Need reassurance - Moving to VG from Ameriprise

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RetiringSomeday
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Need reassurance - Moving to VG from Ameriprise

Post by RetiringSomeday »

Apologies for the length

Earlier this spring I was at the library and since I had never really studied up on investing I figured I should. I read Frank Armstrongs "The intelligent investor" and subsequently "The four pillars of investing" "A bogleheads guide to investing" "A bogleheads guide to retirement" and "The right financial plan". I am planning on reading "investors manifesto" next and have been getting on here and reading posts daily.

As referenced in these earlier posts of mine

http://www.bogleheads.org/forum/viewtop ... highlight=

http://www.bogleheads.org/forum/viewtop ... highlight=

I am moving all of my Simple money to VG from Ameriprise. I already moved monies from Edward Jones and LPL financial with no problems/hassles but Ameriprise has been a different story.

My/Our ameriprise rep is a client of ours (veterinary clinic) and I was sensitive to moving all my money away from him as reference in an earlier post and thought I got some good advice which I tried to employ.
"John, I very much appreciate all of the help that you have given to me with our SIMPLE IRA. I don't know that I could have done it without you. However, now, I'm really itching to do this on my own. I'm going to move the money to Vanguard. If it turns out that I'm making a mistake, please don't make fun of me when I ask for your help again!"
This, unfortunately, did not work as well as I had hoped. Our first conversation was tense and I think he left it thinking there was still a chance I wasn't going to move my money away.

I had to call him again today as there was (of course) a snafu in some of the specifics of moving the money over. Today was not nearly as pleasant to say the least. He re-enforced to me that he would have beat Vanguard 500 index last year net of fees. He said that he moved my $ from a moderate aggressive to aggressive stance during the 2008 drop which allowed me to rebound so well since.

Beyond that he said we must have a different way of looking at things because he tries to do business with the people that do business with him - he thinks that that is the right thing to do. He sent his wife up a few days ago to get some info (I found this out later) and he brought it up to me today that they had spent $5000 with us over the last 2 years since he transferred all his pets to us. Additionally he re-enforced that he does not even think to buy his pets medications over the internet - he always buys from us. He was not exaggerating these things - I checked later.

He did say that if my partner moved his money away from Ameriprise he would probably be taking his business elsewhere. He also noted that he refers other clients to us as well (this I couldn't confirm but it may well be true). He says he knows that we are a somewhat more expensive clinic but he thinks we are worth it - further he thinks that the expenses with Ameriprise are worth it as well and I shouldn't be so short sighted as to only think about the fees.

I think it is apparent that he isn't handling this all that maturely and I expect you all to tell me as much. My biggest hangup is trying to rectify in my mind some of the other core values of mine that I usually try to not waver from. I do try to keep my business local, I am willing to pay from extra service, I do try to support those that support me and I certainly don't try to create "enemies".

Anyway, I feel like crap about the whole deal. Best to get it behind me I suppose and move forward before it an even more difficult thing to tackle. I guess I am just looking for encouragement that I am not necessarily being penny wise and pound foolish.
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Ted Valentine
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Post by Ted Valentine »

You got to do what's right for you. I think the way he's acting says a lot. I think your instinct to move it is right. I would not want to do business with someone that responds that way. You have to be prepared to let the chips fall where they may with the guy. What you said initially was fine. Try and limit any further conversation about the issue, because then he just turns on the salesman act (or worse the threats).

You can do the transfer online and not have to contact him again: https://personal.vanguard.com/us/openac ... ctType=TOA
Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.
dbr
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Post by dbr »

In some communities "I do business with you and you do business with me." is how society is structured and you ignore that at your peril even if in your estimation the deal isn't that great for you. It can be a tough obstacle course to navigate. Of course at the extreme end you find the Madoff's of the world, but there can be a good end worth the investment as well.

PS At least the investment guy isn't your brother in law or even worse your mother in law.
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halpain17
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Post by halpain17 »

Just keep in mind that... No one in the world can or will look out for YOU as well as YOU can or will. Don't let some guy blackmail you into giving him your business. His business is not your responsibility, but your family is. Get him out of your mind and decide whats best for you and your family. Then, go through with it. If he tries to stand in your way then move him aside. He would be more of a burden than an aid.
“ The only way to “beat an index” is to invest in something other than the index. Why would you, when the only source of long-term risk and return data is the index ?” -Hebner, Mark
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Post by pkcrafter »

Anyway, I feel like crap about the whole deal. Best to get it behind me I suppose and move forward before it an even more difficult thing to tackle. I guess I am just looking for encouragement that I am not necessarily being penny wise and pound foolish.
Moving to Vanguard is not penny wise, it is pound-wise. Ameriprise is too expensive and I have a pretty low opinion of their sales techniques. It's just unfortunate that the guy is trying to make you feel guilty as well as coerce and intimidate you. Cheap shot, and for me that would be all it would take to drop him. Tell him if he can find a better veterinarian then he should by all means go there.

