Schwab Information Thread with FAQ, Links, Tips and Q&A

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happenstance
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by happenstance »

Barefootgirl wrote: Mon Sep 27, 2021 2:23 pm Just met with the local Schwab rep about a new account, etc. He was professional, knowledgeable, congenial.

We discussed opening a checking account along with the new brokerage account.

I haven't been happy with my current "hub" bank for awhile and am seeking a new one...for direct deposit, transfers, check cashing, etc.

For those who use Schwab for banking - any issues? any reasons they would NOT be a good hub bank? (my definition is as my primary banking relationship - although I have other banks for other reasons) Thanks
I use Schwab as my hub bank and think they are excellent. Unlimited ATM fee reimbursements, no foreign transaction fees, fast ACH pushes, bill pay (clunky website, but it works), solid mobile app with check deposit, and the same great customer support (e.g. spouse once had an ATM in a foreign country disburse less than the requested amount, and Schwab fixed it within a day). And because of the size of my brokerage account, I also get free outgoing wires and cashiers checks.

Their interest rates on the checking account are not great (nor on their “high yield” savings account), so I still use Synchrony/AmEx for HYSAs. But my ACH pushes from Schwab arrive the next day (sometime same-day to AmEx).
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by Barefootgirl »

Apparently, VUSFX -

Vanguard Ultra-Short-Term Bond Fund Admiral Shares

does not have an ETF.

Verifying that my only two choices are: (1) sell and pay any taxes before transferring to Schwab or (2) just continuing to hold at Vanguard?

Thoughts? Thanks
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8foot7
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by 8foot7 »

happenstance wrote: Mon Sep 27, 2021 2:46 pm
Barefootgirl wrote: Mon Sep 27, 2021 2:23 pm Just met with the local Schwab rep about a new account, etc. He was professional, knowledgeable, congenial.

We discussed opening a checking account along with the new brokerage account.

I haven't been happy with my current "hub" bank for awhile and am seeking a new one...for direct deposit, transfers, check cashing, etc.

For those who use Schwab for banking - any issues? any reasons they would NOT be a good hub bank? (my definition is as my primary banking relationship - although I have other banks for other reasons) Thanks
I use Schwab as my hub bank and think they are excellent. Unlimited ATM fee reimbursements, no foreign transaction fees, fast ACH pushes, bill pay (clunky website, but it works), solid mobile app with check deposit, and the same great customer support (e.g. spouse once had an ATM in a foreign country disburse less than the requested amount, and Schwab fixed it within a day). And because of the size of my brokerage account, I also get free outgoing wires and cashiers checks.

Their interest rates on the checking account are not great (nor on their “high yield” savings account), so I still use Synchrony/AmEx for HYSAs. But my ACH pushes from Schwab arrive the next day (sometime same-day to AmEx).
+1. Schwab Bank is excellent. And if you use Amex savings you can transfer from there to Schwab on the same day for free if you request the transfer before 11 AM - Schwab will post the same-day ACH around 4 PM Eastern. No fees on either end. It's a great combination, and I think you'd really have to work at it to encounter a charge for something.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by sycamore »

Barefootgirl wrote: Mon Oct 04, 2021 10:46 am Apparently, VUSFX -

Vanguard Ultra-Short-Term Bond Fund Admiral Shares

does not have an ETF.

Verifying that my only two choices are: (1) sell and pay any taxes before transferring to Schwab or (2) just continuing to hold at Vanguard?

Thoughts? Thanks
Schwab does offer the Investor shares class (VUBFX). Maybe you could ask Vanguard to downgrade your Admiral shares to Investor shares, and then transfer to Schwab?

Vanguard recently brought an Ultra Short-Term Bond ETF VUSB, but it's a separate fund altogether from VUSFX (not just a different share class), so you can't just switch share classes. Just FYI in case you decide to sell VUSFX and buy an ultra short ETF and want to keep using a Vanguard fund.
Last edited by sycamore on Mon Oct 04, 2021 2:30 pm, edited 1 time in total.
tj
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by tj »

You wouldn't think the Ultra Short Bond fund has wide movements in price. What would the tax liability be if you sold and bought the ETF? You might even get a slight tax loss.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

Barefootgirl wrote: Mon Oct 04, 2021 10:46 am Apparently, VUSFX -

Vanguard Ultra-Short-Term Bond Fund Admiral Shares

does not have an ETF.

Verifying that my only two choices are: (1) sell and pay any taxes before transferring to Schwab or (2) just continuing to hold at Vanguard?

Thoughts? Thanks
I believe the admiral shares can be transferred in, but you can't buy more at Schwab without being an institution.

