I recently graduated with a finance degree from a well known undergrad business program. I'm going to be attending law school next fall so I classified myself as a student in the margin application. Since I just graduated I don't have any money yet. I opened a margin/cash account with 5k and just received an email saying: "At this time, based on the information you provided regarding your investment experience and knowledge, employment, net income, and net worth -- among other criteria -- your account was not approved for margin privilages." Has anybody else had any experience with this? Is there anything I can say or do to change their minds? I really wasn't even planning on using the margin, just wanted to avoid free riding and settlement dates. Are there any other brokers that may be more lenient? Any help would be greatly appreciated. Thanks
Some, of these firms to protect there own interest has strict guidelines. I had the same situation years ago and I had to basically lie on the app.
You probably made a few mistakes. Here are probably a few reason why you got rejected. Did you answer these questions? 1. When they ask you net worth and income did you say none or a very low amount. If it's to low you, will be rejected. Also if you said you were unemployed, that hurts you. Usually put any firm they never check. 2. In experience i hope u didn't put 1 year or something u should of put 3-4 years and excellent experience. 3. I hope u put speculation or trading profits as your choice of investment. Anything else might get you rejected. IF YOUR to honest they will reject you. Next time make your application look better.
Instead of figuring how to get around as suggested above, maybe you should grasp the purpose of these requirements. With $5K, you will almost be guaranteed to lose it. There are very very few people who made a hobby/living off a $5K account. usually, you will be donating your money to others.
Thanks for the suggestions. When I selected student it didn't give me an option for employment. I also don't recall filling anything out related to my trading experience. I think I'm going to give them a call and see if I can work something out.
TDA could care less if you loose your $5000. They are only protecting TDA from a potential law suit from a client who could be damaged by the loss of their limited funds. When an applicant overstates their application with lies, the broker is sort of off the hook on liability. I see little reason for you call and talk to TDA unless you have a source of money you did not disclose on the application. If you really want a brokerage account, you will most likely have to fill out an application with a different broker.
If "student" is selected, it sounds like the applicant is automatically denied... I don't think a phone call will change the decision. Best thing to do is apply at another firm and "enhance" your income, net worth, years of experience, etc. Just like you would on a resume for a job...
I suppose if you open an account with 5k then technically you're self-employed, aren't you? No one is going to argue with you because they do not like the way you define employement. If you make money you'll be paying taxes.
Just call them and ask what part of my application was denied so that when you redo it you will know where the problem was.