|
How old do I have to be to open a brokerage account?
You must be at least 18 years old to establish a brokerage account.
I would like to open an account under the Uniform Transfer to Minors Act (UTMA) for my child, can both my spouse and myself serve as custodians?
No. There can only be one custodian per UTMA account.
Once a Uniform Transfer to Minors account is established, what age does the minor need to reach before the assets can be transferred into their name?
The age of majority in most states is 21. Please note that the legal age a person may establish an account is different than the age of majority. Age of majority is the age that each state establishes that a minor may take possession of gifted funds or assets.
Can I open an account even if I am a resident of a foreign country?
Yes. You will be required to fill out a W-8 form if you are a foreign resident. However, payment for trades can only be accepted in U.S. funds.
What is a Transfer on Death (TOD) account?
A TOD is an account where an individual/joint owners designate(s) beneficiaries to whom all assets will be transferred to upon receipt of notice of the account owner(s) death.
How many beneficiaries can I have on a Transfer on Death (TOD) account?
You can have up to four beneficiaries on each TOD account.
I have an existing account, can I change the registration?
In order to change the registration on your existing account you must complete the new paperwork which pertains to the type of account you wish to establish. You will also need to include a Letter of Instruction (LOA) instructing us to move your assets to your new account. Please visit Account Types and Online Apps to download the appropriate paperwork.
Back to Top
What is the difference between the Dow Jones and the NASDAQ?
The Dow Jones Industrial Average is an indicator of stock market prices and is based on the share values of 30 leading companies listed on the New York Stock Exchange. The NASDAQ, or National Association of Securities Dealers Automated Quotation System, is a computerized system that facilitates trading by providing broker/dealers with current bid and ask price quotes on over-the-counter stocks and some listed stocks.
I purchased a stock and thought I was entitled to receive the next cash/stock dividend. I found out later that I was not entitled. Why not?
To determine whether you should get cash and most stock dividends, you need to look at two important dates. They are the "record date" and the "ex-dividend date".
When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.
Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.
How do I transfer securities from another brokerage firm to an account with your firm?
You will need to fill out a Transfer of Assets form and send it to us for processing. This is called an ACAT transfer and normally takes three weeks to process. When returning the Transfer of Asset form, please enclose a copy of your most recent statement from the firm you are transferring from.
Who is your clearing firm?
National Financial Services LLC, a company of Fidelity Investments, is our clearing firm.
Back to Top
When can contributions be made to an IRA?
Contributions can be made to your IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions.
When can I withdraw or use IRA assets?
Because an IRA is a tax-favored means of saving for your retirement, there are rules limiting use of your IRA assets and distributions from it. Violation of the rules generally results in additional taxes in the year of violation. Please check with your brokerage representative on the rules regarding taking distributions from your IRA account.
At what age am I required to start taking minimum required distributions from my Traditional IRA?
Minimum Required Distributions (MRD) are distributions that, by law, are required to begin when you reach the age 70 1/2 (more specifically by April 1 following the year you reach 70 1/2).
Is there a penalty if I fail to take Minimum Required Distributions from my Traditional IRA?
Yes. If you fail to take any or all of your MRD, you may be subject to a penalty of 50 percent on the difference between the amount that should have been distributed and the amount actually taken.
What if I inherit an IRA?
If you inherit a traditional IRA, it is subject to special rules.
Inherited from spouse.If you inherit a traditional IRA from your deceased spouse, you can generally roll it over into another traditional IRA established for you or you can choose to treat the inherited IRA as your own. You will be considered to have chosen to treat it as your own if:
- Contributions (including rollover contributions) are made to the inherited IRA, or
- Required distributions are not made from it.
Inherited from someone other than spouse.If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that contributions (including rollover contributions) cannot be made to the IRA and you cannot roll over any amounts out of the inherited IRA. But, like the original owner, you generally will not owe tax on the assets in the IRA until you receive distributions from it. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.
When money is moved from a decedent's IRA to a beneficiary distribution account (BDA) or a surviving spouse's IRA, is the money taxable and is it reported to the IRS?
No. Money distributed from a decedent's IRA to a beneficiary distribution account is a nontaxable transfer. It is not reported to the IRS.
When a distribution is taken from a BDA, is it a reportable event?
Yes. Money being distributed from a BDA is a reportable event. It is reported on Form 1099-R with a distribution code of 4.
Can I contribute securities to my IRA?
Annual IRA contributions can only be made in cash. The only exception is in the case of the rollover contribution from another IRA, IRA Rollover, SEP-IRA, SIMPLE or a Qualified Plan.
Back to Top
What is an Internet account?
It is designed specifically for customers who prefer to handle their finances online with little or no broker contact.
I am an existing customer, do I need to open a new account to trade via the Internet?
No. If you already have an existing account, download and complete the Electronic Investing Agreement, and mail it to UMB Financial Services, Inc., 928 Grand Boulevard, Kansas City, Mo. 64106. Once UMB Financial Services receives the agreement, you will receive an e-mail message with your ID number. Your next step is to call UMB Financial Services for the release of your PIN number.
What are the Software Requirements?
