A Strategy for LOYAL3 Assets Before They Shut Down

How did we transfer our LOYAL3 assets to a different broker?

We may earn money or products from the companies mentioned in this post.

As many of you know by now, LOYAL3 is shutting down effective May 22, 2017. This means that account holders need to decide what to do with the assets in their accounts well before that time.

One option is to take no action and let the shares of stock and available cash transfer into a new FolioFirst account. Based on monthly fees ($5 maintenance fee starting in August 2017), my wife and I have decided against that option for our assets.

We could also decide to sell all our shares in our LOYAL3 account and transfer out the cash. Since we are building our portfolio … we are not interested in selling our shares.

The last option is to transfer all of our whole shares of stock to another broker – in our case Fidelity. This is the option that we are choosing and actually just turned in the paperwork this morning for the transfer.

Note – partial shares cannot be transferred … which is why we needed to analyze our LOYAL3 holdings and make a plan..

Transferring Assets to Another Broker

This is actually the first time we have ever transferred stock from one broker to another. I have been wanting to transfer some shares held in our ComputerShare account to avoid fees … but haven’t done so yet. Maybe this will push me towards taking that leap.

Anyways … we put the transfer in this morning and only needed 2 documents to complete the process. First we needed a recent statement from LOYAL3 showing that I was the account holder, etc.

Next we needed to download and fill out a Transfer Assets to Fidelity form which was quick and easy to fill out. We were able to scan the filled out form and upload it back to complete the process.

The whole process took about 10 minutes to complete. Not as much work as I had originally thought.

What took more time was deciding on how to sell off partial shares of some stocks at LOYAL3 while buying more shares of other companies to get to the next whole share.

Selling Off Partial Shares

Selling off partial shares of stock at LOYAL3 was actually very simple.

Overall, we sold the following partial shares of stock at LOYAL3 –

  • Kraft Heinz (KHC) – *1.4326
  • Intel (INTC) – .5843
  • Coca-Cola (KO) – .2805
  • Microsoft (MSFT) – .0903
  • Kellogg (K) – *6.1517
  • McDonald’s (MCD) – .3349
  • VFC Corp. (VFC) – *1.3904
  • Dr Pepper Snapple (DPS) – *1.9743
  • Unilever (UL) – .5778
  • WalMart (WMT) – .6826

Note – shares marked with an * represent selling our entire holding (KHC, K, VFC, and DPS).

Why did we decide to sell off these partial shares instead of letting LOYAL3 do it? Because we wanted to use the funds to buy more shares in other stocks to get more whole shares in those companies.

So we ended up using the funds to make the following purchases –

  • Apple (AAPL) – 4.6672 shares
  • Best Buy (BBY) – 6.9541 shares

That still didn’t leave us where we needed to be … so we had to pitch in another $60.00 to buy a few more partial shares of 3 stocks –

  • Best Buy (BBY) – $40 to buy .7802 shares
  • Target (TGT) – $10 to buy .1821 shares
  • Apple (AAPL) – $10 to buy .0692 shares

But … that still didn’t leave us with all whole shares. So in our final step we had to sell the following shares. The end result was a cash balance of $12.60.

So we sold the following –

  • Apple (AAPL) – .0648
  • Best Buy (BBY) – .0418
  • Target (TGT) – .0193

Does it seems like a bunch of work that may not have been necessary? Possibly … but based on our goals we wanted to increase our shares in a few accounts before the transfer.

LOYAL3 Whole Shares to Transfer

One of the downsides of LOYAL3 was that they required account holders to invest in whole dollar amounts over $10. So instead of just buying 7.6794 shares of Best Buy to get to a whole number, we needed to invest $350 (6.9541 shares), then invest another $40 (.7802) shares, and then sell .0418 shares to get to 10 whole shares.

Here is the final total of shares that will be moved from our LOYAL3 account to Fidelity –

  • Apple (AAPL) – 13
  • Best Buy (BBY) – 10
  • Coca-Cola (KO) – 15
  • Intel (INTC) – 34
  • McDonald’s (MCD) – 1
  • Microsoft (MSFT) – 82
  • Target (TGT) – 31
  • Unilever (UL) – 19
  • WalMart (WMT) – 53

It was a tough decision, but we decided to cash out entirely of a few stocks including VFC Corp (VFC), Kraft Heinz (KHC), Dr Pepper Snapple (DPS), and Kellogg (K).

We owned so few shares in these companies and didn’t think we would be actively buying shares in them … especially if we pay commission.

From the list of shares that are transferring – Target (TGT), Intel (INTC), and McDonald’s (MCD) will be combined with existing shares in our Fidelity account.

One last thing … we will be setting up direct reinvestment plans (DRiP) on all of these companies in our Fidelity account once the transfer is complete. We look forward to slowly building these positions again through dividend reinvestment.

How are you handling your LOYAL3 assets? Are you considering using FolioFirst or planning to transfer to a new broker?

Full Disclosure – At the time of this writing, we owned shares in the following stocks noted in this post – AAPL, BBY, KO, INTC, MCD, MSFT, TGT, UL, and WMT. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.

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Click Here to Leave a Comment Below 5 comments
Michael F. Monica - May 23, 2017

I sold all my shares of AAPL following Loyals time line not wanting to go through the hassel that I knew was ahead. This act may have cost me my funds which as of today are still being held by Loyal3 until 5/30/17 according to a FolioFirst representative in a phone call today 5/23/17 at 2:00pm EST. This confirms Loyals website. They should not hold my money any longer than their original promise to transfer as of the 22nd of May. I should also be paid for the use of my money if I get it back. IS THIS A SCAM !!!

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    John - May 23, 2017

    I don’t think it is a scam. All of my shares are still being held at LOYAL3 and have not been transferred yet to my Fidelity brokerage account. The process seems very long and should have been done by now, but I will remain patient.

    On the other hand, my wife’s account (which we didn’t move to another broker) has completely been move to FolioFirst.

    Let me know how it works out?

    Reply
Heather - May 27, 2017

I filled out a transfer form from Fidelity about a month ago and fidelity said they never heard anything back from Loyal3. I called Loyal3 which was a recording with no humans or voicemails. FolioFirst had been equally useless. Basically Loyal3 money is being held hostage with no way to currently access the account,initiate a transfer or to get customer service. Fidelity acknowledged this as an issue and advised to file a dispute/claim with the agency FINRA.org. I am curious if you also heard the same. With zero correspondence for weeks, Fidelity seemed concerned as well.

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    John - May 29, 2017

    @Heather – yeah, I filled out my transfer forms and submitted them to Fidelity on May 1st. They originally gave me an estimated transfer date of 5/15. As of 5/29, my shares still have not been transferred from LOYAL3 to Fidelity. And per Fidelity … LOYAL3 has not processed the request yet.

    When I log into my LOYAL3 account, I get a pop-up window stating I have restrictions on my account. It is a bit frustrating but it will all work out soon I believe.

    Have you tried to log into your LOYAL3 account recently? Keep me posted on what you find out.

    Reply
Lydia Vierson - June 6, 2017

I also opted to transfer to another brokerage and that was finally completed but now I am still waiting for my fractional shares to be sold. My understanding was Loyal3 would be doing this last week but it’s not happened yet. I finally have access again to my statements etc within Loyal3 but notice there is no statement for May 2017. I’m pretty meticulous about records so hopefully they follow through soon. Agree support hasn’t been useful and just get form responses.

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