Starting a New Chapter! Moving to VG....

[MikeAndWilson2012]

Hi Everyone!

So glad I found this board, I only wish I would've spent the time to learn more about Vanguard years ago, it may have saved me from the headache I'm trying to get out of now, Ameriprise!

So I want to first start-off by giving a real-quick overview of myself/family, and what we got to where we are, so hopefully others on this board can quickly help steer/guide me along the right path.

My Wife and I have been married 10 years now, I'm 38, she's 40. We have 2 children, ages 8 & 5. I'm employed (engineer), and am quite blessed in that I make a decent salary, so that she has been able to stay home with the kids since my first child was born.

We are debt free, with the exception of our home mortgage, and one car loan. So essentially I have quite a bit of comfort room for available cash every month versus outgoing expenses.

My wife and I inherited Amerprise accounts (Roths & Trad. IRAs) a few years back, due to the unfortunate passing of both her parents. We essentially have just left the accounts as is, only doing the required RMDs, we tapped into it one single time, only to use a chunk of cash to assist with our downpayment on our new house we just moved to....

We of course were automatically assigned an Ameriprise advisor, since we inherited the accounts. Throughout my work history, I always contributed a decent amount to the 401k of each company I've worked for throughout the years, but never took the time to research investing much further than that. So needless to say, when we finally allowed the Ameriprise advisor to review everything with us, we fell for the pitch, including Financial planning services.

All said and done, I allowed Amp. to rollover two 401ks I had sitting idle from previous employers, plus little accounts I had sitting in Etrade that I never really funded, plus dupe me into half a dozen different VULs, some on me, some on my wife, some on the kids!


Thankfully the VULs are only a few months old, hardly anything cash wish in them yet, If I flat out surrender them...SCs are 10-15 years on most, so I obviously will lose 100% of whatever is in them.

What I just realized, is my one 401k was rolled into an Ameriprise "Riversource RAVA 5 Advantage" Variable Annuity (deferred)..... $40,000 value. 7 year Surrender period.


Two weeks ago, I setup a new Vanguard account, and setup my first transfer from this Ameriprise pile of accounts. I setup to transfer my other 401k Rollover, that was just sitting in an Ameriprise IRA account, but only in a Money Market fund.

My ultimate goal is to get everything out from Amp. that I can get out, and into Vanguard. Then once I reach that stage, I can hopefully get some good help from folks on here how to best invest that money!

But at this point, I wanted to pass my initial questions on the bogle experts here!


1) My plan moving forward is to surrender all of these VULs, since all have less than $1k in any them (all have only been open 8
months or less), I will chalk up this total loss as a "lesson learned".....

Does everyone agree this is the right move with these??


2) Can I do anything with this "Ameriprise $40k annuity", without losing the approx. $5k SC? even with a 1035 exchange to
something at Vanguard, I still pay that SC, right?


3) I would assume with my other Inherited IRAs, I should just move them straight into similar Traditional IRA accounts at VG?


4) Is there anything at all with Vanguard, that I should be aware of now (before moving more over), related to any surrender
charges, or account rules, etc, that would "lock me in" or tie up my money, that could lead me into a similiar situation where my money is "tied up" in rules,
etc etc..

(basically just covering worst case scenario, if for some reason I did want to take my money out, could it possibly have
pains like Ameriprise)


I don't want to ever get myself in a mess like this again with any Advising company, I certainly have the brain power to make my own investment decisions, I always made the false assumptions in the past that the "market" was too complicated for me to understand, and I had to leave those things to the pros (ie Amex/Amerprise, Smith Barney, Schwab, etc)....

So I did start from the advice here on the Wiki, got the recommended books, etc....and began the process to VG...hopefully finally moving in the right direction!

Thanks so much for any help you all can provide!



- Mike

[Johm221122]

Congratulations on being awakened to amerprise high fee and bad advice!!
Check if each fund has seperate charge to transfer,you may want to make each Ira one fund(cash account fund)
Read asking portfolio question to get better answers
call vanguard to get ball rolling
others will give better annuity advice
good luck!

