Should I leave Ameriprise?

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Topic Author
paveldatsyuk44
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Should I leave Ameriprise?

Post by paveldatsyuk44 » Tue Jan 26, 2016 7:48 pm

Hello All. I am very new to this board and have begun taking more of an active role in my retirement/investments (by active I mean making sure my wife and I are doing the right things with our money).

I am considering moving my investments from Ameriprise to Vanguard (or some other three fund portfolio). I pay my financial planner (who also happens to be a good friend) a "$500" annual fee and it appears that most of his recommended funds' expense ratios are too high for my liking, notwithstanding the selected funds seem to benefit Ameriprise on the backend. The financial planner has been very helpful with budgeting, but I'm leery about the choices and method of investing. I am motivated and confident that I could oversee my own investments and consult with a fee for service advisor as-needed.

My specific questions are the following.

1) Is dropping Ameriprise a "no-brainer"? I feel like it is, and I guess I just need reassurance...
2) Any reasons to stay in my situation?
3) What do you think of the funds he has us in?

Ivy Large Cap Growth... WLGCX
JPMorgan Value Advantage... JVACX
Eagle Small Cap Growth... HSCCX
Fidelity Advisor® New... FNICX
Eventide Gilead Class C ETCGX

For context, my current situation:
me: 34
wife: 34
kid: 1year old
income: approximately $200k/yr
mortgage: $348k, home value $475k
retirement age goal: 65

work retirement 401b plan: $60k (restricted to Nationwide offered funds, employer matches 10% of salary)
roth IRAs: $78k

froman118
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Re: Should I leave Ameriprise?

Post by froman118 » Tue Jan 26, 2016 8:13 pm

You're getting robbed. Move it to Vanguard and drop it in an appropriate Target Retirement fund. Depending what's available in the 401b you could try and get fancy and buy individual funds to minimize expenses. Your friend is costing you $1000+ per year.

dbr
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Re: Should I leave Ameriprise?

Post by dbr » Tue Jan 26, 2016 8:19 pm

In the old days, back in the small town, everyone who wanted supplies went to the general store and paid for what they got, maybe even on a tab. The doctor took care of everyone and if he was paid in eggs, so much the better. When a barn burned down people got together and helped out.

You are helping out your friend by giving him your money. Where in what you do is someone helping you out? Do you still think the exchange is fair?

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jmndu99
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Re: Should I leave Ameriprise?

Post by jmndu99 » Tue Jan 26, 2016 8:25 pm

Hello, you know what "they" say! If you have to ask, then you know the answer.

best of luck

JW-Retired
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Re: Should I leave Ameriprise?

Post by JW-Retired » Tue Jan 26, 2016 9:08 pm

paveldatsyuk44 wrote: 3) What do you think of the funds he has us in?

Ivy Large Cap Growth WLGCX ER=1.86%, 12b1 kickback fee 1% no load
JPMorgan Value Advantage JVACX ER=1.75%, 12b1 kickback fee 1% deferred sales load 1%
Eagle Small Cap Growth HSCCX ER=1.86%, 12b1 kickback fee 1% deferred sales load 1%
Fidelity Advisor® New FNICX ER=1.67%, 12b1 kickback fee 1% deferred sales load 1%
Eventide Gilead Class C ETCGX ER=2.18%, 12b1 kickback fee 1% no load
I think these funds are a laughably good example of a terrible group of funds. A reasonable ER is less than 1/10th of this and can be had at Vanguard/Fidelity/Schwab without any loads or 12b1 fees at all. (The 12b-1 fee is the amount of the ER that is paid to the salesman of the fund annually.)

You can and should Google the trading symbols to look up this data for yourself.

Welcome to the forum!
JW
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2comma
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Re: Should I leave Ameriprise?

Post by 2comma » Tue Jan 26, 2016 9:19 pm

You are wise to figure out that fees matter. If he had put you in Vanguard (or Fidelity Spartan funds) and he was adding some other value (a 2nd opinion, budgeting, tax help, estate planning (or hooking you up with the good guys in town thru referrals) you might be able to justify the $500 a year. But, that's $500/yr compounded for 30+ years plus the same on the Ameriprise fees and that gets to be a few hundred thousand and it doesn't sound like you're getting any value now.

Ouch, I just saw the ER's JW just posted. Run Forrest Run!
If I am stupid I will pay.