I had PYLMX there for a while, it's NTF with net ER of 0.25%. But, I decided ultrashort was not worth owning some time ago due to the low yields.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by nalor511 »

Someone who has transferred OUT of Schwab in the past year - were you charged $50 per account (as stated in their pricing guide), or were you charged $50 per position (as I fear)? If your fee was waived please do not reply. Thank you!
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

galawdawg wrote: Thu Aug 05, 2021 8:53 am
  • Will Schwab waive the transaction fee?
Yes, in some cases. Generally, Schwab requires a total portfolio size of $250k to waive all mutual fund transaction fees for a single fund family (such as Vanguard). Some report that the required portfolio size is as little as $100k. If you qualify for a fee waiver, it will apply to all of the Vanguard mutual funds available for purchase at Schwab. (Note: Media reports indicate Schwab is raising the transaction fee to purchase VG mutual funds to $74.95. Whether that will impact the granting of fee waivers is unknown at this time).
    The upcoming change to $74.95 does not appear to have changed anything with regard to a waiver, I asked for and received the fee waiver for Vanguard funds last week. They have not yet actually raised the fee, but I am assuming they'd not be granting a waiver now, only to take it away next month or whenever they are raising that fee.

    One thing l had not realized is that the waiver is across all our accounts, I'd thought it would be per account. So our tiny taxable account, where I use Vanguard index mutual funds in order to have the same tax advantages as ETFs, can now be moved over to Schwab without losing that as a result.
    drzzzzz
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by drzzzzz »

    For those who have gotten Schwab to waive fees on purchasing Vanguard funds, can you purchase all Vanguard funds or just some? and do you need to call in to have this done by a person on the phone or can you do the purchases yourself through their site? Lastly, does the site still say you are suppose to pay a transaction fee and it is rebated later or the fee never shows up?
    thanks
    nalor511
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by nalor511 »

    drzzzzz wrote: Sat Oct 16, 2021 9:51 pm For those who have gotten Schwab to waive fees on purchasing Vanguard funds, can you purchase all Vanguard funds or just some? and do you need to call in to have this done by a person on the phone or can you do the purchases yourself through their site? Lastly, does the site still say you are suppose to pay a transaction fee and it is rebated later or the fee never shows up?
    thanks
    All (or, all that I've tried, VTSAX,vtiax,vtmgx,VEMAX) , there is no fee on the confirmation page, no rebate necessary, I transact myself online (no calls). 2 weeks ago I bought $13 of VEMAX, no fees
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by increment »

    drzzzzz wrote: Sat Oct 16, 2021 9:51 pm For those who have gotten Schwab to waive fees on purchasing Vanguard funds, can you purchase all Vanguard funds or just some?
    Schwab does not offer all the Vanguard funds, fee or no, although they do have the Boglehead-friendly ones.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    drzzzzz wrote: Sat Oct 16, 2021 9:51 pmFor those who have gotten Schwab to waive fees on purchasing Vanguard funds, can you purchase all Vanguard funds or just some? and do you need to call in to have this done by a person on the phone or can you do the purchases yourself through their site? Lastly, does the site still say you are suppose to pay a transaction fee and it is rebated later or the fee never shows up?
    thanks
    The notification that I got says: "Schwab will waive the mutual fund transaction fee on any Vanguard mutual fund shares purchased online through your Schwab account(s)." Of course, it also says: "This waiver is made at Schwab's discretion, and Schwab reserves the right to revoke this waiver at any time without advance notice."

    Admiral shares of active funds are listed as being available to institutional customers only on Schwab's site. So you can not buy those, with or without a fee, unless you are an institution or a client of an advisor. I tried one for VWIAX and got a message saying: "This order cannot be placed...We cannot process your order because shares for this fund are only available to institutional customers."

    A screenshot of what you will see, including transaction fee of $0 was posted here: viewtopic.php?p=6162588#p6162588
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by drzzzzz »

    Thanks for all the replies regarding purchase of Vanguard mutual funds - very helpful
    J295
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by J295 »

    Apologies if this is covered up thread .....

    Sister is retiring and moving 401k to Schwab and having an all in one fund may be a lot more appealing to here than doing something like I do (50% US and International index funds, 30% BND and TIP, and 20% ibonds, CDs, st bonds, etc.)

    So, as a Schwab investor is there something you all might recommend in the 50/50 range ? Although not a Schwab fund, perhaps Wellington is a good choice (heck, maybe I should simply further and just go to Wellington?).

    Thank you.
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    happenstance
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by happenstance »

    J295 wrote: Mon Oct 18, 2021 10:42 am Apologies if this is covered up thread .....