John

[RadAudit]

Welcome to the forum.

3) I would assume with my other Inherited IRAs, I should just move them straight into similar Traditional IRA accounts at VG?

Call Vanguard and get the ball rolling on that one. Sounds as if It should be a fairly uncomplicated transfer.

4) Is there anything at all with Vanguard, that I should be aware of now (before moving more over), related to any surrender
charges, or account rules, etc, that would "lock me in" or tie up my money, that could lead me into a similiar situation where my money is "tied up" in rules,
etc etc..

Not exactly. However, there are a couple of funds that - one of them is Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX) - have small purchase and / or redemption fees. Usually the fees are there to discourage trading in thin markets / small funds. Most of the funds do not have those fees.

All funds have their fees posted on the info that's available on line.

So I did start from the advice here on the Wiki, got the recommended books, etc....and began the process to VG...hopefully finally moving in the right direction!

Sounds as if you are moving in the right direction. Take your time. And - free advice - keep your money in a money market fund until you decide on an asset allocation that matches your risk tolerance before investing. Shouldn't take more than a couple of weeks / months to find those answers. Three or four funds should be enough (three fund portfolio) - although you'll get a lot of discussion on this forum about that.

Best of luck

[MikeAndWilson2012]

Hi Everyone,

I am Soooooo glad to finally be back here posting in this thread, and with happiness! So after about 7 months of a long, sometimes aggrivating process, I can officially say 100% of my former Ameriprise assets are 100% over to Vanguard.

And wow did Ameriprise live up to their reputation for "milking on the way out". Every transfer was a $100 charge, I had something like 8 or 9 accounts total to move.....plus, interestingly enough, my one particular account that was a Roth IRA, was a $230 charge!! lovely...

Closing out the 5 VULs I had was fairly straightforward was far as the paperwork goes, most forms for cancelling things like that can be download, filled out, and faxed directly in to Amp office...the painful part was saying goodbye to the Surrender charges...two of them were minimal, as they were policies opened against my two children (one each), and they only had about $500.00 to $600.00 in each, but the two on my wife and I, each had about $1800.00 or so...that hurt a bit.

The fifth, thankfully, I was able to terminate whilst still in the "free-look" period (thanks to "waking up" shortly after I signed into it)....so I lost nothing on that one, got my full first two premium payments back...

The final account that just moved over, that was a real bugger, was the Ameriprise RAVA 5 annuity, it was a $40,000.00 annuity, originally transferred from a previous 401k account I had from my former employer..so Amp. moved the whole 401k into a $40k annuity, inside a Traditional IRA wrapper. Nice....double wrapping.....

After going through a month or two of trying to get this thing transferred, with the help of conference calls etc between myself, Amp, and VG, we were able to move this over entirely as a normal Traditional IRA transfer, and placed it into my already existing Traditional IRA account at VG.

Sadly, I lost $3000.00 in Surrender Charges thanks to Ameriprises RAVA 5 SC schedule, which went out to 7 years before any significant drop at all! ugggg!!!

A long painful process for all of this, but I am now done. Thanks to the wonderful people at Vanguard, I am starting a new chapter, and a happy one. I dealt with so many VG reps from all different departments over the last 6-7 months, I can honesly say without hesitation all 100% of them were superb, such terrific helpful people. Such a great, helpful company!

Now at this point I'll need some help going over all of my assets, accounts, etc to clean it up, I mostly moved the assets in-kind, since 95% of them could be transferred without having to liquidate....so many of the funds still held are extremely expensive/loaded...so I'll need helping re-allocating etc..

I will post my whole breakdown/etc in the "Personal Investments" forum in the next week or so, once I get it all together, and I can finally get this moving in a postitive direction! Thanks again to everyone on here that has helped out with this!

[letsgobobby]

That is great news. Taking your medicine like a man! You should file a complaint against Ameriprise for the 401k annuity. Look forward to seeing your portfolio.

[skibbi9]

Didn't realize how terrible some of ameriprise can be.

Good work so far, but yes, post the breakdown and get your ER%s down.