined accounts ? Yes, that is certainly possible... although I didn't get that impression from my contact.

(I did say Private Client Services is my contact and I believe is for customers with 100k in combined accounts.)



ps: I'm expecting dividends to get paid Tuesday AM - (IRA accts always one day later), and I'll try to call my contact to see if I'm on track about the interest on cash information.

pfstock said...

It is likely that your money market funds were upgraded due to your relationship with Private Client Services, rather than just your account balance alone. In my experiences with banks and brokers, I am learning that customer service representatives often know of better account options that aren't widely disclosed.

Anonymous said...

Well dividends got paid and cost basis thru Gainskeeper was working when my source told me they'd be working :-) (All divs got paid in cash. She thought DRIP accts would get stock but alas that was not the case.)

Cost Basis on the Webpage should be working next Tuesday (or Wednesday depending on how they update it.)

Sorry I was just on the phone and I forgot to ask about the interest rate paid. I won't be back on the internet til June ~6th.

Super Saver said...

PF Stock,

So far my transition has been issue free. TD Ameritrade seems to have more features, but I need to download software for some of them, which I prefer not to do.

pfstock said...

I spent a little while updating and correcting the cost basis for a few of my investments in GainsKeeper. However, these updates don't seem to be reflected on the "Balances & Positions" page. There must be two different sources for cost basis data, which can be confusing.

The only tools that need to be downloaded (and installed) are StrategyDesk and Advanced Analyzer. I have experimented a little with StrategyDesk, but have not installed Advanced Analyzer yet.

Anonymous said...

Any idea what's going on with the TDAmeritrade site right now? There seems to be some kind of major tech glitch. I funded my account and the funds showed up as available for trading. Then all of a sudden they were gone and the transaction showed they were taken as a "Money Market Purchase." I did not authorize any transaction for this!!! A message on the site says that they are looking into an issue with the cash balances and I'm assuming that is part of the issue. Anyway, I can't get through to customer service so I'm leaving this comment in hopes that someone is having the same issue and can be of some help. Thanks.

pfstock said...

When I checked my account this morning, it looked like I had lost about $60,000. So, there is definitely a major glitch of some kind at TD Ameritrade. There was an announcement that read "Account Balances: Currently, account balances may be incorrect. We are working on a resolution and apologize for the inconvenience."

I was going to write a post saying that the transition to the new TD Ameritrade seems to going fairly smoothly. But, I'm glad I didn't speak too soon.

Anonymous said...

Well an update: I finally called my contact at ATMD and she told me that the updating cost basis on the website was supposed to happen, BUT it ain't gonna happen. Pfft.

She didn't have anything else interesting to say, so I guess I'll stop spamming your blog ;p

I'm pretty annoyed about the whole thing :\

pfstock said...

Yes, this is annoying. I remember reading that TD Ameritrade was going to update their cost basis information, but then that notice disappeared and there was no further mention of it. It seems that there are two different sources for cost basis information. The one at GainsKeeper is more complete than the one on the "Balances & Positions" page. But, I found that if you make a trade during the day, GainsKeeper doesn't reflect that trade until the next day.

Anonymous said...

Balances and positions is only good for trades that you initiated a new position post-crossover. Gainskeeper does have good data for all old trades... thankfully :-)

I'm pretty annoyed about the whole thing and cancelled reinvestment (DRIP) on my IRAs and will likely move them to Fidelity on next vacation cause the buy-to-close option price is just 8$ for contracts of .65 or less. (No per contract cost if less then .65 when buying to close ONLY.) And I can only sell to open in IRAs anyway...

^^ I repeated that cause I always get asked to clarify and you can't find that info on Fidos website...

pfstock said...

I usually don't participate in stock DRIPs because of the extra record keeping, and the extra layer of complexity to sell fractional shares. But I guess that in an IRA, the record keeping isn't really a requirement. I just like to know where I stand.

Anonymous said...

Why isn't TDAmeritrade totally dominated by Vanguard? At Vanguard the sweep options are transparent and always competitive with short term CDs. You also have Muni bond fund sweep options for most states. The only tiny issue I see is that Vanguard may charge more for option trades, which it hope to discourage.

AMIT said...

Good update given.Nice info too.

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