Summery
- Free trades. Up to 10 per day and 40 per month
- Free real-time quotes
- No inactivity or other account fees.
- Money Market Sweep so your cash earns around 4.3% while "on-deck"
- IRAs at $30/year also with the same free trade allotment.
- Market, limit, stop-limit, and trailing ($) orders all free
- If you leave Zecco, the ACAT fee is $50, which I find to be quite low
- Can trade no-load mutual funds, but cost is $10/trade. ETFs are free since they are essentially stocks.
- Dividend re-investment available, but Zecco only deals in whole shares
Important Links
Link to Zecco pricing and price comparison:http://www.zecco.com/trading/FreeTrading.aspx
Link to the FAQ where most questions are answered, You'll find info on subjects ranging from how Zecco makes money to security and insurances.
http://www.zecco.com/trading/TradingReference.aspx?tab=FAQ
Rafe's FAQ
If I transfer my TD Ameritrade account what will happen to the fractional shares I now own??Check with TDAmeritrade to be sure, but they should liquidate for free and send the proceeds 1-2 weeks later without additional fee (it should fall under the same transfer)
Does Zecco offer free DRIP services?
As in dividend re-investment program? Yes but only whole shares. Fractions are paid as cash.
Should I open the Zecco account first and then request the transfer into it? (I also have a TD Ameritrade ROTH-IRA to transfer)
For a regular account you can open it and fund it at the same time with an ACAT (transfer). For the IRA you have to wait for the account to be completely active before you can submit the ACAT (or any other type of funding request). For those who are new to Zecco, I suggest opening a regular account, and putting a small amount of money in to give it a test run. They removed the minimum deposit requirements for non-margin accounts, so you can deposit $1 if you want. See the section below for more into on transfer types and times.
Does Zecco offer a download of sales for a tax year into Turbo Tax like TD Ameritrade does?
I know they download to MSMoney and Quicken. I bet TurboTax uses the Quicken file format, but I'm not sure. The download is the best I have used. It takes a date range so you can do any amount of time, and Quicken (at least) filters for repeated transactions, which makes things really easy.
Customer Service & Review
I've moved all of my broker accounts (portfolios) to Zecco.com and I couldn't be happier. There are a couple of bumps, but Zecco has only been around since late 2006, so some issues should be expected. Surprisingly though, I experienced more at BofA Investment Services and InteractiveBrokers, than I have at Zecco.
Zecco is not just listening to feedback, but acting on it. Several of us (MotleyFool:HiddenGems members) are active on their customer feedback user-group, and there are signs that they are addressing our issues. For example, during the third week of April 2007, Zecco emailed out a survey to their customers which asked questions regarding just about every area of feedback. In march (I believe it was), they completely redesigned a large part of the account management interface. It has been impressive to watch the speed of the improvements. Having been on a development team professionally, I feel I'm well qualified to make such a statement.
Now you are probably thinking, "That's some pretty smoke your blowing up our A$#es, but what Issues?" Well, the phone system when calling a customer service rep is absolutely awful. You'll hear the statement about finding answers in the online FAQ about 6 times before your through it. The key is to not listen and just dial 2-4-1-1-1!
UPDATE: (07 SEPT 2007) I just called for some help on a few items, and I noticed they finally updated their phone menu system. I just pressed 1 for trade help and another selection for "all other..." and I was in the hold queue. They moved the "You can get help on-line by visiting our FAQ..." line as part of the on-hold in-queue audio. Much much better now!
I still had a 5-10min hold time, but it was peak hours, so forgivable. As always the guy on the phone was more patient than I could believe as I jumped between websites to try and figure out where my records had gone wrong.
I have found the email customer service to be laughable as well. There we're times where I wondered if they were even reading the questions.
There is a silver lining to this though. These issues are surface level and can be addressed easily. As I said before, Zecco is listening and there were questions about the phone and email systems on that survey I mentioned. I say surface level, because the customer service representatives have been very good. Once you get a person on the phone, it is a pleasant experience. They have been able to answer every question (and I call on behalf of the HiddenGems message board looking for answers sometimes, so I've asked some crazy questions!). If the rep has any doubt, they can transfer you to a specialist who knows the rules and laws of the trade. I have even had a customer service rep call the clearing house, to find out the details of a transfer, while I was still on the phone.
Signing Up, And What To Expect
Coming soon...Transfers
ACH
ACH stands for "Automated Clearing House". An Automated Clearing House is a financial institution which is used by all banks and brokerage firms to transfer funds and holdings back and forth. When you hear the term ACH, however, it refers to a cash transfer. ACH transfers are always free and take between 2 and 7 business days. In reality this is rarely the case. The standard expectation is 2-4 days. In my experience, Zecco tends to be on the very fast side. Usually within 2 days, or if posted early enough in the day, the day of the posting can be counted. It is very rare, but I have had a transfer make it the next day. In general it is better to expect 3 days and be consistently, pleasantly surprised.Before you can place an ACH transfer you have t establish an "ACH Relationship" between the two financial institutions. I have done this at banks, direct banks and 3 brokers and it has always worked the same way. You initiate the process at either end (I use the Zecco interface but I assume I could do it from the bank side to). An ACH transfer period later (2-4 days), two small transactions appear in your account. One deposit and one withdrawal. They are usually just $0.05-$0.30 each. When this happens, simply go back to the origin of the process and enter these amounts. This is how the system verifies the relationship is good. Now you are free to make your first real transfer. A couple of days later, those two small transactions will reverse themselves.
ACAT
ACAT stands for "Automated Customer Account Transfer". You file the request at your new broker and pay your old one for the transfer itself. So if you transfer out of Zecco, you will file at your new broker and Zecco will charge $50 (at the time of this writing). This isn't a bad price either. BofA charged me $75.You have the option of transferring single positions, or an entire account (portfolio). When you do the entire account, there is an option to bring over cash balances as well. Also, Zecco doesn't handle partial shares, so your old broker will have to liquidate them. It is common for this to be free, and the broker should then send the proceeds to your account about a week later. I have heard of at least one case where this was not true, so I recommend checking with your old broker.
When the ACAT lands at Zecco, the cost basis (or average paid/share) will be $0. The reason for this is that information regarding share-lots (a block of shares purchased together for a single stock) is tracked by the broker and not kept in the portfolio. So when you transfer a holding, it is lost. The upside, is you get to tell the IRS anything you want when sell. To setup your cost basis at Zecco, simply email them the ticker and the cost basis and they will set it for you with in a couple of days.
I have heard there are some brokers which allow you to set the cost basis yourself. It is possible Zecco will allow this later, but I'm not aware of any plans to change it. I have gone through this process twice now and it really isn't a big deal.
[This document is a work in progress...]