    Sister is retiring and moving 401k to Schwab and having an all in one fund may be a lot more appealing to here than doing something like I do (50% US and International index funds, 30% BND and TIP, and 20% ibonds, CDs, st bonds, etc.)

    So, as a Schwab investor is there something you all might recommend in the 50/50 range ? Although not a Schwab fund, perhaps Wellington is a good choice (heck, maybe I should simply further and just go to Wellington?).

    Thank you.
    Take a look at either Schwab MarketTrack Balanced Portfolio (SWBGX) or Schwab Balanced Fund (SWOBX).There are also the Monthly Income Fund - Moderate Payout (SWJRX) and Monthly Income Fund - Enhanced Payout (SWKRX) funds for income. Each is around 50/50 asset allocation. https://www.schwab.com/mutual-funds/inv ... o-solution
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by J295 »

    Thank you happenstance
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by sycamore »

    J295 wrote: Mon Oct 18, 2021 10:42 am Apologies if this is covered up thread .....

    Sister is retiring and moving 401k to Schwab and having an all in one fund may be a lot more appealing to here than doing something like I do (50% US and International index funds, 30% BND and TIP, and 20% ibonds, CDs, st bonds, etc.)

    So, as a Schwab investor is there something you all might recommend in the 50/50 range ? Although not a Schwab fund, perhaps Wellington is a good choice (heck, maybe I should simply further and just go to Wellington?).

    Thank you.
    Another option -- if your sister doesn't mind ETFs -- is iShares' Allocation ETFs.
    iShares Core Moderate Allocation ETF AOM is 40/60.
    iShares Core Growth Allocation ETF AOR is 60/40.
    They have a lower ER (0.25%) versus ~0.50 with the SWBGX, SWOBX, SWJRX. SWKRX is ~.36%.

    The iShares funds use index funds as the underlying holdings. Might be worth checking what the Schwab funds use; some may use active management, if that matters to you or your sister.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    J295 wrote: Mon Oct 18, 2021 10:42 am Apologies if this is covered up thread .....

    Sister is retiring and moving 401k to Schwab and having an all in one fund may be a lot more appealing to here than doing something like I do (50% US and International index funds, 30% BND and TIP, and 20% ibonds, CDs, st bonds, etc.)

    So, as a Schwab investor is there something you all might recommend in the 50/50 range ? Although not a Schwab fund, perhaps Wellington is a good choice (heck, maybe I should simply further and just go to Wellington?).

    Thank you.
    There's Schwab target date index funds, which have ERs of 0.08%.

    If she wants a fixed allocation of index funds, she might use one or two of the Vg LifeStrategy funds. Or if indexing doesn't matter there's Wellington, as you mentioned, and/or Wellesley.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by Barefootgirl »

    Once the funds from your prior brokerage have transferred successfully to Schwab, how long did it take them to apply your transfer bonus? Assume it was deposited as a cash deposit to your new Schwab brokerage? (I ask because I also opened a new Schwab checking account).

    Also, how long until you received the Schwab debit card? Thanks
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    Barefootgirl wrote: Wed Oct 20, 2021 7:09 am Once the funds from your prior brokerage have transferred successfully to Schwab, how long did it take them to apply your transfer bonus? Assume it was deposited as a cash deposit to your new Schwab brokerage?
    Most recent was about 7 weeks, ours was a transfer of securities. A previous one was about the same, IIRC.

    It may be that they credit it at about 45 days :?: as that's the time they give you to complete all transfers and deposits for earning a bonus.
    BitTooAggressive
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by BitTooAggressive »

    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by nalor511 »

    BitTooAggressive wrote: Wed Oct 20, 2021 1:38 pm
    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
    "Lifetime" , but, I guess they could someday get out of it by saying it's the "lifetime of the waiver program" or something clever. But really why is it such a big deal? If it goes away, ETFs are mostly fine now, even though I avoided them for a long time. Every option has issues somewhere. I'd rather ETF at Schwab than MF at VG, because at least I can ask Schwab questions and get replies.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by hudson »

    galawdawg wrote: Thu Aug 05, 2021 10:13 am
    nisiprius wrote: Thu Aug 05, 2021 9:54 am Actually, the most interesting thing I've read about Schwab recently is something I stumbled on while trying to find out what the press was saying about Vanguard DIgital Advisor.

    It is apparently called "Schwab Intelligent Income"...
    Intelligent Income is available now at Schwab: https://www.schwab.com/automated-invest ... ent-income

    According to that website, there are no fees associated with this service, however, it does look like it will create a portfolio of ETFs and a cash holding. It appears that Schwab earns their money on the cash portion of the portfolio it creates for you, rather than charging AUM or other fees.