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BL
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Re: Should I leave Ameriprise?

Post by BL » Tue Jan 26, 2016 9:25 pm

The ER is what you don't get each year. One reason it is so high is that the broker gets a 1% kickback each year, on top of the "fee" you pay him. The fund would have to consistently out-perform an index fund of the same type to keep up on a consistent basis. That is not going to happen.

You have lots of choices in getting low-ER funds below 0.20%, much lower than your funds. Vanguard balanced funds, the 3-fund portfolio, etc. (Spartan index funds at Fidelity, but others may be more expensive.)

Try reading this pdf booklet for beginners by a recommended author, Dr William Bernstein:
https://www.etf.com/docs/IfYouCan.pdf
It also recommends the 3-fund portfolio.

Topic Author
paveldatsyuk44
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Re: Should I leave Ameriprise?

Post by paveldatsyuk44 » Tue Jan 26, 2016 9:42 pm

Thank you, dearly, for the replies and information. I'm sure I will be studying every inch of .org.

My next problem to solve is figuring how to explain this to my friend without completely insulting him personally. Business is business though, and it's my money.

I'm not sure if this is worth considering at this point, but should I wait for the market to come up a bit before moving things? Some of the funds are higher risk, and have performed worse than the S&P over the past couple of weeks. Maybe they will slingshot up as the overall market improves?? I still have the urgency to get the heck out ASAP, though!!

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BL
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Re: Should I leave Ameriprise?

Post by BL » Tue Jan 26, 2016 10:01 pm

paveldatsyuk44 wrote:Thank you, dearly, for the replies and information. I'm sure I will be studying every inch of .org.

My next problem to solve is figuring how to explain this to my friend without completely insulting him personally. Business is business though, and it's my money.

I'm not sure if this is worth considering at this point, but should I wait for the market to come up a bit before moving things? Some of the funds are higher risk, and have performed worse than the S&P over the past couple of weeks. Maybe they will slingshot up as the overall market improves?? I still have the urgency to get the heck out ASAP, though!!
I would thank him for the advice he has given, but that you want to manage on your own from now on. Just contact Vanguard, or where ever, and have them do the heavy lifting. You wouldn't even have to talk to him if you didn't want to, but it is fine to be polite, but determined.

Remember, you paid for any positive help you received, and so you are even; you don't owe him a thing. In fact, he owes you for any extra money he made from the funds he sold you and what he might get when you get out. Don't wait any longer as it won't be any easier. This is a common problem as it is to the advantage of the broker to be "nice", personable, and a "friend". Wait and see how "friendly" he is when he isn't making money off you. Actually we have a nice friend in that business but fortunately he hasn't tried to get our investments.

With the expense of those funds, the odds are that the sooner you get out, the better off you will be. Whatever you buy will also recover. No one can know what the market or individual funds will do.

Class C funds may have a 1% deferred load if you get out within 1 year. Still you want to get out fairly soon because of the high ER.

CedarWaxWing
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Re: Should I leave Ameriprise?

Post by CedarWaxWing » Tue Jan 26, 2016 10:22 pm

I have a married couple who are too stressed out on other life issues that are not of their doing... to get on the bucket and get out of Ameriprise in spite of having seen a lot of things I have sent them, some from bogleheads.org.

I have in fact bumped into a a score of friends that are in similar situations... but it is soooo impolite to discuss financial issues, right?

I have no doubt that a guy could make a good living getting permission to act on his friends' behalf by doing all the work to get them out of the hands of the con artists and call themselves financial advisor... especially the ones who work for some well known very wealthy big companies.

I have thought about getting a cfp certification and doing so... but I do not think I could charge my friends to do the right thing. Then again, by not having the CFP letters..... it may be hard for my friends to feel that I have the experitise to give such advise.

These are the same friends who often ask me for advise on the other things that I am licensed to charge for... but do not.

M.

cherijoh
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Re: Should I leave Ameriprise?

Post by cherijoh » Tue Jan 26, 2016 10:25 pm

paveldatsyuk44 wrote: My specific questions are the following.

1) Is dropping Ameriprise a "no-brainer"? I feel like it is, and I guess I just need reassurance... <-- Yes it is a no-brainer
2) Any reasons to stay in my situation? <-- no, although you may find out your advisor isn't really your friend depending on how he takes the news
3) What do you think of the funds he has us in?

