Category Archives: Brokers

Schwab Alliance Platform & Cyber Security Updates

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The transfer from TDAI to the Schwab Alliance platform has been completed and I wanted to provide you with an update. We are still experiencing longer delays to complete tasks on the Schwab platform (than we did on the TDAI platform) but we have started to see improvements.

We have noticed that Schwab likes to email and send mailers far more often than we experienced when TDAI was the custodian. I would like to double down on my usual recommendation that you NOT click on hidden links within emails – Schwab appears to send many emails with hidden links. You could instead log into your Schwab online account directly and address Schwab’s emailed request. Our concern stems from potential spoofing of both the email and the Schwab website. Our priority should be to keep your Schwab Alliance login credentials safe and secure so that we can maintain digital safety of your portfolio. To do so please be sure you only log in using the Schwab legitimate website and from a safe electronic device.

Mid-January, Schwab sent an email to those who participate in the Schwab sponsored individual 401k plan regarding a new ROTH 401K plan feature. This is good news but for now, please ignore it. We can discuss how it works at our next meeting particularly if it might be useful for your financial plan.

If you are having difficulty logging into the Schwab Alliance website, please let us know. If you have not yet logged in to the Schwab platform then you will begin receiving paper reports in April unless you log into your account before March 27, 2024.

Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com

Gamification of Trading

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The suicide of a 20-year-old experimenting with trading on the Robinhood platform
has many calling for new regulations on trading. I think new regulations on the “Robo”
interfaces are required but not on trading. Robo platforms, like Robinhood, provide a
software interface that makes trading more like a game.

Brokerage firms have been on a serious race to engage directly with the young and the
inexperienced. Robinhood, E-Trade, TD Ameritrade, Charles Schwab, Interactive
Brokers, Fidelity, Merrill Lynch, and many others have all embraced commission-free
and zero-minimum balance trading on platforms that focus only on the upside
of trading. These platforms are more reminiscent of an animated game than a
serious financial transaction. Even those who have managed to make a little money on
day trading often fail to understand that there are tax consequences. They usually
reach out for assistance when they receive from these brokerage firms an unexpected
1099 with a large tax liability.

It is clear that what we need is more clarity on what is a game and what has real life
consequences.

Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com

Pershing on creating a common vision

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The key to creating a common vision

Information for this post derived primarily from an Investment News interview with Brian T. Shea, CEO, Pershing, LLC, “The key to creating a common vision,” Jan. 1, 2012: http://www.investmentnews.com/article/20120101/REG/301019997?template=printart

As we reviewed brokerage firms to custody our client assets we landed with two very different brokerage firms that have a similar attitude.  Below is a summary of an interview with the lead at one of these brokerage firms, Pershing.

Brian T. Shea is interviewed often since he became the chief executive of Pershing LLC (in 2010), which, with $910 billion in assets under custody, is the biggest brokerage and clearing firm that most investors have never heard of. Owned by The Bank of New York Mellon Corp., Pershing employs more than 7,000 and provides services to more than 1,500 financial organizations and 100,000 investment professionals.

AIKAPA has considered the usual brokerage firms but has instead decided to custody our client assets at either Pershing or Scottrade – In our evaluation both of these firms provide the most service for the least cost.

Pershing’s Shea believes in creating a leadership environment where people can be successful and where you can get people to work together. The most important thing a leader has to do is create a shared vision, or mission, for the team.  He prides his leadership style as one that emphasizes communication.

The No. 1 person was his father who was an executive in the insurance industry. His father taught him that any profession can be a good profession but we need to do it with a passion every day – I could not agree with him more.

His comments that his father instilled a really strong work ethic in all of his children.

He said that he is really comfortable in an environment where people are open and engaged. He believes that it is really important to surround yourself with people who will share their opinion no matter what — even if they know you won’t like it.

As we move into 2012 we’ll engage more with Pershing as we transfer our clients from their current brokers to either Pershing or Scottrade.  I’m certain that as the year progresses I will be better able to comment on how well his vision translates to what advisers and our clients experience using Pershing to custody assets.

Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com