Firstrade Brokerage Switches Clearing Firms, Offers Free Outgoing Account Transfers
I received a letter this week that discount stock broker Firstrade is changing clearing firms from Ridge Clearing to Penson Financial*. Not really a big deal, but hidden in the fine print is that existing users can perform an account transfer to another broker with no fee if you request a transfer within 30 days from the Conversion Date (“on or about June 25, 2010″). The normal outgoing ACAT transfer fee is $50, so this gives you an opportunity to consolidate or switch brokers with no cost.
If you are looking to open a new account with Firstrade, they do offer an fee rebate against your old broker for transferring over. In addition, they have a Firstrade Refer-a-Friend program that offers new customers 5 free trades to start.
* Penson Financial is used by several other discount brokers, including low-price leaders Zecco and OptionsHouse.
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June 16th, 2010 at 6:43 am
Do you have an opinion about changing, i.e. some broker you find more attractive personally? I’ve been essentially content with my Firstrade accounts, and I only make about 3 trades per year. If I switched, I’d prefer another broker that lets me reinvest dividends as partial shares. It helps me stay fully invested, since I make so few trades.
My instinct is that for the few dollars a year I might save don’t really justify a switch.
June 16th, 2010 at 12:27 pm
Firstrade seems like an okay brokerage, in general. Honestly, I opened an account on Thanksgiving a while back when they offered a free iPod Nano. I had wanted to try out the interface anyways, so I opened and account. Haven’t used it much.
I actually don’t like dividend reinvestment in a taxable account because of all those tiny tax lots I have to keep track of…
June 16th, 2010 at 6:45 pm
My account is an IRA, so the tiny tax lots doesn’t apply. That’s why I make only a few trades a year. It’s my “contribute the right amount before Apr 15 to make my taxes come out right” account.
June 18th, 2010 at 11:20 am
fyi guys: penson is a huge clearing agent from canada so now worrie, but it is nice that they allow accounts to move freely
June 18th, 2010 at 11:54 am
wow… too bad i missed this by a couple of weeks! i had just transferred over to vanguard and i had to pay that $50 fee.