Ivy Large Cap Growth... WLGCX <-- 1.86% ER + up to 1% deferred load :shock:
JPMorgan Value Advantage... JVACX <-- 1.73% ER + up to 1% deferred load :shock:
Eagle Small Cap Growth... HSCCX <--- ??? Could not find on Morningstar
Fidelity Advisor® New... FNICX <--- 1.67 ER + up to 1% deferred load :shock:
Eventide Gilead Class C ETCGX <--- 2.18% ER :shock:
IMO, with a "friend" like this, who needs enemies?
EDIT: I should have read through the responses as JW retired beat me to it.

Gnirk
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Re: Should I leave Ameriprise?

Post by Gnirk » Tue Jan 26, 2016 10:41 pm

Yes, the faster the better.

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William4u
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Re: Should I leave Ameriprise?

Post by William4u » Tue Jan 26, 2016 10:58 pm

Yes, a 1000 times yes.

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Rob5TCP
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Re: Should I leave Ameriprise?

Post by Rob5TCP » Tue Jan 26, 2016 11:51 pm

You stated he is also a good friend. If you leave, you will find out if he really is a friend or not.
Yes, I am cynical. But, it has been my experience from a couple of friend's experience when they left their "financial adviser".

A $500 annual fee, PLUS high expense funds -- double dipping IMHO.

sco
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Re: Should I leave Ameriprise?

Post by sco » Wed Jan 27, 2016 12:07 am

I will consolidate the answers of this board, and myself... I'll make them clear..

1) Is dropping Ameriprise a "no-brainer"? Yes
2) Any reasons to stay in my situation? No, and not many other situations either
3) What do you think of the funds he has us in? They are crap, absolute crap, but he may or may not know the difference. Or he doesn't care.. Either way, don't argue about it, just get out.

2comma
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Re: Should I leave Ameriprise?

Post by 2comma » Wed Jan 27, 2016 12:19 am

As said above Vanguard (whoever) will pull the money so no need to consult on the front end if you don't want to. Some recommend a short note to say thank you for your help... I have decided to manage my own investments. After that we'll see if he was a real friend.
If I am stupid I will pay.

red5
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Re: Should I leave Ameriprise?

Post by red5 » Wed Jan 27, 2016 5:16 am

paveldatsyuk44 wrote:My specific questions are the following.

1) Is dropping Ameriprise a "no-brainer"? I feel like it is, and I guess I just need reassurance...
2) Any reasons to stay in my situation?
3) What do you think of the funds he has us in?
As a former Ameriprise investor I will say...

1) Yes, it is a no-brainer
2) No.
3) Not sure, I did not check them out. But I am a believer in index funds...

I made the switch 4 years ago and I have no regrets. I am a DIY kind of investor.

Best of luck.

Cigarman
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Re: Should I leave Ameriprise?

Post by Cigarman » Wed Jan 27, 2016 6:30 am

Perhaps as a good friend he will give you some of your money back that he has taken when you leave. Let's not kid ourselves, advisers such as these KNOW that their ERs are high and have been trained in how to overcome this objection. You can't retire on the warm and fuzzy feeling of friendship.

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Re: Should I leave Ameriprise?

Post by Jack FFR1846 » Wed Jan 27, 2016 7:07 am

You don't have to contact the financial advisor. You can have the new house (Vanguard, Fidelity, etc) do all the work for you. I've moved about 6 funds over the last few years and have never talked with anyone connected with the places the money was coming from.
Bogle: Smart Beta is stupid

red5
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Re: Should I leave Ameriprise?

Post by red5 » Wed Jan 27, 2016 7:37 am

Jack FFR1846 wrote:You don't have to contact the financial advisor. You can have the new house (Vanguard, Fidelity, etc) do all the work for you. I've moved about 6 funds over the last few years and have never talked with anyone connected with the places the money was coming from.
+1 Great point. I had Vanguard transfer assets from two different brokerage companies. I did not have any contact whatsoever with either of them. It went flawless and seamless.

BogleMe
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Re: Should I leave Ameriprise?

Post by BogleMe » Wed Jan 27, 2016 7:44 am

This is as bad a group of funds as I have seen; usually they sprinkle in a no load/no 12b-1 fee fund just in case the client does some research. Your Advisor friend is either ignorant and an unserious investment manager (think 'salesman' only), or he is running a legal scam. How could someone partner their "friend" with these funds?

