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Post by habsui on Mar 18, 2023 7:16:23 GMT
www.schwab.com/legal/account-protectionDoes Schwab have any additional protections for client securities beyond those provided by SIPC? ....... I found the above by myself and then talked with a Schwab rep, and he verified the above. ....... (shortened) Great post!!! Thanks! But the insurance is only $149M, thus you need to spread it over at least 2 brokers..
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Post by bobfl on Mar 18, 2023 12:56:25 GMT
I just got off the phone with Fidelity and was referred to the website security and protection section. Fidelity has an excess of SIPC insurance policy at Lloyd's of London that is a second layer of protection up to 1.9 million dollars. The man said it and showed me where it was on fidelity's website so I believe it. What does anyone else think? catdog The brokers are holding agents for your regular equities and unless foreign hackers get to your account and move your equities off shore, they are yours. That insurance is more a protection against criminal activity, I was told by a broker. One caveat, if you buy through leverage and/or permit the broker to loan out your stocks to shorts, then you may not out right control your stocks. I made sure none of mine can be borrowed by shorts. Incidentally, I was also told by a broker if you have cash and a second person, I believe beneficiary, attached to that account, the FDIC insurance is times two.
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Post by johnsmith on Mar 18, 2023 13:02:24 GMT
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Post by FD1000 on Mar 18, 2023 13:42:14 GMT
First, you should never deal/talk/do business with a broker, instead go with 1-2 of the big 3 = VG,Fido,Schwab. Second, most investors should use only several well known simple indexes(stocks+bonds) + maybe well known managed funds, hardly trade, and definitely not brokers, most are gone anyway. Also, stay away from anything leveraged or hybrid such as CEF,BDC,HY,preferred,alternative(includes several categories). Basically KISS
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Post by yogibearbull on Mar 18, 2023 20:10:11 GMT
OK, so lot of money shifted internally from Schwab Prime m-mkt funds (subject to gates and/or redemption fees) to Schwab Government m-mkt funds (no gates or redemption fees). I looked at prime-retail SWVXX specifically (I am a bit short for its Ultra class SNAXX) using Schwab website data on flows, www.schwabassetmanagement.com/products/swvxxYTD Net Flows to 3/16/23 +$21.55 billion (inflow) 7-day Net Flows to 3/16/23 -$2.11 billion (outflow) 3-day Net Flows to 3/16/23 -$3.91 billion (outflow) Peak Outflow on 3/14/23 -$3.34 billion (outflow) Fund AUM on 3/17/23 $114.51 billion It is a big fund with big numbers. I don't see problems with the numbers above in the context of the fund AUM. BTW, the OP is for ALL Schwab m-mkt funds. For SWVXX, the modified headline may be "Schwab clients pull 3.9 B from prime SWVXX in three days".
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Post by FD1000 on Mar 19, 2023 13:34:49 GMT
I wonder what are "subject to gates and/or redemption fees". From ( www.schwabassetmanagement.com/resource/swvxx-snaxx-fact-sheet) quote: "All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund, Schwab Government Money Market Portfolio, and Schwab Retirement Government Money Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency."Below is a table that compares 8 Schwab MM funds. Looks to me that SNOXX/SCOXX are the best options and what I will do. No gates/redemption(only PRIME has it) + liquidity 98/100% + all treasuries + lowest maturity + best rate if you don't want PRIME. Hint: I have over a million in Rollover IRA. That allows me to buy the better fund. I transferred one share to my Roth. I couldn't transfer to joint because the system refuse to do it because it's not marginable, which doesn't make sense. So, I called a rep, he claimed he couldn't do. The second rep did it.
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Post by yogibearbull on Mar 19, 2023 13:52:29 GMT
Posters should know that the new m-mkt reforms of 2014/16 (that created these 3 tiers* of m-mkt funds) have auto-triggers for gates/redemption fees for Prime-Retail m-mkt funds based on daily liquidity levels. Of course, the fund BOD (or firm) may waive triggers those for a reason but may not. An advance notice to shareholders is not required. This can be a problem if posters are using prime-retail funds for check writing or Bill Pay - use only government m-mkt funds for those.
*Government, Prime-Retail, Prime-Institutional
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Post by johnsmith on Mar 19, 2023 13:53:03 GMT
I think after the prime money broke the buck during GFC, new rules came into play and that's where those - fees, gates etc come from.
I think the only MM that don't have those are the treasury MM, therefore Vanguard has made that it's primary sweep fund.
I believe the above is correct, I haven't followed the issues are MMs closely.
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Post by FD1000 on Mar 19, 2023 14:22:34 GMT
Posters should know that the new m-mkt reforms of 2014/16 (that created these 3 tiers* of m-mkt funds) have auto-triggers for gates/redemption fees for Prime-Retail m-mkt funds based on daily liquidity levels. Of course, the fund BOD (or firm) may waive triggers those for a reason but may not. An advance notice to shareholders is not required. This can be a problem if posters are using prime-retail funds for check writing or Bill Pay - use only government m-mkt funds for those. *Government, Prime-Retail, Prime-Institutional Is there any advantage of Gov MM over treasury/treasury obligation MM? If there isn't, why not use treasury MM that pays more, with a bit more safety?
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Post by yogibearbull on Mar 19, 2023 14:32:18 GMT
Posters should know that the new m-mkt reforms of 2014/16 (that created these 3 tiers* of m-mkt funds) have auto-triggers for gates/redemption fees for Prime-Retail m-mkt funds based on daily liquidity levels. Of course, the fund BOD (or firm) may waive triggers those for a reason but may not. An advance notice to shareholders is not required. This can be a problem if posters are using prime-retail funds for check writing or Bill Pay - use only government m-mkt funds for those. *Government, Prime-Retail, Prime-Institutional Is there any advantage of Gov MM over treasury/treasury obligation MM? If there isn't, why not use treasury MM that pays more, with a bit more safety? Government m-mkt funds can use Treasuries, agencies, repos. Normally, they will have bit better yields than Treasury-only m-mkt funds. But these aren't normal times, or we have temporary anomalies.
