Loyal3 is closing on May 22, 2017

Here is the email notification I received that Loyal3 brokerage is shutting down, effective May 22 2017. Loyal3 was a commission free brokerage where you could buy fractional shares. Effective May 22, 2017, LOYAL3 will transfer its customer accounts to FolioFirst.

FolioFirst is a new platform developed for LOYAL3 customers and will be available at www.foliofirst.com starting May 22, 2017.

Here is the notification

LOYAL3

Dear XXXXXXX,

Thank you for being a LOYAL3 customer. We have important news: we’ve entered into a transaction that will provide LOYAL3 customers with a new, larger platform and more services.

Effective May 22, 2017, LOYAL3 will transfer your brokerage account to FolioFirst, a new online brokerage platform being built for LOYAL3 customers.

The transfer to this new platform will happen automatically – there is nothing you need to do to have your account transferred – and there is no charge for the transfer. Your account, including securities and cash, will be available at FolioFirst starting on May 22, 2017. Following the transfer of all accounts, the LOYAL3 platform will close. Review the Important Deadlines section below for key dates before this transition.

We hope you’ll want to continue investing – and grow your account at FolioFirst. You’ll be offered significant enhanced services at FolioFirst compared to your LOYAL3 brokerage account including: commission-free trading in over 200 stocks, multiple account types (individual, IRA, and joint), performance reporting, and much more. However, commencing August 1, 2017, there will also be a fee for services – but it will be just $5 per month.

If you do not want your account transferred to FolioFirst, you have 2 choices:

Transfer your account to another brokerage firm. You will need to instruct your new broker to send us a Transfer Instruction Form (TIF). Per industry standard, fractional shares cannot be transferred. By submitting a request to transfer your account to a brokerage firm other than FolioFirst, you are also authorizing us to sell any fractional shares remaining in your account that cannot be transferred to your specified brokerage firm, return the proceeds to you and close your account. By submitting this request, you also authorize LOYAL3 to liquidate any cash equivalents that are part of LOYAL3’s money market sweep program for purposes of returning your funds to you.

Please instruct your new broker to send us this form by May 15, 2017.
For more information about transferring your account, please see the information described below under the caption Information on Transferring Your Account.

Or, sell all your shares held at LOYAL3 and transfer the cash to your bank account. You can do this on the LOYAL3 website using your current login username and password. You will need to enter your sell order by 1:45 PM ETon May 16, 2017. By submitting a request to sell all of your shares, you are authorizing LOYAL3 to return the proceeds (including any other cash or proceeds from cash equivalents held in your account) to you if you have not done so by May 19, 2017. By submitting this request, you also authorize LOYAL3 to liquidate any cash equivalents that are part of LOYAL3’s money market sweep program for purposes of returning your funds to you. For more information about transferring your account, please see the information described below under the caption Sell Your Shares, Withdraw the Proceeds and Close Your Account. 

Introducing FolioFirst

FolioFirst is a brand new web site currently being built just for LOYAL3 customers. FolioFirst is part of an online stock brokerage and financial technology firm that has been serving investors for over 17 years. From its beginning, Folio has been dedicated to helping individual investors achieve their long-term financial goals.

With FolioFirst, you’ll have access to many additional features including:

  • Commission-free trading (up to 2,000 trades per month in twice-daily windows) in over 200 publicly traded stocks and ETFs, and with the ability to
    • buy and sell in any dollar amount1, and
    • trade with fractional shares
  • IRA and Joint Accounts, in addition to Individual Accounts (available by August 1, 2017, and included in the one monthly fee)
  • An FDIC-insured cash sweep
  • An easy-to-use website with tools and displays to help make you a smarter investor
  • Performance reporting
  • The ability to upgrade to other brokerage offerings
  • No account minimums
  • And, more…

1 A minimum purchase amount of $25 per security applies; if you are purchasing ten or more securities at once, the minimum purchase amount is just $5 per security.

Your New Pricing Plan

The FolioFirst pricing is simple and straightforward – you receive all of these great brokerage features, including commission-free security trading (up to 2,000 per month in twice-daily trading windows), for one flat fee of just $5 per month. And that one fee covers trading and all these features in as many accounts as you need – individual, joint and retirement (there is a separate $25 annual IRA reporting fee).