- 486 megahertz processor with 16MB of RAM; Netscape 3.01 or higher or Microsoft Explorer 4.0 or higher
- Netscape can be downloaded online at Netscape.com free of charge
- Microsoft Explorer can be downloaded from umbscoutbrokerage.com free of charge
- 128-bit encrypted browser
- 800 x 600 screen resolution
How do I determine my browser's encryption level?
Netscape:
Follow the instructions below to determine your browser's encryption level:
- From your browser's top menu, select HELP
- Select About Netscape
- The third block that you will see will refer to RSA Encryption Engine. The tag line at the bottom should read, "This version supports U.S. Security with RSA..." If so, you are running the 128-bit version of Netscape. If the tag line at the bottom reads, "This version supports International." then you are running a 40-bit version.
Microsoft Internet Explorer:
Follow the instructions below to determine your brower's encryption level:
- Launch Microsoft Internet Explorer
- Click Help > About Internet Explorer
- The second link will be the cipher strength and to the right of that will be your encryption strength, 40- or 128-bit.
What can I do to safekeep the security of my account?
Never reveal your password to anyone. Never write it down where anyone can find it or figure out what it is. Never access this site from a computer that an untrusted individual may have access to.
Back to Top
Understanding Mutual Fund Classes
As an investor, you may have read about "Class A, " "Class B," "Class C," or other classes of mutual fund shares. If you are thinking about choosing one of these classes, it is important for you to understand the differences between them.
What Are Mutual Fund Classes?
A single mutual fund, with one portfolio and one investment advisor, may offer more than one "class" of its shares to investors. Each class represents a similar interest in the mutual funds portfolio. The principal difference between the classes is that the mutual fund will charge you different fees and expenses depending upon the class that you choose.
What Types of Fees and Expenses Will I Pay?
First and foremost, check the fee table in the mutual fund's prospectus to find out the precise amount of the mutual fund's fees and expenses.
If You Buy Class A Shares:
Class A shares typically charge a front-end sales charge. When you buy Class A shares with a front-end sales charge, a portion of the dollars you pay is not invested. Class A shares may incur an asset-based sales charge, but it generally is lower than the asset-based sales charge imposed by the other classes.
A mutual fund may offer you a discount on the front-end sales charge if you:
- make a large purchase
- already hold other mutual funds offered by the same fund family
- commit to regularly purchasing the mutual fund's shares
You should ask your financial consultant whether any of these discounts are available to you.
If You Buy Class B Shares:
Class B shares typically do not charge a front-end sales charge, but they do impose asset-based sales charges that may be higher than those that you would incur if you purchased Class A shares. Class B shares also normally impose a contingent deferred sales charge (CDSC), which you pay when you sell your shares. For this reason, these should not be referred to as "no-load" shares. The CDSC normally declines and eventually is eliminated the longer you hold your shares. Once the CDSC is eliminated, Class B shares often then "convert" into Class A shares. When they convert, they will begin to charge the same asset-based sales charge as the Class A shares.
Class B shares do not impose a sales charge at the time of purchase. So unlike Class A purchases, all of your dollars would be immediately invested. But your expenses, as measured by the expense ratio, may be higher. You also may pay a sales charge when you sell your Class B shares.
If You Buy Class C Shares:
Class C shares usually do not impose a front-end sales charge on the purchase, so the full dollar amount that you pay is immediately invested. Often Class C shares impose a small charge if you sell your shares within a short time after purchase, usually one year. Class C shares typically impose higher asset-based sales charges than Class A shares, and since their shares generally do not convert into Class A shares, their asset-based sales charge will not be reduced. Class C shares are often used for asset-allocation purposes.
Class C shares do not impose a sales charge at the time of purchase, but they may impose a CDSC or other redemption fees.
Contingent Deferred Sales Charge (CDSC)
This fee is charged when you sell your mutual fund shares. For example, if you redeem shares valued at $1,000, and the mutual fund imposes a CDSC of one percent, you would receive $990. This CDSC normally declines the longer the shares are held and eventually is eliminated after a number of years, often in the seventh year that you own the shares.
Expense Ratio
A mutual fund's expense ratio measures the fund's total annual expenses expressed as a percentage of the fund's net assets. For example, an expense ratio of one percent represents an annual charge to the fund's net assets - including your proportional interest in those assets - of one percent every year.
The expense ratio includes the asset-based sales charge and other ongoing fees that are deducted from a mutual fund's assets to pay for the services of the mutual fund's investment advisor or transfer agent or for other expenses. Front-end sales charges and CDSCs are not included in the expense ratio because they are charged directly to the investor.
The fee table in the front of a mutual fund's prospectus provides the amount of a mutual fund's expense ratio and its front-end sales charge and CDSC.
Front-End Sales Charge
This fee is charged when you purchase mutual fund shares. For example, suppose you wish to spend $1,000 to purchase Class A shares, and the mutual fund imposes a front-end sales charge of five percent, you will be charged $50 on your purchase, and you will receive shares with a market value of $950.
Asset-Based Sales Charge
These are fees that you would not directly pay, but which are taken out of mutual fund's assets to pay to market and distribute its shares.
|
FAQ
