A few years back I opened custodial UTMA accounts for each of the children and made birthday and Christmas gift deposits. Mrs. Dress Pockets and I were dabbling with minimalism and buying plastic toys in excess didn’t seem like something we wanted to endorse.
For the older two children I stumbled across Stockpile which provides a hip mobile app the children access with their own userid and password. Stockpile allows fractional share purchases of VTI and dividend reinvestment. At the time, there was a small 99¢ commission to buy and sell stocks which seemed like a reasonable trade for the app and custodian/child access model.
There is some minimal stock market education in the Stockpile app which landed with a thud. Had the children wanted to research and purchase fractional shares of companies, I’d like to think I would’ve given them the green light. But not without boring them to tears with the superiority of passive index investing.
The younger two children ended up at Schwab most likely because they don’t have smartphones and I read Schwab was rumored to introduce fractional ETF share purchases. I bought them each 1 share of VTI and the remainder sat in cash for a year until I gave up waiting on fractional ETF shares and bought SWTSX instead. Schwab would eventually roll out Stock Slices but only for S&P 500 company stocks.
Fast forward a few years and I get a Stockpile email about their plans to remove website account access forcing everyone to only use the mobile app. Uh, but you can’t download and save statements in the current app and the app isn’t supported on my precious iPad. Seemed a bit fishy for what I assume is company cost cutting so I decided I’d transfer the oldest child’s Stockpile account to Schwab, let the dust settle, and eventually transfer the other Stockpile account after the next quarterly VTI dividend.
The account transfer process was mostly painless and my part was complete in 30 minutes of web browser data entry, signing a prefilled pdf, and uploading a recent Stockpile statement. Similar to cell phone porting, you want to start the process with the new company and not the existing company. I learned that only whole shares of stock/ETFs would be transferred. Any fractional shares would be sold and the cash transferred. Fingers crossed the cost basis follows a few days after the shares but keep good records of the original cost basis just in case. Stockpile uses Apex Securities as their clearing house and Apex has a $75 fee to transfer an account. Lame but the torpedo was already launched. I transferred extra cash to cover the breakup fee and selling of fractional share in the down market.
A few more weeks pass and another Stockpile email arrives about a new membership funding model. It seems my spider sense was tingling. While there is a grandfather option to pay $20 for life, I don’t appreciate the limited time to make a decision (2 weeks). And only 4 weeks until you default into paying a $4.95 per month. No time to wait for the VTI dividend, back to Schwab to open a new custodial account, and initiate the last Stockpile account transfer. Done.
Schwab’s [1] website and app are boring but sometimes boring is good. Sorry kids, you’ll have to ask me to see your account balances. Some day between the ages of 21 and 41 you may thank your mom and I for the gift of stock market index funds and compound growth. For now, you’d rather have more plastic toys. I understand.
Happy Father’s Day!
[1] Schwab but also Fidelity and Vanguard. In fact the Fidelity and Vanguard apps are so lousy, I’d rather just use the websites.
