eTrade vs. TD Ameritrade (IRA, brokers, fund, trading)
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I'm confused about something. Why does eTrade (ETFC) always lose money while TD Ameritrade (AMTD) has very consistent profits? Aren't they in the exact same business?
One may have a different tax rate that the other, higher debt, dividends to pay, lower commissions, less customers, etc.
It is not hard to create a competitor. Trade King is a recent start up I think, and they take customers away from the others. Maybe by offering lower cost. Such firms might take more customers away from Etrade than they do from TD. Etrade only requires $500 to open an account.
So, no offense to any Etrade account holders, but it is not hard to become an Etrade customer. TD has a "different" class of customers with their accounts requiring larger deposits ($2000). They may offer more services and they keep more customers from switching to someone else.
Etrade will be taken over by someone at some time.
TD appears to offer IRA's and Etrade does not.
TD is closer, than Etrade, to being a full service broker like Charles Schwab.
Schwab offers online commissions, etc. but if you want a home loan Schwab offers that too.
If you want to buy foreign stocks or penny stocks on the pink sheets, or speak to their international trade desk, Schwab has it.
TD Ameritrade may offer some of that too, whereas Etrade may not.
TD appears to offer IRA's and Etrade does not.
TD is closer, than Etrade, to being a full service broker like Charles Schwab.
Schwab offers online commissions, etc. but if you want a home loan Schwab offers that too.
If you want to buy foreign stocks or penny stocks on the pink sheets, or speak to their international trade desk, Schwab has it.
TD Ameritrade may offer some of that too, whereas Etrade may not.
Etrade does offer IRA
Etrade also let you buy foreign stocks
I have both Schwab and Etrade. I am not sure about service etc.
But Etrade's interface is far superior than Schwab's. Schwab UI looks like a class assignment of a web development training from one of those training institutes.
But nevertheless, you have all the options and nuts available to trade
One may have a different tax rate than the other, higher debt, dividends to pay, lower commissions, less customers, etc.
Thanks for these suggestions. When I looked at the income statements, I saw that eTrade has substantial "interest expense" payments whereas TD Ameritrade has almost no interest expenses. That appears to be the difference as to why they are at polar opposites of profitability.
So not only is TD Ameritrade extremely user friendly, but they also have a superior corporate structure that isn't weighed down by debt like eTrade is.
Thanks for these suggestions. When I looked at the income statements, I saw that eTrade has substantial "interest expense" payments whereas TD Ameritrade has almost no interest expenses. That appears to be the difference as to why they are at polar opposites of profitability.
So not only is TD Ameritrade extremely user friendly, but they also have a superior corporate structure that isn't weighed down by debt like eTrade is.
Skimmed through news articles about their annual report and it looks like got hurt from bad bet loans they made on US real estate.
At the peak of the housing boom, ETrade got into the mortgage origination business. They wanted to become a complete personal financial services provider (investments, deposits, loans). They'll be paying for that mistake for many more years, as they have a lot of bad loans on their books that haven't been written off. (That's why their stock plummeted in 2007-08.)
TDA is among the more financially conservative brokers out there. They don't have substantial leverage. I think Schwab is fairly leveraged, last I looked at their SEC filing
However, my TDA account has occasional mistakes with the accounting (sometimes my balance is incorrect). They fix the problem quickly each time but it's pissing me off that it even happens in the first place
Wow, good info. I never realized eTrade got involved in bad mortgages. I was going to sell my ETFC shares anyway, but now I will for sure. I'll probably pick up some AMTD with the proceeds. Thanks.
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