Investing in funds via broker, funds in brokers name not mine
Investing in funds via broker, funds in brokers name not mine
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brownie74 · External communityPost link
External question — Personal Finance Stack Exchange
Author: brownie74
Original post: https://money.stackexchange.com/questions/145833
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As the question states. I am considering investing in funds via a local broker who has quite a good reputation. It was pointed out to me that the funds, eg. BlackRock, would have no record of my name. They would have the investment under the brokers name.
Is this standard?
Is there any downside to the investment not being in my name with BlackRock?
Is there any upside?
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Pete B. · External communityPost link
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Author: Pete B.
Original post: https://money.stackexchange.com/a/145834
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This is a massive red flag and unsure why you would even consider this. This is not standard and opens yourself up to having the money "stolen". Since the money is in his name he can do with it as he pleases.
Blackrock is a mutual fund/EFT house that trades such that they are available to anyone. There is nothing special or exclusive about them.
You can easily open a Fidelity, Schwab, or Vanguard account, put money into the account, and invest in Blackrock products for free. No account fees, no trading fees. Sure there will be fees charge by Blackrock, but that would happen anyway if you go with this broker or not.
Perhaps you are considering using this guy because he can "beat the market". I call "false". If he is using Blackrock securities then he is just like every one else. Nothing special.
How large is your portfolio and what is your age? If you are under 250K and under 50, just go 100% with a S&P500 fund. You will do fine. If you go with Fidelity (currently they are offering a $100 bonus to sign up) go 100% FXAIX. Vanguard and Schwab have similar options. Doing this, you will beat 98% of the actively managed accounts and I strongly doubt this guy is in the 2%.
The account will be in your name and you can check your balance daily if you like. I would avoid doing so, but recommend checking your account monthly.
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D Stanley · External communityPost link
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Author: D Stanley
Original post: https://money.stackexchange.com/a/145835
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Is this standard?
Yes it's the default for most brokers. This is called "street name" registration. The securities are held in the broker's name and the broker maintains records of who holds what shares.
Is there any downside to the investment not being in my name with BlackRock?
If the broker is SIPC insured, then you are covered for up to $500k of securities ($250k of which can be in cash) for losses due to fraud or bankruptcy of the broker. You should still get access to all proxy votes, can sell at any time, etc. You still have ownership and full control you just aren't the listed owner according to Blackrock's records.
Is there any upside?
Probably nothing significant. The broker can handle transactions easier if they're just maintaining records of buys and sells, and their costs may be less if they're not having to pass on every order to the fund company, but for the most part it should be transparent to you.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: Pete B. Source score (net votes, not local likes): -4 Original post: https://money.stackexchange.com/a/145834 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. This is a massive red flag and unsure why you would even consider this. This is not standard and opens yourself up to having the money "stolen". Since the money is in his name he can do with it as he pleases. Blackrock is a mutual fund/EFT house that trades such that they are available to anyone. There is nothing special or exclusive about them. You can easily open a Fidelity, Schwab, or Vanguard account, put money into the account, and invest in Blackrock products for free. No account fees, no trading fees. Sure there will be fees charge by Blackrock, but that would happen anyway if you go with this broker or not. Perhaps you are considering using this guy because he can "beat the market". I call "false". If he is using Blackrock securities then he is just like every one else. Nothing special. How large is your portfolio and what is your age? If you are under 250K and under 50, just go 100% with a S&P500 fund. You will do fine. If you go with Fidelity (currently they are offering a $100 bonus to sign up) go 100% FXAIX. Vanguard and Schwab have similar options. Doing this, you will beat 98% of the actively managed accounts and I strongly doubt this guy is in the 2%. The account will be in your name and you can check your balance daily if you like. I would avoid doing so, but recommend checking your account monthly.
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