Gyroscopic Investing

The Brokerage Customer Is Always Wrong

https://www.forbes.com/forbes/2009/1214 ... 5f566812be

'When financial planner Matthew Lechner put in an order with Fidelity Investments Institutional Services Co. three years ago to sell $100,000 worth of his family's Connecticut general obligation bonds, he assumed they'd be posted on a national broker-dealer network where they'd fetch the best possible price. He inquired and says he was shocked when Fidelity replied that it intended to execute his sell order within the firm.

Figuring such a move would result in an inferior price, the Westport, Conn. resident threatened to report Fidelity to regulators. The firm put his bonds out to bid the same day. They went for $103,000, which Lechner says is $1,000 more than he would have received under Fidelity's original proposal.

Six Steps To Prevent Being Ripped Off By Your Broker

Over the next two years Lechner repeatedly pushed Fidelity, sometimes in colorfully worded language but to no avail, to disclose whether its bond mutual funds trade the same way. Then last year Lechner received a letter declaring Fidelity could not "provide the level of service that you require" and that Lechner should take his business elsewhere. Fidelity says it is standard policy to execute bond orders within the firm, unless customers specifically request that they be displayed on a broader market."




Does Fidelity STILL operate like this???!!!

Would it have any impact in selling a long-term treasury that one holds with them?


Vinny

MangoMan wrote: ↑Fri Sep 04, 2020 8:38 pm Mutual funds trade at the net asset value of all holdings as of the close of the market on that day. Unless the value of the bonds is subjective, IDK how that would be a problem.

I was not clear that I was referring specifically to Treasury bonds that one owned, not through a mutual fund.

Vinny

all brokerages have different exchanges and deals .. that is why they offer zero commission trades ... they make it up in the trades .

Up here in Canada I am using a service called WealthSimple Trade. They don't sell order flow and don't charge any commissions or account fees. They purely make money through currency conversion when buying assets off of foreign exchanges.

Since I only buy funds traded on Canadian exchanges I am paying them absolutely nothing. Let the more adventurous traders and speculators foot the bill.