Your savings potential appears strong, so nip this in the bud now before the fees begin to overwhelm your portfolio's potential.

You can transfer the funds 'in kind' and not miss any market days, then gradually liquidate them at your new discount brokerage. Please read a couple of the recommended books in the meantime to prepare for managing this on your own.

And by the way, what do these salesmen think is going to happen when a client uncovers a fund lineup like this? Shouldn't the sales reps be trained to sneak a couple low cost funds in there so if the client actually does some research the salesmen can better defend himself? After uncovering a fund lineup such as the OP's, there is close a 0% chance of keeping the client, no? I suppose there is a very high correlation between the client's perceived interest and the cost of the funds.

JW-Retired
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Re: Should I leave Ameriprise?

Post by JW-Retired » Wed Jan 27, 2016 9:31 am

Cigarman wrote:Perhaps as a good friend he will give you some of your money back that he has taken when you leave. Let's not kid ourselves, advisers such as these KNOW that their ERs are high and have been trained in how to overcome this objection. You can't retire on the warm and fuzzy feeling of friendship.
Doubtful he will give some money back, but likely he will argue back that these funds are star recent performers that overcome their 2% expense disadvantage. Long term, that 2% will be huge. Short term, a 2% difference is swamped by the random noise in the market. Any high fee fund salesman is always going to offer up funds that have at least 5 to 10 years of decent performance and pay him a lot.

Checking into fund performance online is trivial for any novice investor to do. What advisor wants them calling him back the day after the sales pitch asking what sort of junk are you trying to sell me? This fund lags the index! However, it's equally trivial for Mr. FA to screen for a list of funds that have OK performance plus a big 12b1 fee and/or load. It helps too that the online performance graphs don't include any load.
Checkmate. :annoyed
JW
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goingup
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Re: Should I leave Ameriprise?

Post by goingup » Wed Jan 27, 2016 10:17 am

Yes you should get out of Ameriprise. The costs are easily 10X as much as they are at Vanguard or Fidelity.

Is this a taxable account? If so, take a look at your cost basis. It's possible you have losses and may not have capital gains when you sell. Or you could transfer-in-kind to another custodian.

As far as severing your relationship gracefully you can say you've decided you'd like to manage your account yourself. Contact your future custodian first, however, and get the ball rolling.

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Raymond
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Re: Should I leave Ameriprise?

Post by Raymond » Wed Jan 27, 2016 1:27 pm

Rob5TCP wrote:You stated he is also a good friend. If you leave, you will find out if he really is a friend or not...
I believe Taylor Larimore related the story of his Merrill Lynch "advisor" years ago who used to invite him and his wife on yachting trips.

When they moved their money to Vanguard, the invitations mysteriously stopped coming :greedy

OP, I will bet your advisor is your "friend" only because you pay him to be one.
"Ritter, Tod und Teufel"

pkcrafter
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Re: Should I leave Ameriprise?

Post by pkcrafter » Wed Jan 27, 2016 1:39 pm

No friend would ever put a friend in C class funds.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

dsmil
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Re: Should I leave Ameriprise?

Post by dsmil » Wed Jan 27, 2016 2:46 pm

Even I could tell that Ameriprise was slimy when I was in college. They invited me to a seminar and one of their salesmen was going to drive 2 hours to my hometown to sell financial products to my family friends. The whole situation was very weird.

mptfan
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Re: Should I leave Ameriprise?

Post by mptfan » Wed Jan 27, 2016 3:05 pm

paveldatsyuk44 wrote:1) Is dropping Ameriprise a "no-brainer"? I feel like it is, and I guess I just need reassurance...
Yes.

And to answer your second question, no, there is no reason for you to stay in your situation.

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BL
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Re: Should I leave Ameriprise?

Post by BL » Wed Jan 27, 2016 5:48 pm

pkcrafter wrote:No friend would ever put a friend in C class funds.

Paul
+1

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gravlax
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Re: Should I leave Ameriprise?

Post by gravlax » Wed Jan 27, 2016 5:55 pm

I only needed to read the title of your post to give my answer of "YES!".

I dropped them long ago and have been very happy with my decision. And just so you know, I did take the time to read the rest of your post.