    You can see the composition, historical performance and cash portion of each Intelligent Portfolio here: https://content.schwab.com/intelligent- ... rformance/

    There are fifteen (15) available Intelligent Portfolios, which are:
    U.S. Focused
    Aggressive Growth, Growth, Moderate Growth, Moderate, Moderately Conservative, Conservative
    Global
    Aggressive Growth, Growth, Moderate Growth, Moderate, Moderately Conservative, Conservative
    Income Focused
    Moderate, Moderately Conservative, Conservative
    Thanks! They have a portfolio that might work for me. I selected "Income Focused" and "Conservative", and got:
    0% Stocks
    71% Fixed income
    29% Cash

    I'll drill down later and get more details.
    BitTooAggressive
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by BitTooAggressive »

    nalor511 wrote: Wed Oct 20, 2021 2:06 pm
    BitTooAggressive wrote: Wed Oct 20, 2021 1:38 pm
    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
    "Lifetime" , but, I guess they could someday get out of it by saying it's the "lifetime of the waiver program" or something clever. But really why is it such a big deal? If it goes away, ETFs are mostly fine now, even though I avoided them for a long time. Every option has issues somewhere. I'd rather ETF at Schwab than MF at VG, because at least I can ask Schwab questions and get replies.
    I prefer to keep my mutual funds. If it is not a big deal Schwab should be ok with it.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    nalor511 wrote: Wed Oct 20, 2021 2:06 pm
    BitTooAggressive wrote: Wed Oct 20, 2021 1:38 pm
    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
    "Lifetime" , but, I guess they could someday get out of it by saying it's the "lifetime of the waiver program" or something clever. But really why is it such a big deal? If it goes away, ETFs are mostly fine now, even though I avoided them for a long time. Every option has issues somewhere. I'd rather ETF at Schwab than MF at VG, because at least I can ask Schwab questions and get replies.
    As noted above, the email that I received from Schwab says:
    This waiver is made at Schwab's discretion, and Schwab reserves the right to revoke this waiver at any time without advance notice.
    BitTooAggressive
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by BitTooAggressive »

    jeffyscott wrote: Wed Oct 20, 2021 3:44 pm
    nalor511 wrote: Wed Oct 20, 2021 2:06 pm
    BitTooAggressive wrote: Wed Oct 20, 2021 1:38 pm
    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
    "Lifetime" , but, I guess they could someday get out of it by saying it's the "lifetime of the waiver program" or something clever. But really why is it such a big deal? If it goes away, ETFs are mostly fine now, even though I avoided them for a long time. Every option has issues somewhere. I'd rather ETF at Schwab than MF at VG, because at least I can ask Schwab questions and get replies.
    As noted above, the email that I received from Schwab says:
    This waiver is made at Schwab's discretion, and Schwab reserves the right to revoke this waiver at any time without advance notice.
    Thanks. I think that is a deal killer for me.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by nalor511 »

    BitTooAggressive wrote: Wed Oct 20, 2021 5:04 pm
    jeffyscott wrote: Wed Oct 20, 2021 3:44 pm
    nalor511 wrote: Wed Oct 20, 2021 2:06 pm
    BitTooAggressive wrote: Wed Oct 20, 2021 1:38 pm
    galawdawg wrote: Thu Aug 05, 2021 8:53 am As a satisfied Schwab customer, I have responded in a number of threads to questions about Schwab, both the brokerage and the bank. Sometimes those responses take a life of their own with follow-up questions and can detract from the original purpose of the thread.

    In the following post, which will be updated as new information is available or as frequent questions are fielded, I have endeavored to compile information that will be useful to others who may be considering starting their investing and/or banking adventure at Schwab or who are considering moving to Schwab from another brokerage or bank.

    Feel free to ask questions, express concerns, share comments and provide updated information in this thread. Hopefully it will allow other Bogleheads and lurkers alike to have many of their questions addressed in one place and avoid being an off-topic distraction in threads started by others that don't directly pertain to Schwab.
    Question to anyone. For the one fund family waiver did anyone get a commitment from Schwab how long the waiver lasted?
    "Lifetime" , but, I guess they could someday get out of it by saying it's the "lifetime of the waiver program" or something clever. But really why is it such a big deal? If it goes away, ETFs are mostly fine now, even though I avoided them for a long time. Every option has issues somewhere. I'd rather ETF at Schwab than MF at VG, because at least I can ask Schwab questions and get replies.
    As noted above, the email that I received from Schwab says:
    This waiver is made at Schwab's discretion, and Schwab reserves the right to revoke this waiver at any time without advance notice.
    Thanks. I think that is a deal killer for me.
    It's only a waiver on the purchase fee, selling and DRIP have no fee already. You can always leave later, or use Schwab or fidelity house MFs
    drzzzzz
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by drzzzzz »

