I’m Ditching TD Ameritrade

I’ve been a customer of TD Ameritrade (AMTD) since 1999 and have liked their services and interface enough to stick around all this time and pay higher commissions than I could’ve gotten elsewhere. I tried Interactive Brokers (IBKR) a few years ago with a portion of my account, but switched back to AMTD when my number of trades slowed and I got tired of the monthly minimum commission charge.  Also, I was working at BellSouth at the time and most of IB’s site was blocked internally.

As my next step in setting up my Investment Advisor business I contacted AMTD to open an account with TD Ameritrade Institutional.  Their site looked good from the outside and they promoted their services as great for “emerging Registered Investment Advisors”.  Yet when I called I was told they have a $10 million minimum value for accounts under management.  Since I’m about $9.9 million short of that right now I was forced to look elsewhere and AMTD will miss out on all of my commissions each year and those that would have come from the accounts I’ll manage.  I’ll probably leave my wife’s IRA at AMTD to maintain access to some of their third party reports, but I don’t trade a lot in it so it might be a better to have it their without getting charge the minimum monthly fee at IBKR.

I’m moving my margin trading account (the one I blog about) to Interactive Brokers and will suggest my clients use them also.  Without going into full details, they seem to have a good set up for Investment Advisors and do not have a minimum balance requirement for accounts under management.  My monthly trade volume has gotten steady enough that I should come out better on a commission basis there, although I still don’t like being charged for changing a limit order.  I figure I’ll still come out ahead though and since having access to a custodian for my client’s accounts is crucial for me, I had little choice out there. 

The big pain of this decision is moving my cash from one company to another.  The timing is good though.  With most of my options slated to expire out of the money this week I’ll be able to get most of my cash out without having to kill long term positions.  The stragglers will be my NDAQ position that’s still almost a dollar in the money and UCO which is my only December option.  This weekend I set a limit order to sell my long BND shares and within the first 30 seconds my order hit and I sold 100 shares of BND at $79.58 and received $7,947.80 after commissions.  I’ll sell my PVI shares this week too (I won’t waste a post on that trade and can already tell you it will be 2900 shares at $25.00) and start withdrawing cash and moving it to IBKR.  I held my BND shares for less than two months and made $38.91 on the shares after commissions and $50.09 in dividends.

I might end up closing out my UCO and NDAQ positions early just to make a clean move, but if those are my only two positions I leave behind I’ll still have more than $60k I can transfer to get me started at my new investing home.  You never know, by the end of this week I could be sitting on a paper profit on my NDAQ and UCO naked puts and might buy them back and reopen them at IBKR without having to worry about the wash rule.  I still like both plays for the longer term, so I don’t want to lose out just because I’m anxious to have all of my funds in one account a few weeks earlier.