|
|
Subject:
Investment accounts that allow debit card access? Sub accounts?
Category: Business and Money > Finance Asked by: nyreefer-ga List Price: $150.00 |
Posted:
28 Jun 2006 10:44 PDT
Expires: 28 Jul 2006 10:44 PDT Question ID: 741768 |
I am looking for an investment account with (hopefully) a discount firm that allows Debit card ATM access directly to the investment account. Most firms I have tried seperate the investment and banking business (ie. Etrade, Ameritrade, etc)- you cannot use your debit card to directly access your investment account. Second part- The same firm would also allow sub accounts (which would have the right to a certain % of the parent account's money). For example a Main account would have sub-accounts A, B, C & D, each holding the equivalent of a set % of the market value of the Main parent account, based on the individual's investment of the sub account. I have not found a firm that can divide up these accounts like this (ie Etrade, Ameritrade, etc.) Basically I am setting up an investment group where 10 friends are getting together to pool our money and make investments together (commodities will be held, as well as equities). However we need debit card access to these accounts, this is a non-issue and has to be in place. Each person will contribute their own money, so each would have the entitlement to that proportional % of the total pooled assets. As a person withdraws cash using the debit card, their % entitlement of the total assets will decrease accordingly (though they would be able to deposit more as they wish, increasing the % share again). The cash would then sweep from the main account to cover the withdrawn amount. No one would be able to withdraw more then their correct % from the account. If there was not enough free cash in the main account to draw from, ideally the account would know which items to sell in order to free up the cash (based on a basic hierarchy). Sub-accounts are not neccassary as long as there is a way to put a limit on the amount the individual could withdraw from the main account. This would change dynamically with the market value of the Main account, and would be based on a percentage of the main account. As the market value of the Main fund rises/drops, so too will the value of the individuals entitlement. Leverage will NOT be used. No shorting will be done. Might sound complicated, but its not: 1) Debit card access to invesment accounts 2) Sub accounts based on % of contribution 3) Low trading rates, as assets will need to be sold frequently to free up cash as members withdraw funds. 4)Ideally the trading to free up cash would be triggered automatically. 5) The ability to see each individuals % value (especially if they go into the red- for example they withdraw money after hours, then the value drops next open) would also be needed. I have tried Trade Station- they do not offer debit card access to their accounts. They also charge an arm and a leg per sub account and have an extremely high minimum account balance. I do not want to have to add funds if the value drops below a certain threshold. Please do not answer this question quickly (and a 'this is not possible' is not acceptable). Only detailed productive answers regarding a specific investment company with which I could do business, an estimate of costs, legal issues, infrastructure, etc. (or how to go about this if a specific company is not available)- would be acceptable. Basically what I would need to set something like this up. Thanks! |
|
There is no answer at this time. |
|
Subject:
Re: Investment accounts that allow debit card access? Sub accounts?
From: ubiquity-ga on 28 Jun 2006 11:17 PDT |
This is not an answer to your question, but you may have securities law issues that need to be worked out. I would find myself a good securities attorney before I proceed with your investment club/ pooled vehicle fund or whatever u want to call and intend to form it as. By the way debiting money out of an account is problematic in the sense that unless you want to pull money out of a cash reserve portion of an account, how does one decide which investments to liquidate (or worse loan you the money on margin)? If they do it prorata by all the investments, the transaction costs can be very large, especially for a relatively small withdrawal. if the broker has discretion, then all the sudden he becomes an investment adviser under the IA Act of 1940. In sum, think through the mechanics of how this is supposed work. |
Subject:
Re: Investment accounts that allow debit card access? Sub accounts?
From: nyreefer-ga on 28 Jun 2006 12:55 PDT |
thanks for the comment! in terms of the withdrawals- there would be a specific asset sold off to raise cash, there would be no discretion involved. I know this could probably be done using a sophisticated program such as Tradestation to automate the flow of funds- but the debit card issue comes up here (they are not a bank and do have debit card built into their structure), as well as the sub accounts. With the deep discounts a place such as Tradestation would give (< .01 cent a share to buy/sell) I would not be too concerned about transaction costs. We would not be able to do this using a higher priced broker unless it was a fixed monthly cost with unlimited trades... I had thought of the possibility of each card itself being linked to a percentage of the assets, without using sub accounts. Also, a way to link an online checking account with an account similar to the structure TradeStation would give? As the individual withdraws money out of the bank, say overdraft protection automatically sweeps the funds from the investment account? Or (probably getting a little silly here) overdraft protection linked to a main credit card - which is then paid off (daily, weekly) with assets manually sold from the Main account? hmm...thoughts on that? Thanks again, any help is greatly appreciated! |
Subject:
Re: Investment accounts that allow debit card access? Sub accounts?
From: nyreefer-ga on 20 Jul 2006 12:35 PDT |
No one can help? |
Subject:
Re: Investment accounts that allow debit card access? Sub accounts?
From: pafalafa-ga on 27 Jul 2006 04:52 PDT |
You may find the brief discussion of 'unanswerable' questions -- yours included, I'm afraid -- to be of interest: http://web-owls.com/2006/07/23/qinans-the-untouchables/ |
Subject:
Re: Investment accounts that allow debit card access? Sub accounts?
From: myoarin-ga on 27 Jul 2006 15:04 PDT |
Nyreefer, "...(and a 'this is not possible' is not acceptable)." For a price, maybe anything is possible, but you are asking for something that will require the company managing the investment account to handle accounting matters that are just not normally provided. To set up what you are desiring would require a complicated descriptive contract, AND THEN the company would have to establish special controls to assure that the contract was followed. It is unlikely that a company would want to do this, perhaps also because it would anticipate problems of being responsible for an account for ten friends. No discount house will do this; their principle is "simple and straightforward". In case you don't know, debit card charges are debited to an investment account's cash balance or a daily money market funds account. If this is empty, the debit overdraws the cash account, a loan secured by the investment account, if you will, "margin". "If there was not enough free cash in the main account to draw from, ideally the account would know which items to sell in order to free up the cash (based on a basic hierarchy)." I think this would be possible only if you and your friends agreed to totally managed account, where the advisor was given full authority on investment decisions. Just a personal comment as a retired banker: investment funds should be segregated from funds available and necessary to cover ongoing expenses. What you are suggesting doesn't do this. You are anticipating that ongoing expenses via debit cards could result in sale of securities. This would undermine the principles on which investments were originally made. If the investment pool is to remain viable - and the ten friends remain friends - they should not put so much of their funds in the pool that they do not individually have cash available for their own use. Adhering to this principle - which any investment councellor would recommend - would avoid all the problems that your concept involves. Sorry to be such a wet blanket. Regards, Myoarin |
If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you. |
Search Google Answers for |
Google Home - Answers FAQ - Terms of Service - Privacy Policy |