To give you a chance to experience all that FolioFirst has to offer, the monthly fee will be waived until August 1, 2017. Other fees may apply – see Special Services and Fees below.

Next Steps

Information about how to login to FolioFirst, set up cash transfers, and more will be sent to you by email before May 22, 2017.

Your existing bank link will be set up at FolioFirst. However, any automatic purchases of stock will need to be set up on the FolioFirst site after May 22, 2017.

Please check to confirm that the contact information (both email and physical address) in your LOYAL3 account profile is correct so we can continue to communicate important information to you during this transition.  

We appreciate the opportunity we’ve had to serve you, and we are confident that you will be well served by FolioFirst.

If you have questions about this transfer, or your account at LOYAL3, please feel free to call LOYAL3 Customer Service, MondayFriday 9-5 PST at 855-256-9253.

Sincerely,
LOYAL3 Securities

Important Deadlines

All shares (including fractional shares) and cash remaining in accounts eligible for transfer as of the close of business on Friday, May 19, 2017 will be transferred to FolioFirst. Your shares and cash will be in your FolioFirst account on Monday, May 22, 2017. 

May 15, 2017 Last day to make new purchases on LOYAL3 (including AIPs)
May 15, 2017 Recommended date for LOYAL3 to receive transfer instructions from your new broker (other than FolioFirst)
May 16, 2017(12:00 noon EST) Last day to withdraw funds from your LOYAL3 account
May 16, 2017

(1:45 PM ET)

Last day to sell securities in your LOYAL3 account (proceeds of sales on May 16, 2017 will be sent to your bank account or by check)
May 18, 2017(5:00 PM ET) Last possible date for LOYAL3 to receive transfer instructions from your new broker (other than FolioFirst)

 

Frequently Asked Questions

Q: Who will send me my tax forms?

A: Your 2016 tax documents have been sent to you by LOYAL3. Tax and other documents will be available at www.LOYAL3.com until June 18, 2017.

2017 Tax Documents

  • If your account is transferred to FolioFirst, both your tax documents for i) the partial year your account was at LOYAL3 and ii) the partial year your account was at FolioFirst, will be available at FolioFirst.
  • If your account is transferred to another broker, you will receive tax documents from LOYAL3 for the portion of 2017 that you were at LOYAL3, and tax documents for the balance of 2017 from the new firm that holds your account.
  • If you liquidate your account by selling all your shares and moving the proceeds to your bank before May 19, 2017, you will only receive 2017 tax documents from LOYAL3.

Q: Can I keep my account at LOYAL3 open?

A: No. Your account will be transferred to FolioFirst unless you transfer it to another broker or liquidate it by selling all of the shares in your account and moving the proceeds to your bank account using the LOYAL3 website before May 19, 2017. The LOYAL3 platform will close after all accounts have been transferred or closed.

There is no charge for this transfer to FolioFirst, though you will be liable for any FolioFirst charges you incur after the transfer. If you wish to liquidate and close your account instead of transferring it, you may incur a taxable event when selling your securities. You must submit your final sell order by 1:45 PM ET on Tuesday, May 16, 2017.

Q: What are the terms and conditions I am agreeing to if I participate in the transfer to FolioFirst?

A: In addition to the terms and information provided in this notice, the FolioFirst brokerage account agreement will be available on the FolioFIrst website in advance of the May 22 conversion date. Immediately following the transfer of your account, you will be asked to accept this agreement as part of the setup on FolioFirst.

Q: Does the $5 per month FolioFirst fee really allow me to trade commission-free (up to 2,000 trades) each month across multiple accounts – such as an individual account, a joint account and an IRA account with no per account fee (other than the annual reporting fee for IRA accounts)?

A: Yes!

Q: When will the FolioFirst website be open for use?

A: The FolioFirst website is being built just for LOYAL3 customers and will be available for use on the May 22 conversion date.

Q: What is the exact timing of the transfer to FolioFirst?

A: All cash and securities will be transferred to FolioFirst on May 22, 2017. LOYAL3 will continue to accept sell orders for your account until 1:45 PM ET on Tuesday, May 16, 2017. You will be able to begin trading in your new online brokerage account on May 22, 2017 at FolioFirst (and only there) after you log in to their website and complete the new account setup at FolioFirst.

