Transfer Broker Account From Firstrade To TradeKing
As 2007 comes to an conclusion, I make another change of my investment accounts over the weekend when I opened a TradeKing account, which will replace Firstrade as my main stock broker for stocks that pay dividend.
I got the Firstrade account in early 2006, mainly for its free dividend reinvestment feature, one that my primary broker Scottrade doesn’t have. At that time, Firstrade still had free mutual fund trading. Though I have never used Firstrade to buy mutual funds because I wasn’t so sure how long it could last, it was nice to have it as an option. In fact, that was one of the reasons that I eventually chose Firstrade over TradeKing back then. That policy, however, was abandoned last February when Firstrade adopted a similar fee structure as other brokers for mutual fund investment: charging a $9.95 commission for each trading no-load mutual funds.
When comparing Firstrade and TradeKing, other than the free dividend reinvestment service offered by both brokers, my main focus is on the commission: Firstrade’s $6.95 vs TradeKing’s $4.95. Percentage wise, the difference between the commissions charged by the two brokers is quite large, but that isn’t a big deal to me given how little I trade in a year. Plus, if I indeed switch, the $50 account transfer-out fee charged by Firstrade could potentially take me years to make up from money saved on commissions. In the end, what promoted me to make the change is the news that TradeKing will reimburse account transfer fees charged by other brokers before the end of the year. That basically solved my problem and, no matter how less, I still want to reduce the trading cost.
Of course, all of these are not necessary with a broker that charges zero commission, such as Zecco. However, I am not confident that the company can maintain their free-trading service after seeing it flip-flopped several times in a short period of time. Free-trading is nice, but I don’t want to end up having another commission based account with no other appealing features should Zecco decide to reverse course later. For that, I only keep a small account with Zecco right now.
After the latest change, my active brokers for both taxable and retirement accounts are:
- Scottrade: Primary stock broker, $7 per trade;
- Zecco Trading: Speculative money, $0 commission;
- TradeKing: Main broker for dividend paying stocks, $4.95 per trade;
- E-Trade Global: For stocks listed in Hong Kong only, about $40 per trade;
- QQQDirect: For QQQQ only;
- ComputerShare: For DRIP stocks only;
- Fidelity: 401(k) accounts;
- Vanguard: Roth IRA accounts;
Still a large number, but each has it own unique use. So I will keep all of them for now.
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