Investor Brain

Tuesday, July 11, 2006

Rate Cuts by Brokers and Mutual Funds Make the News

Though “The Electronic Investor” has noticed this trend in the not-too-distant past, it’s good to see other media outlets picking it up.

The Wall Street Journal published an article about cuts in brokerage commission rates over the last few months, saying that heightened competition is driving prices lower.  Subscribers to the Wall Street Journal Online can read the article, “Online Stock Trades
Get Even Cheaper,” by clicking here.

Also of note are recent management fee cuts by mutual funds, as detailed by the LA Times in their article, “Firms Slash Fees as Investors Flock to Low-Cost Portfolios.” You can read that article, after a free “registration” process, by clicking here. 

Wednesday, June 28, 2006

TD Ameritrade Outage -- A Brief Update

It’s been tough to drag additional information out of my contacts at TD Ameritrade this week.  I’ve asked the same question at least ten times now—How many customers were affected by the outage?—and cannot get a response. 

They’re telling me that they’ll deal with each affected customer individually; what I’m hearing is that the company is offering free trades to those who step up and say they couldn’t log in.  When E*Trade flamed out during the Harrisdirect conversion, they made a blanket offer of five free trades to every account converted because the mess hit them all. 

But TD Ameritrade is not giving free trades to all 2.2 million accounts acquired from TD Waterhouse.  Overworked corporate communications rep Kim Hillyer says that “a subset” of customers was affected, but can’t seem to tell me how many accounts are in that subset. 

Mark Lichtenfeld, senior columnist at TheStreet.com, holds one of the affected accounts.  He wrote a column about it, “The Real Story: TD Ameritrade Goes On the Defensive,” but most of the two-page story discusses TD Ameritrade’s stock valuation rather than the technical glitch. 

Wednesday, June 21, 2006

TD Ameritrade Outage Generates Outrage

Over the weekend, TD Ameritrade implemented a security upgrade as part of their integration campaign to bring together the Ameritrade and TD Waterhouse platforms.  Unfortunately, the upgrade caused new problems, some of which prevented a bunch of former TD Waterhouse customers from logging in to their accounts

As usual, what happens as soon as an outage at a large online broker occurs, Barron’s readers notify me of the situation.  The notification is usually worded in a business-like manner, but some of those affected get frustrated by long waits on hold at their broker, and just cut loose when they write to me. 

What happened with the upgrade, according to TD Ameritrade’s Donna Kush, was that the TDW customers were sent to a different login page.  At their former login, they could opt to store their user ID, but that was not automatically stored at the new site.  So folks who were used to having their computer enter that long string of numbers had to dig out the account number and type it in again.  And again and again, since the new system, for security purposes, doesn’t store their account numbers.

During the process TD Ameritrade also experienced what Kush calls “some technical issues,” which resulted in some former TDW clients not being able to log into their accounts.  Kush reports a backlog of customer support calls on Monday, but says that volumes dropped off Tuesday and today. 

Kush says that TD Ameritrade fixed the problem ASAP, is implementing a software change tonight, and will continue to monitor the situation.  “We expect that that will help improve the situation as soon as possible.  We’ve also contacted affected clients by email and phone to apologize and explain the issue.  We’ll continue to give them updates on the situation,” Kush says.

I took a look at some of the message boards that discuss TD Ameritrade at Yahoo Finance and saw a lot of anger.  I’m getting emails asking how long it takes to get an account moved to another broker.  That process takes long enough that it shouldn’t be done lightly or in anger, folks.  And some brokers charge a fee to move your assets away, though others will pick up the cost upon request.  Hmm.  Sounds like a good excuse for part of a column sometime.