Q: Will my personal information be protected?

A: LOYAL3 will provide FolioFirst with your account information so that your account can be established there. In anticipation of this transfer, you are consenting to our sharing your personal information with FolioFirst. If you close your account or transfer it to another firm as described above, FolioFirst will securely delete your personal information. We will provide FolioFirst with the personal financial information necessary to service your account and the positions that are being transferred. With respect to your information, both LOYAL3 and FolioFirst will comply with the SEC’s Regulation S-P on the Privacy of Consumer Information. Any transfer of your data will be made in compliance with Regulation S-P.

FolioFirst Account Features and Customer Pricing

Price Comparison LOYAL3 Fee Your New Pricing
Monthly Fee None $5 per month, waived until August 1, 2017. A single $5 monthly fee covers all the accounts owned by a customer.
Per-Trade Fee $0 commission, batch trades only $0 commission (for up to 2,000 Window Trades per month across as many accounts as the customer has for the $5 monthly fee – then $.50 per trade for additional transactions), window trades only

FolioFirst Special Services and Fees (other fees may also apply from time to time and all fees are subject to change):

Service LOYAL3 Fee Your New Pricing
Account Transfer In Not available No Charge
Full Account Transfer Out

Fee applied when you transfer all of your holdings to another brokerage firm – this charge is applied per account transferred.

$25 (waived at this time) $100
Partial Account Transfer Out

Fee applied for each security when you transfer some securities, but not your entire account, to another brokerage firm.

Not available $5 per security
($25 min, $75 max)
Setup ACH Link No Charge No Charge
Stop Payment on or Returned Electronic Funds Transfer (EFT)

Fee applied when you request a stop payment on or an EFT request fails due to insufficient funds or incorrect information provided by you.

No charge $35
Paper Copies of a Current or Prior Account Statement or Confirmation (per statement or confirmation) Not available $12.50
Broker-Assisted Services

Fee applied when you request broker-assistance to buy and sell securities by phone, transfer securities, cash, and tax lots between accounts.

Not available $45 per request
Voluntary Corporate Action

Fee applied per action when you participate in a voluntary tender offer – there is no charge for mandatory actions, such as mergers or acquisitions.

No Charge $30
Special Services

Hourly charge applied when you request services not included on this fee schedule, such as research requests, manual credit card transactions, and validation for IRA distributions when beneficiaries are not designated or there are no living designated beneficiaries.

Not available $250/hour
($25 min)
Trading Service Fees

Fees to offset regulatory and transaction costs imposed on brokers relating to sell transactions in certain securities.

No Charge Adjusted periodically
Account Statement Alert Failure/Bad Email Address Fee

Applied when email alert regarding your monthly statement cannot be delivered. You can avoid this fee by simply updating your email address before the end of the month upon receiving a physical letter regarding delivery failure of email alert.

No Charge $5
IRA Custodial Fee

Fee applied to each IRA custodial account you hold.  This fee is applied when you close your IRA if it has not yet been charged for the year.

Account Type Not Available $25 per year
Residual Balance Fee

Quarterly fee applied to closed accounts under closed memberships that still have a balance – this fee or the lesser of the remaining account balance will be charged quarterly to pay for custody services.

No Charge $15

Cash Management

FolioFirst provides an FDIC insured bank sweep program for uninvested cash, instead of money market funds or other methods of holding your cash.  Your current sweep money market fund positions at LOYAL3 do not earn interest. They will be transferred to FolioFirst (where they will continue not to earn interest) along with your other securities. You will be able to sell those positions at FolioFirst, if you wish. Any new cash you deposit at FolioFirst or generated due to sales will then be held in FolioFirst’s multi-bank FDIC-insured sweep program pursuant to the terms of the FolioFirst Customer Agreement, and begin to earn interest pursuant to the terms of that program.

Cash Sweep Comparison between LOYAL3 and FolioFirst

Provider / Features LOYAL3 (also applies to holding the same fund at FolioFirst until you sell it)** FolioFirst (for funds moved to its cash sweep program)
Investment Type Vanguard Money Market Fund (VMMXX) FDIC Insured Cash Sweep
Prospectus Date 12/23/16 N/A
Management Fee 0.13% N/A
Net Expense Ratio 0.16% N/A
Interest Yield 0% Currently 1 basis point but varies with changes in interest rates
Insurance Up to $500,000 per account of SIPC insurance Up to $4.5 million per customer of FDIC insurance*

* FolioFirst accounts automatically participate in its FDIC insured bank deposit program. The FDIC insurance coverage amount, rates and other factors are as of the date of this letter and are subject to change. The FolioFirst website will provide up-to-date Cash Sweep Program details after the transfer is complete.