Topic Author
paveldatsyuk44
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Re: Should I leave Ameriprise?

Post by paveldatsyuk44 » Sat Jan 07, 2017 4:53 pm

So I thought I would update you (those who may be interested) on the progress of moving my assets from Ameriprise > Vanguard (and TIAA). Specifically, how breaking the news to my Ameriprise advisor went and the whole process played out. Remember, this person is a good friend of mine which made me feel very awkward about the whole thing.

Summary in bullets:

- had lunch with my good friend (and advisor). Told him that I (my wife and I) "have decided to take a new approach, passive investing, and that we found great value in his work to date...but we feel we want to do it alone for now...happy with him as our advisor...but we no longer need a full-time advisor." My buddy was very cool with it, didn't ask too many questions. I asked him if I should expect any fees or penalties for moving things to Vanguard, to which he said "no." Asked if there were better ways to move things around, he said "no, just transfer and liquidate at Vanguard." He also said that I should not incur any account closure fees if i kept one account open over there (he said my life insurance policies should count.).

- two weeks later while transfers are in process, I notice $100-125 charges showing up on my Ameriprise statement. "Closing" and "Transfer" fees. Mind you, we have four "4" separate accounts over there, which after googling Ameriprise's brokerage fees and upon learning this I anticipate $900 in fees!!!!! BUT....I also see that Ameriprise is doing away with their account "closing" fees after the new year!

- in a near panic I emailed my buddy, informed him of this, told him about the new Closing fee policy. He calls me on the phone right away and seems unaware of the fees/charges, which baffled me, and tells me to cancel the transfers to avoid the closing fees. He also said that he does not have any more "credit" left from Ameriprise; which he uses as throwback to select clients, but he said he would refund my $500 annual relationship fee. Oye Vey! I was rather calm but direct, and told him that it is "insane that if you have $20 in a MM account, closing that account would cost $100." He responded "that is how all banks make their money, they all do it." Which I know is not true.

- So.....after all of the transfers go through, it looks like I will have paid $450 in transfer/closure fees (I was not able to cancel all of the transfers, I think he was able to recoup some, but it still isn't clear to me).

- For some reason I am now feeling guilty....and I know that he must feel bitter/resentful about giving me back his $500 fee (I texted him about a football game, and he didn't respond at all, very unlike him). Should I write him a check for the difference in fees ($50, or pay him for the transfer fees)?

I'm not really sure what to make of all this at this point. Friendships are more important than a couple hundred dollars. But at the same time I feel like I would be justified asking him to also credit me for the lousy backloaded/high ER funds he sold me over the past 4 years!, and shouldn't feel guilty about him refunding me his annual fee.

I just wanted to share this with y'all, given that I know Ameriprise stories are enthralling (and depressing) to some.

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goingup
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Re: Should I leave Ameriprise?

Post by goingup » Sat Jan 07, 2017 6:49 pm

Congratulations on making the change. I'm sorry you feel like your friendship is in jeopardy. You have no cause to apologize or refund him any money. It seems like he was charging you a token annual fee as well as getting fund kickbacks.

Those closing fees are ridiculous, btw. Should you ever leave Vanguard, Fidelity, T Rowe Price etc, you won't be charged anything to close your account.

If it were me, I'd just let time pass and see if the friendship remains. Taylor often tells the story of his good friend, the Merrill Lynch broker, who stopped extending invitations to go boating once Taylor moved his money to Vanguard. Hopefully your friendship will fare better.

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Re: Should I leave Ameriprise?

Post by brad.clarkston » Sat Jan 07, 2017 7:11 pm

$450.00 is a small price to get away from that situation. I'd call it a learning fee and move on.

fred9x
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Re: Should I leave Ameriprise?

Post by fred9x » Sat Jan 07, 2017 7:13 pm

Good for you!!! Sorry it's taking an emotional toll on you. As you say, it's your money and it's business.

kelvan80
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Re: Should I leave Ameriprise?

Post by kelvan80 » Sat Jan 07, 2017 7:14 pm

I believe Fidelity has a $50 fee for closing an account. I looked into moving to vanguard but then just decided to use the Spartan funds because of that fee.

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BL
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Re: Should I leave Ameriprise?

