The Offer
- Brokerage Frec is offering a $250 bonus to both parties when the person being referred opens a new direct indexing account. The direct indexing account has a $20,000 minimum
The Fine Print
- . There is a limit of four (4) referrals or $1,000 in bonus amount per
qualifying brokerage customer per 12-month rolling month period - Each person referred should be someone you have a direct, personal relationship with. You may not distribute a Referral Link or otherwise solicit anyone through mass email, any form of commercial advertising or other similar means. Furthermore, Frec reserves the right to seek reimbursement from any customer (including by deduction from their brokerage account) of amounts paid as Referral Bonuses to customers solicited via mass solicitation. Please note that in certain circumstances the deduction of such amounts from your account may result in a negative balance.
Our Verdict
Pricing is 0.1% or $20 annually for $20,000. You’re limited to 4 referrals ($1,000) per account. Feel free to share your referrals in the comments below.
I’m seeing daily trade reports, so I’m not excited about the upcoming tax reporting nightmare, regardless of whether I’ll be staying with the platform when the holding period ends or not.
Personally, my index portfolio is up $1k, which is amazing but I don’t think this will last through January when I’ll likely close out my positions. I just cashed out my top 2 positions to hedge against losses.
Curious to hear what folks are doing if anyone wants to share.
Oh, Okay, I’ll go first…
ntn
My choice was S&P 500 index… and exclude… get this.. the BEST performing sectors for 2024 at the time I went all in.
The logic was… buy low, sell high… Why pick the current best sectors, when they have the most to lose, and the lesser sectors, have the most to gain?
(Keep in mind, this was prior to the election results.)
I excluded IT, and Utilities sectors. And, two stocks, because I don’t care for either. Telsa & GM. Those two are some of the best performers this quarter…. last I checked.
For P2, I chose the CRSP ISS US Large Cap ESG index, to reduce the shear number of stocks. AND, chose to exclude the largest sectors (IT & Health Care), with the intention of hopefully reducing the amount of trades.
P1: Opened with $20,001 on Oct 5, 2024
Currently at $21,048.11
P2: Opened with $20,001 on Oct 11, 2024
Currently at $21,436.70.
Glad that your portfolios are doing so well! And thanks for explaining the logic.
I did the opposite and excluded the energy sector from the S&P 500 index based on…um, feelings. At this point in my investing journey, I’ve shifted to mostly indexes, but I still dabble a bit in individual stocks in hopes of climbing out of the hole I dug for myself from my stock picking days in 2020.
Assuming there aren’t any wash sales (which there wouldn’t be, unless you were trading in the stocks that Frec chose outside of the account), you can report it all in two lines on Schedule D. It is the “Totals for all short-term/long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments” line (1a and 8a). If there were wash sales, you would need to manually back out the tickers and input them on Form 8949. I specifically chose midcap for this reason because I do occasionally dabble in S&P 500 stocks individually and want to avoid wash sale hassle.
I did CRSP US Large Cap and marked out the 2 companies I previously worked at as I still hold ESPP shares from each. The lack of specific exclusions is what had previously steered me away from the various robo-advisors. Dec 6 had me just shy of $21.5k, now little lower at about $40 shy of it.
Signed up, got a call after sign-up if I had any questions. Good customer service, figured I’d try it out for the TLH efficiency. Lowest rates out there, I think WealthFront is firing back in 2025 (saw some chatter on reddit) with a 0.9% direct index option. But for now this is the clear winner, low fee and low start-up capital. https://frec.com/referral/CKNLANAE
They have been calling folks to ask their opinion of the service. I asked them to offer a bonus for moving in funds, on par with what eTrade and Merrill are offering ($500 for $100k, $1000 for $250k) for existing clients, and they are considering it – especially since many of these ETFs would need to be sold to convert to direct indexing and require payment of taxes.
Looks like they updated the referral program PDF on Oct 30th. I haven’t compared it word for word, but the big change I noticed:
The Eligible New Customer must use your referral code and successfully open a new Frec brokerage account, create a Frec Direct index portfolio, make the minimum required initial funding of cash and/or stocks/ETFs and that minimum required initial funding amount must remain invested for ninety (90) days.
So, it does now state the $20K of funding must remain invested for the 90 days. I think that was a given expectation before, but hopefully some people didn’t pull the money shortly after funding and still expecting the bonus.
https://frec.com/referral/GZIEUPLL
0/4 as of now, finally into this game, thanks!
https://frec.com/referral/AALAAIAC
at 0/4
Could someone please tell me if it is easy to signup online (after I enter the email in the first step) or if they ask to provide/upload various ID’s and other information before the account is opened?
Also, 20K min to open or does the account balance has to be min 20k at all times?
Thanks
They didn’t ask my P2 or I for any ID uploads or selfies, etc. YMMV. It was the simplest application process I have seen in awhile.
There is no mention of having to maintain $20K. Everyone, regardless of being involved in a promotion or not, has to have a minimum opening deposit of $20K to open a direct index account. As soon as $20K balance is obtained, the referrer gets an email stating:
Date:10/08/24 “Great news! Your friend (xxxxxx). set up Direct Indexing on Frec using your invite link, so you’ve earned $250.00.
Your reward will be credited to your direct indexing account on January 06, 2025.”
What the terms fail to mention is when you can withdraw, transfer, or sell off your “direct index portfolio”. Personally, I am of the belief it’s 90 days of “hands off”, based on the rewards tracker on the account, or you forfeit. If you want clarification, please reach out to their support.
Orange Republic
Do we have to invest in their direct index products or can we just keep $20K in the account and purchase other investments such as ETFs?
You get your choice of 1 of 14 different direct index portfolios to invest in as part of the promotion. The different options are listed on their homepage. There is no EFT option, SGOV, money market/savings account, etc.
Sam
They have the ability to hold “self managed stocks” and a treasury option ($100 minimum), but per terms, those would not count for the $250/$250 referral promo with $20K minimum.
My link is https://frec.com/referral/DDLCLCNA.
Thank you in advance for using. I’m at 0/4. I will check daily.
Please delete 1930766 and 1925850
Were they deleted?
They were asking to have them deleted, I assume because they have met their 4 referral cap.
Mike D