** In connection with the closure of the LOYAL3 platform, LOYAL3 may elect to terminate its cash sweep program, in which case your cash will be held as free credit balances earning no interest.

Sell Your Shares, Withdraw the Proceeds and Close Your Account

If you elect to sell your shares, withdraw the proceeds and close your account, you will need to sell your securities and transfer the proceeds to your bank. There is no need to call us.

This is a two-step process.

Step one: Sell your shares:

Please ensure that your bank account details provided in your LOYAL3 account are correct before you sell your shares.

To sell your shares:

  • Log into your LOYAL3 Account
  • Click “Sell All Shares”
  • Click “Review Order,” then “Sell Shares” to complete

It will take at least 3-4 business days after entering your sell order for the transaction to settle.

After the transaction has settled, then, transfer cash to your bank account.

Step two: Transfer cash to your bank account:

You can only initiate this transfer 3-4 business days after you enter your sell order.

To transfer cash to your bank account:

  • Log into your LOYAL3 account
  • Confirm that your bank account number in your profile is correct
  • Find the blue bar “Total Account Value” near the top of the page
  • Under this bar you will see “Available Funds” and a link that says “Transfer Funds”
  • Click on the “Transfer Funds” link
  • Enter your transfer order or click “All Available.”  Make sure it reflects that you are transferring from LOYAL3 to your bank account.
  • Click “Available for Withdrawal” balance
  • Click “Review” then click “Transfer”
  • Your funds should be available in your bank account in 2-3 business days, depending on your bank.

You must complete both steps by May 16, 2017. You will be responsible for any tax consequences resulting from the sale of your shares.

In connection with the closure of your account, LOYAL3 may elect to transfer the cash held in your account to the bank account you have previously linked to your LOYAL3 account, or send you a check to your address of record.

Please ensure that your bank account details provided in your LOYAL3 account are correct and up to date.

After cash amounts have been returned to you, LOYAL3 will close your account. You will be able to log in to access records like monthly statements or tax forms for a transitional period ending on June 18, 2017.

Information on Transferring Your Account

If you elect to transfer your account to another brokerage firm, there is no need to call us. This is a two-step process.

Step one: Instruct your new broker to send us transfer instructions.

First, you need to instruct your new broker to send us a completed Transfer Initiation Form (TIF). Please send this for delivery to LOYAL3 by May 15, 2017.

You will need to provide your new broker with:

  • Your recent LOYAL3 account statement
  • LOYAL3’s DTC number (0472)

Your new broker should send the completed TIF to transfers@loyal3.com or fax 415-200-0245 by May 15, 2017. Your TIF should provide instruction to us to sell any fractional shares in your account. We will not process any TIFs received after May 18, 2017.

When your transfer request is received, LOYAL3 will temporarily restrict your account to stop any new transactions that may delay or prevent a timely transfer.

Please note, the transfer may only be made to an account with the same name and SSN as your LOYAL3 account.

We will not charge you any fees to close or transfer your account; however, you should review any fees the new firm may charge to receive your account.

If you instruct us to transfer your positions to another broker, we will provide that broker with personal financial information in order to permit your new broker to service your account. Any transfer of your data will be made in compliance with the SEC’s Regulation S-P on the Privacy of Consumer Information.

Transfers normally take 7-10 business days to process.

Step Two: LOYAL3 will sell your fractional shares and return the proceeds to you.

The proceeds of the sale of fractional interests, and any other cash amounts remaining in your account, will be transferred to you by ACH transfer to the bank account you previously linked to your LOYAL3 account or by sending a check to your address of record, at our election.

Please ensure that your bank account details provided in your LOYAL3 account are correct and up to date.

After cash amounts have been returned to you, LOYAL3 will close your account. You will be able to log in to access records like monthly statements or tax forms for a transitional period ending on June 18, 2017.

 

 

for more information visit loyal3.com