Post by BL » Sat Jan 07, 2017 7:17 pm

Sorry you had to ''divorce" you friend as that can be very painful. Sounds like you have completed the transfer (what about the insurance product?) so no need to feel bad or try to "fix" it. He made lots of 12b-1 fees off you, so don't even consider that you may owe him anything. He has to concentrate on those who are bringing in the income for him, not you. It is business, don't make it personal. Call it an expensive lesson, which would be still more expensive if you hadn't awakened. You are not alone.

sambb
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Re: Should I leave Ameriprise?

Post by sambb » Sat Jan 07, 2017 8:20 pm

you probably lost your friend, over saving some money. I think it is a good financial move for you, provided you dont need your friend's advice. But it sounds like your friendship is over.

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BL
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Re: Should I leave Ameriprise?

Post by BL » Sat Jan 07, 2017 9:54 pm

You may not be done until you study that insurance.

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KSOC
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Re: Should I leave Ameriprise?

Post by KSOC » Sun Jan 08, 2017 11:30 am

paveldatsyuk44 wrote:So I thought I would update you (those who may be interested) on the progress of moving my assets from Ameriprise > Vanguard (and TIAA). Specifically, how breaking the news to my Ameriprise advisor went and the whole process played out. Remember, this person is a good friend of mine which made me feel very awkward about the whole thing.

Summary in bullets:

- had lunch with my good friend (and advisor). Told him that I (my wife and I) "have decided to take a new approach, passive investing, and that we found great value in his work to date...but we feel we want to do it alone for now...happy with him as our advisor...but we no longer need a full-time advisor." My buddy was very cool with it, didn't ask too many questions. I asked him if I should expect any fees or penalties for moving things to Vanguard, to which he said "no." Asked if there were better ways to move things around, he said "no, just transfer and liquidate at Vanguard." He also said that I should not incur any account closure fees if i kept one account open over there (he said my life insurance policies should count.).

- two weeks later while transfers are in process, I notice $100-125 charges showing up on my Ameriprise statement. "Closing" and "Transfer" fees. Mind you, we have four "4" separate accounts over there, which after googling Ameriprise's brokerage fees and upon learning this I anticipate $900 in fees!!!!! BUT....I also see that Ameriprise is doing away with their account "closing" fees after the new year!

- in a near panic I emailed my buddy, informed him of this, told him about the new Closing fee policy. He calls me on the phone right away and seems unaware of the fees/charges, which baffled me, and tells me to cancel the transfers to avoid the closing fees. He also said that he does not have any more "credit" left from Ameriprise; which he uses as throwback to select clients, but he said he would refund my $500 annual relationship fee. Oye Vey! I was rather calm but direct, and told him that it is "insane that if you have $20 in a MM account, closing that account would cost $100." He responded "that is how all banks make their money, they all do it." Which I know is not true.

- So.....after all of the transfers go through, it looks like I will have paid $450 in transfer/closure fees (I was not able to cancel all of the transfers, I think he was able to recoup some, but it still isn't clear to me).

- For some reason I am now feeling guilty....and I know that he must feel bitter/resentful about giving me back his $500 fee (I texted him about a football game, and he didn't respond at all, very unlike him). Should I write him a check for the difference in fees ($50, or pay him for the transfer fees)?

I'm not really sure what to make of all this at this point. Friendships are more important than a couple hundred dollars. But at the same time I feel like I would be justified asking him to also credit me for the lousy backloaded/high ER funds he sold me over the past 4 years!, and shouldn't feel guilty about him refunding me his annual fee.

I just wanted to share this with y'all, given that I know Ameriprise stories are enthralling (and depressing) to some.
Thanks for updating. I came across this thread a bit back because I too have a similar situation with Ameriprise (IDS Financial). No friendships involved though. Decades ago (90's) wife & I rolled over a 401k & Employer IRA with IDS. We were more naive then we are now, but apparently we have IRA's with an annuity. The advisor is sharp on taxes but I'm sure we're getting ripped on fees. $6 each "Contract Charge" quarterly, plus ER's all over 1% (3 funds each). Since 2010 I figure the accounts have grown about 4.5%, not yet doubled. My account has a 4% interest when annuitized & the wifes 3%. It's not a large account, less than $100,000, but it feels wrong now, & I'm sure I could do much better if I had some control of it at Vanguard. But also seems like to much hassle to try to get out of it. Hate to give up the 3 & 4 percent down the road too.
Too soon old, too late smart.