    Get a bonus and buy ETFs (many of which are available on Vanguard mutual funds if you are wedded to them). One of the great benefits of ETF is the portability so you can go anywhere at anytime without worrying about additional expenses.
    barefootjan
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by barefootjan »

    [After you’ve transferred your IRA accounts to Schwab] if you convert Vanguard mutual funds from your tIRA to your Roth IRA, do you have to pay a fee?
    My apologies if this has already been answered and I missed it.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by nalor511 »

    barefootjan wrote: Thu Nov 04, 2021 11:16 pm [After you’ve transferred your IRA accounts to Schwab] if you convert Vanguard mutual funds from your tIRA to your Roth IRA, do you have to pay a fee?
    My apologies if this has already been answered and I missed it.
    No, it's not a purchase, it's a transfer, no fee
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by Barefootgirl »

    For those who use Schwab for banking, do you find it easy to get cash & deposit checks at most ATMs?
    How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
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    jeffyscott
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    Barefootgirl wrote: Fri Nov 05, 2021 2:51 pm For those who use Schwab for banking, do you find it easy to get cash & deposit checks at most ATMs?
    I photo deposit checks, never had a problem, no experience with ATM deposits.

    I have never had a problem getting cash from an ATM (we only have used in US and Europe).

    Both of those activities would be rare for us, though.
    J295
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by J295 »

    Can someone help me determine the fees/ER when using the Schwab basic Intelligent Investor service. My sister is considering using this for her recently rolled over IRA? I’d like to help her compare this to the fees/costs for a basic 3 fund portfolio. Thanks.
    sycamore
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by sycamore »

    J295 wrote: Fri Nov 05, 2021 8:25 pm Can someone help me determine the fees/ER when using the Schwab basic Intelligent Investor service. My sister is considering using this for her recently rolled over IRA? I’d like to help her compare this to the fees/costs for a basic 3 fund portfolio. Thanks.
    I don't see Schwab offering an "Intelligent Investor" service but I do see "Intelligent Portfolios". Is that what you mean?

    At the bottom of that page, there's a footnote, which I've broken out into separate lines below so it's easier to read.
    There is no advisory fee or commissions charged for Schwab Intelligent Portfolios.

    For Schwab Intelligent Portfolios Premium, there is an initial planning fee of $300 upon enrollment and a $30 per month advisory fee charged on a quarterly basis as detailed in the Schwab Intelligent Portfolios Solutions™ disclosure brochures.

    Investors in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium (collectively, "Schwab Intelligent Portfolios Solutions") do pay direct and indirect costs. These include ETF operating expenses which are the management and other fees the underlying ETFs charge all shareholders.

    The portfolios include a cash allocation to a deposit account at Schwab Bank. Our affiliated bank earns income on the deposits, and earns more the larger the cash allocation is. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios Solutions pay a higher yield.

    Deposits held at Schwab Bank are protected by FDIC insurance up to allowable limits per depositor, per account ownership category.

    Schwab Intelligent Portfolios Solutions invests in Schwab ETFs. A Schwab affiliate, Charles Schwab Investment Management, receives management fees on those ETFs. Schwab Intelligent Portfolios Solutions also invests in third party ETFs.

    Schwab receives compensation from some of those ETFs for providing shareholder services, and also from market centers where ETF trade orders are routed for execution.

    Fees and expenses will lower performance, and investors should consider all program requirements and costs before investing. Expenses and their impact on performance, conflicts of interest, and compensation that Schwab and its affiliates receive are detailed in the Schwab Intelligent Portfolios Solutions disclosure brochures.
    I bolded a couple of key parts. Basically, if Schwab Intelligent Portfolios recommended a "3 fund plus cash allocation kept at a bank" where the 3 funds matched the typical Boglehead Three-fund portfolio, you'd be paying for the recommendation by way of
    (1) a cash allocation that will act as a drag on returns (assuming that stocks & bonds will outperform cash) and
    (2) the cash allocation yield typically isn't as competitive as the best money market funds such as at Vanguard. Caveat: even MMFs are paying next-to-nothing just like savings accounts, so this isn't much of a cost right now. But if interest rates go up to something significant, the cost would rise. It still may not be much, as we might just be talking about the difference between 1% yield and 0.5% yield on the cash allocation.