If you still not convinced, review a couple of the discussions here.

http://www.google.com/search?q=ameripri ... =firefox-a


Paul
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livesoft
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Post by livesoft »

Did you offer to sell pet meds to him at internet prices? If not, why not?
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IMADreamer
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Post by IMADreamer »

If one client is going to make or break your business then you have bigger problems then this. However I suspect this one client will not make or break your business so to heck with him. You have to do what's best for you and your money. He's just looking out for what's best for his money.

So I say good luck with the money move and enjoy the lower costs at Vangaurd.
ShowMeTheER
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Post by ShowMeTheER »

He spent $5K with you in 2 years - and only a portion of that was bottom line profit to you.

You sound quite successful although I haven't seen asset $ listed in your posts - think about how much you are spending on him not just the past 2 years but for many years in the future - regardless of whether you actively use his services or not. You win in a landslide by getting your assets out of his management.

Much different businesses that the two of you are in...
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Christine_NM
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Post by Christine_NM »

Chin up, and "Invest like a Marine" -- well, the Boglehead Marines anyway.

Please read this post and article if you have not already:

http://www.bogleheads.org/forum/viewtop ... 1308254139
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lawman3966
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Net Cash Flow

Post by lawman3966 »

While no one here can give you a comprehensive answer as to what the right thing to do is, you could at least settle for yourself what the net flow of cash is between the two of you.

Whether you tell the forum or not, you could calculate what you pay to A-prise in fees each year, based on your assets and their asset-based fees, and compare that figure to what your profit is from servicing the Advisor's pets.

This may not be the entire calculation. But, it should help narrow down the issue. If hypothetically you were paying 2.5% of assets on $ 1 million each year, you'd be paying $25,000 a year to get $2500 worth of business (NOT $2500 profit, mind you) from your client - sounds like a bad trade.

Your advisor likely knows the numbers well, and seems pretty sure that he's better off having you service his pets and keeping you as a customer. But, you can't BOTH be better off with this arrangement.

If you establish the fee levels, your next step would likely be pretty clear.
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Frugal Al
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Post by Frugal Al »

You've got to do what's best for you and your family. Just as he should and probably does. If he had come to you and said he had to take his vet business elsewhere that was better for him and his situation, you would understand his case, right? After all, it's not like you're cheating on him with another advisor. You're taking on the responsibility yourself.

Just continue to handle it professionally. Let him know if he ever needs veterinary help your business is always at his service. Few people stay in business relationships that aren't good for both parties. When it does work, it's great. When it doesn't work it can create resentment and animosity. Better to move on than let that happen.

I find it interesting that at this point in time he's trying to point out his "value added" to your financial planning circumstances and that he took a more aggressive stance with your portfolio in 2008. Were you unaware of this yield chasing?
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retiredjg
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Post by retiredjg »

As I understand it, once you've had the SIMPLE IRA for something like 2 years, you are allowed to transfer money out without penalty, right?

If you look at this from your Rep's point of view, he has provided you with exemplary service, spent a lot of money at your clinic, and also referred a bucket-full of clients who are also spending lots of money at your clinic. He sees himself as being a nice guy and someone who is helping you out. Now, for no reason, you are pulling out of the (unstated) you-scratch-mine agreement that the two of you obviously had.

Whether that's accurate or not, I'm betting that is how he sees it. So what can you do?

Do you really need his business? Do you really need his referrals? Can he damage you and/or your business in some way? If the answer to those questions is "yes", you might need to look for a middle ground - like move some money out of the SIMPLE and leave some there.

Let's say you have $500k in your SIMPLE and move half out, leaving him with $250k to manage. Is he really going to act the fool and take his pets elsewhere? I doubt it. The question would be "how small a carrot can I leave at Ameriprise? I don't like this answer and you probably don't either, but if the fact is that you MUST maintain good terms with this man, figuring out the cheapest and best way to do it is a win for you. If he were a gentleman, of course this would not be necessary.