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JaneyLH
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Re: Should I leave Ameriprise?

Post by JaneyLH » Sun Jan 08, 2017 11:40 am

I remarried 12 years ago and my husband had all his taxable investments with Ameriprise. He did nothing but lose money while they churned his portfolio and got fat on fees. Got him out of there and his portfolio has grown nicely ever since -- especially in the last few years since moving to a Vanguard index fund portfolio!

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sergeant
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Re: Should I leave Ameriprise?

Post by sergeant » Sun Jan 08, 2017 4:49 pm

Wait! You started getting out of Ameriscam a year ago and are still not out? Geez, just pull the trigger. They're horrible. You know after being a Boglehead for a year that you can do much better by yourself.
Lincoln 3 EOW! AA 40/60.

Dottie57
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Re: Should I leave Ameriprise?

Post by Dottie57 » Sun Jan 08, 2017 5:22 pm

paveldatsyuk44 wrote:Thank you, dearly, for the replies and information. I'm sure I will be studying every inch of .org.

My next problem to solve is figuring how to explain this to my friend without completely insulting him personally. Business is business though, and it's my money.

I'm not sure if this is worth considering at this point, but should I wait for the market to come up a bit before moving things? Some of the funds are higher risk, and have performed worse than the S&P over the past couple of weeks. Maybe they will slingshot up as the overall market improves?? I still have the urgency to get the heck out ASAP, though!!

I don't think your friend is much of a friend. He is picking your pocket.

kenner
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Re: Should I leave Ameriprise?

Post by kenner » Sun Jan 08, 2017 5:43 pm

If I were in your position, I would ask myself only one question: "What's more important, my family's future wealth or my Ameriprise advisor's future wealth?"

Many of us would find the answer to such a question to be quite obvious.

2 Tasty
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Re: Should I leave Ameriprise?

Post by 2 Tasty » Sun Jan 08, 2017 5:57 pm

I'm friendly with my boss because my salary depends on it. Not because we're friends.

LarryAllen
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Re: Should I leave Ameriprise?

Post by LarryAllen » Sun Jan 08, 2017 5:58 pm

Thanks for updating. Sorry to hear it didn't go totally smoothly for you. I am about to do a similar transfer from a true friend and it will be hard. I guess we'll see how much of a true friend he is.

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Portfolio7
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Re: Should I leave Ameriprise?

Post by Portfolio7 » Sun Jan 08, 2017 10:21 pm

As soon as I saw this thread I knew I had to respond. I would strongly suggest that you should.

We made the mistake of investing with Ameriprise 18 years ago or so (after tax). They are smooth... we didn't realize it, but we were put in a wrap account. The funds we were in were terrible funds from a performance standpoint, and had high fees to boot. It was like treading water (very different from our 401(k)s, I might add. They tried to sell us VUL insurance policies, which thankfully we turned down. Six years later when we moved, we were so fed up with the lack of performance in our Ameriprise accounts that we sold virtually all of it, and used it for a down payment on our house. We kept our cash from the sale of our old home elsewhere. We still had about $5K with Ameriprise, that I never bothered to move. The $5K never really grew at all either, while everything else I had grew substantially.

This past July I finally closed the Ameriprise account and moved the $5K to Fidelity (because my 401k is there also), where it's already grown. I threw a little party the day I left.
"An investment in knowledge pays the best interest" - Benjamin Franklin

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White Coat Investor
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Re: Should I leave Ameriprise?

Post by White Coat Investor » Sun Jan 08, 2017 10:45 pm

paveldatsyuk44 wrote:Hello All. I am very new to this board and have begun taking more of an active role in my retirement/investments (by active I mean making sure my wife and I are doing the right things with our money).

I am considering moving my investments from Ameriprise to Vanguard (or some other three fund portfolio). I pay my financial planner (who also happens to be a good friend) a "$500" annual fee and it appears that most of his recommended funds' expense ratios are too high for my liking, notwithstanding the selected funds seem to benefit Ameriprise on the backend. The financial planner has been very helpful with budgeting, but I'm leery about the choices and method of investing. I am motivated and confident that I could oversee my own investments and consult with a fee for service advisor as-needed.

My specific questions are the following.