    I would look into how much Schwab typically recommends for the cash allocation. Maybe it's just a few percentage points?
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by Stubbie »

    sycamore wrote: Sun Nov 07, 2021 9:58 pm
    J295 wrote: Fri Nov 05, 2021 8:25 pm Can someone help me determine the fees/ER when using the Schwab basic Intelligent Investor service. My sister is considering using this for her recently rolled over IRA? I’d like to help her compare this to the fees/costs for a basic 3 fund portfolio. Thanks.
    I don't see Schwab offering an "Intelligent Investor" service but I do see "Intelligent Portfolios". Is that what you mean?

    At the bottom of that page, there's a footnote, which I've broken out into separate lines below so it's easier to read.
    There is no advisory fee or commissions charged for Schwab Intelligent Portfolios.

    For Schwab Intelligent Portfolios Premium, there is an initial planning fee of $300 upon enrollment and a $30 per month advisory fee charged on a quarterly basis as detailed in the Schwab Intelligent Portfolios Solutions™ disclosure brochures.

    Investors in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium (collectively, "Schwab Intelligent Portfolios Solutions") do pay direct and indirect costs. These include ETF operating expenses which are the management and other fees the underlying ETFs charge all shareholders.

    The portfolios include a cash allocation to a deposit account at Schwab Bank. Our affiliated bank earns income on the deposits, and earns more the larger the cash allocation is. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios Solutions pay a higher yield.

    Deposits held at Schwab Bank are protected by FDIC insurance up to allowable limits per depositor, per account ownership category.

    Schwab Intelligent Portfolios Solutions invests in Schwab ETFs. A Schwab affiliate, Charles Schwab Investment Management, receives management fees on those ETFs. Schwab Intelligent Portfolios Solutions also invests in third party ETFs.

    Schwab receives compensation from some of those ETFs for providing shareholder services, and also from market centers where ETF trade orders are routed for execution.

    Fees and expenses will lower performance, and investors should consider all program requirements and costs before investing. Expenses and their impact on performance, conflicts of interest, and compensation that Schwab and its affiliates receive are detailed in the Schwab Intelligent Portfolios Solutions disclosure brochures.
    I bolded a couple of key parts. Basically, if Schwab Intelligent Portfolios recommended a "3 fund plus cash allocation kept at a bank" where the 3 funds matched the typical Boglehead Three-fund portfolio, you'd be paying for the recommendation by way of
    (1) a cash allocation that will act as a drag on returns (assuming that stocks & bonds will outperform cash) and
    (2) the cash allocation yield typically isn't as competitive as the best money market funds such as at Vanguard. Caveat: even MMFs are paying next-to-nothing just like savings accounts, so this isn't much of a cost right now. But if interest rates go up to something significant, the cost would rise. It still may not be much, as we might just be talking about the difference between 1% yield and 0.5% yield on the cash allocation.

    I would look into how much Schwab typically recommends for the cash allocation. Maybe it's just a few percentage points?
    Allan Roth had an interesting article a few months ago about the amount of money Schwab is making on their customers' cash holdings each year. It is staggering! That is how they fund this "free" service.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    sycamore wrote: Sun Nov 07, 2021 9:58 pm
    J295 wrote: Fri Nov 05, 2021 8:25 pm Can someone help me determine the fees/ER when using the Schwab basic Intelligent Investor service. My sister is considering using this for her recently rolled over IRA? I’d like to help her compare this to the fees/costs for a basic 3 fund portfolio. Thanks.
    I don't see Schwab offering an "Intelligent Investor" service but I do see "Intelligent Portfolios". Is that what you mean?

    At the bottom of that page, there's a footnote, which I've broken out into separate lines below so it's easier to read.
    There is no advisory fee or commissions charged for Schwab Intelligent Portfolios.

    For Schwab Intelligent Portfolios Premium, there is an initial planning fee of $300 upon enrollment and a $30 per month advisory fee charged on a quarterly basis as detailed in the Schwab Intelligent Portfolios Solutions™ disclosure brochures.

    Investors in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium (collectively, "Schwab Intelligent Portfolios Solutions") do pay direct and indirect costs. These include ETF operating expenses which are the management and other fees the underlying ETFs charge all shareholders.

    The portfolios include a cash allocation to a deposit account at Schwab Bank. Our affiliated bank earns income on the deposits, and earns more the larger the cash allocation is. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios Solutions pay a higher yield.

    Deposits held at Schwab Bank are protected by FDIC insurance up to allowable limits per depositor, per account ownership category.

    Schwab Intelligent Portfolios Solutions invests in Schwab ETFs. A Schwab affiliate, Charles Schwab Investment Management, receives management fees on those ETFs. Schwab Intelligent Portfolios Solutions also invests in third party ETFs.