If you can afford to tell him to shove it, I'd look into not only moving my own money away, but moving your entire company away from Ameriprise. I think you can probably do better, but don't go from frying pan into the fire....

It would be interesting to run the numbers - just how much are you paying Ameriprise each year? Not just you, but everyone at your clinic. I bet it's a ton.
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RetiringSomeday
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Thanks!

Post by RetiringSomeday »

Thanks for all the responses
Originally posted by Ted Valentine: I think the way he's acting says a lot. I think your instinct to move it is right. I would not want to do business with someone that responds that way
As the day progresses this is exactly how I am feeling
Originally posted by halpain17: Don't let some guy blackmail you into giving him your business
Exactly
Originally posted by livesoft: Did you offer to sell pet meds to him at internet prices? If not, why not?
Help me understand the lesson you are trying to convey livesoft. I didn't but the clinic policy is that if people request that we match internet prices we will (assuming it is not below our cost and yes sometimes it is). Whether I like or dislike this policy is another subject I suppose.
Originally posted by IMADreamer: If one client is going to make or break your business then you have bigger problems then this
Agreed - his % of our total business is about the same as admiral share expense ratio's ;)
Originally posted by ShowMeTheER:

He spent $5K with you in 2 years - and only a portion of that was bottom line profit to you.

You sound quite successful although I haven't seen asset $ listed in your posts - think about how much you are spending on him not just the past 2 years but for many years in the future - regardless of whether you actively use his services or not. You win in a landslide by getting your assets out of his management.
Thanks for the compliment and I do agree
Originally posted by lawman3966:

Whether you tell the forum or not, you could calculate what you pay to A-prise in fees each year, based on your assets and their asset-based fees, and compare that figure to what your profit is from servicing the Advisor's pets.
It is about breakeven to me personally but if we include everyone that he services at the clinic, my partner most specifically, he is coming out way ahead. He is playing a dangerous game to be as forward as he was in my opinion. I wouldn't dare treat a client that was leaving my services the way he did.
Originally posted by Frugal Al:

. If he had come to you and said he had to take his vet business elsewhere that was better for him and his situation, you would understand his case, right?

Yes I would

Just continue to handle it professionally. Let him know if he ever needs veterinary help your business is always at his service. Few people stay in business relationships that aren't good for both parties. When it does work, it's great. When it doesn't work it can create resentment and animosity. Better to move on than let that happen.

I think things are probably damaged beyond repair with me and him at this point. I COMPLETELY took the high road with him today.

I find it interesting that at this point in time he's trying to point out his "value added" to your financial planning circumstances and that he took a more aggressive stance with your portfolio in 2008. Were you unaware of this yield chasing?
Honestly I was so dense to my situation as I was focused on other things in the past that I really just absolutely trusted anything he recommended.
Originally posted by retiredjg:

If you can afford to tell him to shove it, I'd look into not only moving my own money away, but moving your entire company away from Ameriprise. I think you can probably do better, but don't go from frying pan into the fire....
After the way he treated me today I was basically ready to tell him to shove it. As a clinic we periodically get threats that someone will badmouth us for XYZ but it has never been very impactful in the past. Most reasonable people consider the source. I was especially diplomatic for the sake of my partner however. $ coming in are his as well and he still has money invested with this adviser.




Thanks Bogleheads
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retiredjg
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Post by retiredjg »

What does your partner want to do?
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Post by yobria »

I wouldn't let a client blackmail me into an awful investment situation. It's a matter of principle.

Nick
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RetiringSomeday
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Post by RetiringSomeday »

retiredjg wrote:What does your partner want to do?
Not much as near as I can tell.

I have purposefully kept this as my decision only for now. He has asked a few questions and I have told him my stance but have not tried to convert anyone else. Long term this may well change........
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retiredjg
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Post by retiredjg »

RetiringSomeday wrote:
retiredjg wrote:What does your partner want to do?
Not much as near as I can tell.
In that case, the rude rep will probably just switch all his business to your partner and everyone will be happy. :lol:
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Ted Valentine
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Re: Thanks!

Post by Ted Valentine »

RetiringSomeday wrote:Thanks for all the responses

Thanks Bogleheads

Thanks for responding. I like to know that people actually read what people post here. Sometimes I wonder.

Best wishes to you.
Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.
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