1) Is dropping Ameriprise a "no-brainer"? I feel like it is, and I guess I just need reassurance...
2) Any reasons to stay in my situation?
3) What do you think of the funds he has us in?

Ivy Large Cap Growth... WLGCX
JPMorgan Value Advantage... JVACX
Eagle Small Cap Growth... HSCCX
Fidelity Advisor® New... FNICX
Eventide Gilead Class C ETCGX

For context, my current situation:
me: 34
wife: 34
kid: 1year old
income: approximately $200k/yr
mortgage: $348k, home value $475k
retirement age goal: 65

work retirement 401b plan: $60k (restricted to Nationwide offered funds, employer matches 10% of salary)
roth IRAs: $78k
I have yet to see an Ameriprise client who had what I would call a good portfolio.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

normaldude
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Re: Should I leave Ameriprise?

Post by normaldude » Sun Jan 08, 2017 10:55 pm

JW-Retired wrote:
paveldatsyuk44 wrote:
...I am considering moving my investments from Ameriprise to Vanguard (or some other three fund portfolio). I pay my financial planner (who also happens to be a good friend) a "$500" annual fee...

...

3) What do you think of the funds he has us in?

Ivy Large Cap Growth WLGCX ER=1.86%, 12b1 kickback fee 1% no load
JPMorgan Value Advantage JVACX ER=1.75%, 12b1 kickback fee 1% deferred sales load 1%
Eagle Small Cap Growth HSCCX ER=1.86%, 12b1 kickback fee 1% deferred sales load 1%
Fidelity Advisor® New FNICX ER=1.67%, 12b1 kickback fee 1% deferred sales load 1%
Eventide Gilead Class C ETCGX ER=2.18%, 12b1 kickback fee 1% no load
I think these funds are a laughably good example of a terrible group of funds. A reasonable ER is less than 1/10th of this and can be had at Vanguard/Fidelity/Schwab without any loads or 12b1 fees at all. (The 12b-1 fee is the amount of the ER that is paid to the salesman of the fund annually.)

You can and should Google the trading symbols to look up this data for yourself.

Welcome to the forum!
JW
paveldatsyuk44 is getting scammed by his "good friend".

The Ameriprise financial planner only charges a $500 annual fee, but he really makes his money on commission, by putting paveldatsyuk44 into outrageously high expense ratio funds.

This is not a "good friend". This is a good slick talking scamming salesman, who can trick suckers into thinking he's their good friend. Sort of the like most of the scam artists profiled on CNBC "American Greed".

docbrown
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Re: Should I leave Ameriprise?

Post by docbrown » Sun Jan 08, 2017 11:10 pm

paveldatsyuk44 wrote:I'm not really sure what to make of all this at this point. Friendships are more important than a couple hundred dollars. But at the same time I feel like I would be justified asking him to also credit me for the lousy backloaded/high ER funds he sold me over the past 4 years!, and shouldn't feel guilty about him refunding me his annual fee.
I agree that good friendships are more important than money, and it would be a tragedy to end a friendship over a few hundred dollars. But you shouldn't feel guilty about it. He should, for using you. If he's introspective at all, maybe someday these lost friendships will be a lesson to him. Keep the refunded annual fee, and give him the gift of learning the value of friendships and money the hard way.
Roth was a Senator, not an acronym. Please, stop writing it in all caps.

sco
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Re: Should I leave Ameriprise?

Post by sco » Mon Jan 09, 2017 3:02 pm

Hang around this forum long enough, and you too can answer questions just using the title of a new thread.

YES!

raysfan12
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Re: Should I leave Ameriprise?

Post by raysfan12 » Mon Jan 09, 2017 5:59 pm

Congrats on separating away from Ameriprise.

I was almost sucked in to Ameriprise about 8 years ago (2 years after starting my career). A coworker arranged a free sales-pitch lunch from an advisor for a few of us. I didn't initially bite, but a few months later I scheduled a meeting. I had always been really careful with my money and a good saver, but thought I would hear them out. They were convincing and did actually provide some good information (or I thought at the time), but I could tell something wasn't right. To even get started required a large up front fee that I was unwilling to give them. Plus I did some research on the VUL insurance they were recommending for me... It took me about 6 more years until I discovered Bogleheads, but luckily I wasn't very far off track. Now I realize how close I was to making a big mistake.

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