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Post by perrywinkle on Mar 19, 2023 16:48:27 GMT
Is there any advantage of Gov MM over treasury/treasury obligation MM? If there isn't, why not use treasury MM that pays more, with a bit more safety? Government m-mkt funds can use Treasuries, agencies, repos. Normally, they will have bit better yields than Treasury-only m-mkt funds. But these aren't normal times, or we have temporary anomalies. One consideration is that dividends from US government obligations are generally not subject to state income tax. Per Schwab's 2022 supplemental tax information, only 18.8% of dividends from the Schwab Treasury Obligations MM Fund were from US government obligations, while 100% of the Schwab US Treasury MM Fund were from US government obligations. If the fund is held in a retirement account than it doesn't make any difference, but in a taxable account, the Treasury Obligations MM Fund may create additional tax liability.
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Post by FD1000 on Mar 19, 2023 21:18:56 GMT
Government m-mkt funds can use Treasuries, agencies, repos. Normally, they will have bit better yields than Treasury-only m-mkt funds. But these aren't normal times, or we have temporary anomalies. One consideration is that dividends from US government obligations are generally not subject to state income tax. Per Schwab's 2022 supplemental tax information, only 18.8% of dividends from the Schwab Treasury Obligations MM Fund were from US government obligations, while 100% of the Schwab US Treasury MM Fund were from US government obligations. If the fund is held in a retirement account than it doesn't make any difference, but in a taxable account, the Treasury Obligations MM Fund may create additional tax liability. Good catch, I'm going with SUTXX. I got some money in taxable. ========== hubsui: But the insurance is only $149M, thus you need to spread it over at least 2 brokers. FD: If I had over 149M, there are other things I need to worry about.
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Post by anovice on Mar 20, 2023 19:09:21 GMT
One consideration is that dividends from US government obligations are generally not subject to state income tax. Per Schwab's 2022 supplemental tax information, only 18.8% of dividends from the Schwab Treasury Obligations MM Fund were from US government obligations, while 100% of the Schwab US Treasury MM Fund were from US government obligations. If the fund is held in a retirement account than it doesn't make any difference, but in a taxable account, the Treasury Obligations MM Fund may create additional tax liability. Good catch, I'm going with SUTXX. I got some money in taxable. ========== hubsui: But the insurance is only $149M, thus you need to spread it over at least 2 brokers. FD: If I had over 149M, there are other things I need to worry about. As you know but others may not, when going from one money market fund to another with Schwab, especially with a lot of money, one needs to be careful how the transaction is handled. Let's say you sold out of SNAXX on Friday and put in a "sell and buy" or "swap" order for SUTXX. You would have sold SNAXX on Friday. On Saturday morning, you would see your money in cash, earning nothing, and today you would have bought into SUTXX. You would have lost 3 days of interest. The way to do this is put in an "exchange" order and you would have sold SNAXX on Friday and bought SUTXX also on Friday.
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Post by FD1000 on Mar 20, 2023 19:23:52 GMT
Good catch, I'm going with SUTXX. I got some money in taxable. ========== hubsui: But the insurance is only $149M, thus you need to spread it over at least 2 brokers. FD: If I had over 149M, there are other things I need to worry about. As you know but others may not, when going from one money market fund to another with Schwab, especially with a lot of money, one needs to be careful how the transaction is handled. Let's say you sold out of SNAXX on Friday and put in a "sell and buy" or "swap" order for SUTXX. You would have sold SNAXX on Friday. On Saturday morning, you would see your money in cash, earning nothing, and today you would have bought into SUTXX. You would have lost 3 days of interest. The way to do this is put in an "exchange" order and you would have sold SNAXX on Friday and bought SUTXX also on Friday. I'm never in cash. I never use "sell and buy". Exchange on the same day only works within the same family and since I usually use different families, I do the following. I pretty much have a sell trade then a buy trade at 99-97% of the proceeds, depending what I sell. At Fidelity 1) You can't sell a fund and buy another fund in IRA(trad+Roth) online. 2) You can call a rep and they will enter the buy for you at only 90% of the proceeds, it doesn't make sense for most bond funds and they have the nerve to claim it is SEC rules.
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Post by Chahta on Mar 20, 2023 23:53:54 GMT
As you know but others may not, when going from one money market fund to another with Schwab, especially with a lot of money, one needs to be careful how the transaction is handled. Let's say you sold out of SNAXX on Friday and put in a "sell and buy" or "swap" order for SUTXX. You would have sold SNAXX on Friday. On Saturday morning, you would see your money in cash, earning nothing, and today you would have bought into SUTXX. You would have lost 3 days of interest. The way to do this is put in an "exchange" order and you would have sold SNAXX on Friday and bought SUTXX also on Friday. I'm never in cash. I never use "sell and buy". Exchange on the same day only works within the same family and since I usually use different families, I do the following. I pretty much have a sell trade then a buy trade at 99-97% of the proceeds, depending what I sell. At Fidelity 1) You can't sell a fund and buy another fund in IRA(trad+Roth) online. 2) You can call a rep and they will enter the buy for you at only 90% of the proceeds, it doesn't make sense for most bond funds and they have the nerve to claim it is SEC rules. I regularly buy and sell the same day at Schwab (not same family). Their only limitation is the buy cannot be sold until after settlement.
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