    Schwab receives compensation from some of those ETFs for providing shareholder services, and also from market centers where ETF trade orders are routed for execution.

    Fees and expenses will lower performance, and investors should consider all program requirements and costs before investing. Expenses and their impact on performance, conflicts of interest, and compensation that Schwab and its affiliates receive are detailed in the Schwab Intelligent Portfolios Solutions disclosure brochures.
    I bolded a couple of key parts. Basically, if Schwab Intelligent Portfolios recommended a "3 fund plus cash allocation kept at a bank" where the 3 funds matched the typical Boglehead Three-fund portfolio, you'd be paying for the recommendation by way of
    (1) a cash allocation that will act as a drag on returns (assuming that stocks & bonds will outperform cash) and
    (2) the cash allocation yield typically isn't as competitive as the best money market funds such as at Vanguard. Caveat: even MMFs are paying next-to-nothing just like savings accounts, so this isn't much of a cost right now. But if interest rates go up to something significant, the cost would rise. It still may not be much, as we might just be talking about the difference between 1% yield and 0.5% yield on the cash allocation.

    I would look into how much Schwab typically recommends for the cash allocation. Maybe it's just a few percentage points?
    See this post: viewtopic.php?p=6157807#p6157807
    which has a link to https://content.schwab.com/intelligent- ... rformance/
    where you can see all the portfolios.

    They range from 6% cash, 94% stock to 29% cash, 71% bond.
    In the moderate range for global, there's one that's about 50/50 and one with 64% stocks, those are at 9% and 12% cash. The next step down is 36% stocks with 14% cash.

    If you would have that much cash anyway, then the current cost is at most about a loss of 0.5% on the cash, when compared to the best high yield savings accounts. If you would keep your cash in a money market, then the cost is 0, since those are paying next to nothing, just like Schwab's bank cash would.

    With 9-12% cash and losing 0.5% interest, I calculate the effective cost at 0.045% to 0.06%. That effective cost may increase if the difference between Schwab's bank account and alternative cash increases. By my calculation, the interest rate differential would have to be about 1.7% in order for these moderate portfolios to cost as much as the 0.2 that Vanguard charges for their robo-advisor. Even at the 14% cash level, the interest rate differential would have to be about 1.4%, in order for the effective cost to reach about 0.2%.

    The unfortunate thing with Schwab's structure is that the more conservative your portfolio is, the greater the effective cost of managing it. It would be better/fairer if they just had a fixed allocation to cash of, say. 10% for all the portfolios.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by Nate79 »

    "Cash drag" in Schwab's SIP has been discussed extensively in the past and is a complicated discussion because you can not look at the cash in a vacuum. Schwab uses cash (0 duration fixed income) as an risk reduction offset for higher risk/higher return bonds. So you need to look at the total yield of their fixed income portion of the portfolio and not just one individual component (cash). When I look at this a few years ago based on model portfolios the total yield at the time was similar to a total bond market fund.

    And yes, Schwab is a bank. Its amazing when people learn how a bank makes their money. :oops:
    J295
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by J295 »

    Thank you all very much for helping out with my question about the Schwab intelligent portfolio. 👍👍
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    Nate79 wrote: Mon Nov 08, 2021 7:18 am "Cash drag" in Schwab's SIP has been discussed extensively in the past and is a complicated discussion because you can not look at the cash in a vacuum. Schwab uses cash (0 duration fixed income) as an risk reduction offset for higher risk/higher return bonds. So you need to look at the total yield of their fixed income portion of the portfolio and not just one individual component (cash). When I look at this a few years ago based on model portfolios the total yield at the time was similar to a total bond market fund.

    And yes, Schwab is a bank. Its amazing when people learn how a bank makes their money. :oops:
    But the 0 duration fixed income choice they are using pays less than a high yield savings account might (also 0 duration fixed income). And, if you don't like that comparison, in more normal times the Schwab bank deposits might pay 1% or so less than a money market or T-bills would (I think that is about what the differential was a few years ago :?: ). So you can look at differential yields on 0 duration (or near 0, in the case of T-bills) alternatives in a vacuum.

    Yes, this is how Schwab pays for the robo-advisor service and I see nothing wrong with doing it this way, except for their implementation of it, where the more conservative the investor is the greater the effective cost is. A fixed income oriented investor should not have 29% in a bank account paying (in past times) 0.5%, if they could be getting 1.5% in T-bills. If, for such an investor, they were to put 10% in the FDIC account and 20% in, for example, a T-bill ETF, that would be far better/fairer.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by qwerty123 »

    Does anyone have a recommendation on how to choose a Schwab consultant? I found a list to reach out to on Schwab's website, but I have 0 idea how to actually choose one. Did everyone else just randomly choose, or is there a more logical way to go about it?
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by tj »

    qwerty123 wrote: Sat Nov 13, 2021 10:07 am Does anyone have a recommendation on how to choose a Schwab consultant? I found a list to reach out to on Schwab's website, but I have 0 idea how to actually choose one. Did everyone else just randomly choose, or is there a more logical way to go about it?
    If you choose one that's a little further away, perhaps they won't insist on in-person meetings.
    greenman1
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by greenman1 »

    qwerty123 wrote: Sat Nov 13, 2021 10:07 am Does anyone have a recommendation on how to choose a Schwab consultant? I found a list to reach out to on Schwab's website, but I have 0 idea how to actually choose one. Did everyone else just randomly choose, or is there a more logical way to go about it?
    I have a similar question in that HOW does one change a Schwab consultant? I have one automatically assigned based on my location but have never talked to them. I would like to change to another one a little further away, but so far unable to do so even after calling Schwab twice. They told me it will be changed but when I log in it still shows the old one.
    qwerty123
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by qwerty123 »

    tj wrote: Sat Nov 13, 2021 10:20 am
    qwerty123 wrote: Sat Nov 13, 2021 10:07 am Does anyone have a recommendation on how to choose a Schwab consultant? I found a list to reach out to on Schwab's website, but I have 0 idea how to actually choose one. Did everyone else just randomly choose, or is there a more logical way to go about it?
    If you choose one that's a little further away, perhaps they won't insist on in-person meetings.
    I feel like this is a case where I can blame covid: "sorry, I'm not comfortable with meeting in person due to covid". Let's chat over email.
    greenman1 wrote: Sat Nov 13, 2021 10:26 am
    qwerty123 wrote: Sat Nov 13, 2021 10:07 am Does anyone have a recommendation on how to choose a Schwab consultant? I found a list to reach out to on Schwab's website, but I have 0 idea how to actually choose one. Did everyone else just randomly choose, or is there a more logical way to go about it?
    I have a similar question in that HOW does one change a Schwab consultant? I have one automatically assigned based on my location but have never talked to them. I would like to change to another one a little further away, but so far unable to do so even after calling Schwab twice. They told me it will be changed but when I log in it still shows the old one.
    Why do you want to change consultants?
    increment
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by increment »

    greenman1 wrote: Sat Nov 13, 2021 10:26 am I have a similar question in that HOW does one change a Schwab consultant? I have one automatically assigned based on my location but have never talked to them. I would like to change to another one a little further away, but so far unable to do so even after calling Schwab twice. They told me it will be changed but when I log in it still shows the old one.
    Have you consulted the replacement consultant/office? They should be able to advise how to make it happen.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by tj »

    galawdawg wrote: Thu Aug 05, 2021 8:53 am
    I recall galawdawg had detailed the method to find a consultant that actually works for Schwab rather than a franchise. I haven't a clue if it was in this thread or another one, though. I could not easily find it.
    increment
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by increment »

    On the list of Schwab locations a bunch are called "Independent Branches." Are the rest staffed by Schwab employees?
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by tj »

    increment wrote: Sat Nov 13, 2021 10:47 am On the list of Schwab locations a bunch are called "Independent Branches." Are the rest staffed by Schwab employees?
    I think that's a fair assessment.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by jeffyscott »

    The independent branches are franchises. I don't think it really makes a difference. Our consultant is one of those, he's been helpful when I've contacted him, rarely initiates contact, and we've gotten bonuses matched and waivers of mutual fund transaction fees.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by billlumber1981 »

    On Vanguard, if I click Buy VTSAX, it places an order and automatically pulls from my ally bank account - basically a one step process. Basically, you don’t have to transfer money from your bank to vanguards settlement fund before you can buy vtsax, as it does this automatically when you click on buy vtsax.

    Is it the same for Schwab? Or do I have to put the money in the settlement fund, then buy swtsx - effectively making it a two step process?
    UpperNwGuy
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by UpperNwGuy »

    billlumber1981 wrote: Fri Nov 19, 2021 8:41 pm On Vanguard, if I click Buy VTSAX, it places an order and automatically pulls from my ally bank account - basically a one step process. Basically, you don’t have to transfer money from your bank to vanguards settlement fund before you can buy vtsax, as it does this automatically when you click on buy vtsax.

    Is it the same for Schwab? Or do I have to put the money in the settlement fund, then buy swtsx - effectively making it a two step process?
    Didn't you ask this exact question a few days ago in another thread?
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