Moved on from a FA. Do I respond?

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KMB
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Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 5:34 pm

Hello All

I recently moved to self-directing my profit-sharing/401K account (today, actually). I sent the following short (polite IMHO) email to my advisor:

"Dear XXXX
My wife and I continue to consolidate and simplify our overall financial plan. part of this will now involve brining my profit sharing plan's investment direction in line with the rest of our asset allocation and cut associated costs. I have therefore authorized a De-link for you access at Schwab. Please do not make any further changes within or to the accounts, effective immediately. Thank you for all your help up until now. Sincerely, XXXX and XXXX."

He sent this in response:
"XXXX-Change direction-I never had a chance. You were up 29% last year 2017 vs 19% for the market. You are up 11% this year vs 1% for the market. No one has a better track record or platform and scope of services than we do-see Attachment. I could have done a lot more for you if you had ever given me a few minutes. I would have appreciated at least a brief discussion to have given you a better understanding of our capabilities. Either way I wish you all the best. Happy to chat or meet anytime. Thanks, XXXX."

Is it common courtesy to respond? Or simply move on? For background, this is an FA that only managed my profit sharing for roughly 1% AUM. I spoke with him by email perhaps once every 2-3 years and met him once 8 year ago when I signed up. The rest of my wife's old accounts and our new taxable stuff I have been managing.

Thanks in advance
KMB

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White Coat Investor
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Re: Moved on from a FA. Do I respond?

Post by White Coat Investor » Thu Dec 06, 2018 5:36 pm

Move on. Don't respond.

An appropriate response would have been. "I appreciate the opportunity to serve you the last few years. If you change your mind, I'll be here ready to help. Best of luck with your investments."
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

jacoavlu
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Re: Moved on from a FA. Do I respond?

Post by jacoavlu » Thu Dec 06, 2018 5:38 pm

Do/did you have a contract with the FA? If so what does it say with regards to separation? How and how often was the FA paid? Are you certain that you don't owe them any money per the terms of a contract?

KMB
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Re: Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 5:51 pm

jacoavlu wrote:
Thu Dec 06, 2018 5:38 pm
Do/did you have a contract with the FA? If so what does it say with regards to separation? How and how often was the FA paid? Are you certain that you don't owe them any money per the terms of a contract?
This is a great question. I had found my original contract with his old firm (it seems they were absorbed/bought by a new entity-which I never remember being notified about) and it stated that contract can be terminated by either party with 30 days written notice. But, it also says it cannot be assigned without written agreement. I have no documentation or recollection that I re-signed with the new "entity."

So I understand that I would, per the contract, be charged that roughly 1% for the next 30 days, which is understandable and possibly my legal obligation. There were quarterly fees deducted from my Schwab account for Advisor Fees.

Thanks for input.
KMB

MikeG62
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Re: Moved on from a FA. Do I respond?

Post by MikeG62 » Thu Dec 06, 2018 6:13 pm

White Coat Investor wrote:
Thu Dec 06, 2018 5:36 pm
Move on. Don't respond.
^This
Real Knowledge Comes Only From Experience

radiowave
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Re: Moved on from a FA. Do I respond?

Post by radiowave » Thu Dec 06, 2018 6:17 pm

Yes, move on, don't respond. You will reap the benefits of severing the relationship at least by 1%. Have you looked closely at the funds he put you in? What were the expense ratios, were there any front end loads (sunk costs) or back end loads (you'll pay when you liquidate those funds)?
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MotoTrojan
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Re: Moved on from a FA. Do I respond?

Post by MotoTrojan » Thu Dec 06, 2018 6:18 pm

I am curious what 401k options they had you in that netted 11% this year. Otherwise I don’t think it matters, maybe a short concise thanks but no thanks happy holidays note.

KMB
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Re: Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 6:30 pm

MotoTrojan wrote:
Thu Dec 06, 2018 6:18 pm
I am curious what 401k options they had you in that netted 11% this year. Otherwise I don’t think it matters, maybe a short concise thanks but no thanks happy holidays note.
It was a complex portfolio that churned stocks very frequently. No funds. I have 41 stocks currently in that account, some of companies I recognize, most I do not.

KMB

KMB
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Re: Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 6:31 pm

radiowave wrote:
Thu Dec 06, 2018 6:17 pm
Yes, move on, don't respond. You will reap the benefits of severing the relationship at least by 1%. Have you looked closely at the funds he put you in? What were the expense ratios, were there any front end loads (sunk costs) or back end loads (you'll pay when you liquidate those funds)?
Various stocks, no funds. There was always a lot of activity in this account!

staythecourse
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Re: Moved on from a FA. Do I respond?

Post by staythecourse » Thu Dec 06, 2018 6:38 pm

What is the problem with his email? Seems reasonable to me. Heck, I am impressed he got you 11% returns considering everything seems flat to negative this year. Seems like a reasonable email to your email.

Best not to respond as there is no point and NOT because he wrote anything wrong.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

MotoTrojan
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Re: Moved on from a FA. Do I respond?

Post by MotoTrojan » Thu Dec 06, 2018 7:02 pm

KMB wrote:
Thu Dec 06, 2018 6:30 pm
MotoTrojan wrote:
Thu Dec 06, 2018 6:18 pm
I am curious what 401k options they had you in that netted 11% this year. Otherwise I don’t think it matters, maybe a short concise thanks but no thanks happy holidays note.
It was a complex portfolio that churned stocks very frequently. No funds. I have 41 stocks currently in that account, some of companies I recognize, most I do not.

KMB
Impressive but your reasoning to leave is sound.

KMB
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Location: Chicago-ish, IL

Re: Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 7:11 pm

staythecourse wrote:
Thu Dec 06, 2018 6:38 pm
What is the problem with his email? Seems reasonable to me. Heck, I am impressed he got you 11% returns considering everything seems flat to negative this year. Seems like a reasonable email to your email.

Best not to respond as there is no point and NOT because he wrote anything wrong.

Good luck.
Ok, thanks and I do agree. I wasn’t insulted by his email just wanted some advice as to proper etiquette etc.

l1am
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Re: Moved on from a FA. Do I respond?

Post by l1am » Thu Dec 06, 2018 7:16 pm

How was his performance for the past 8 years vs the market? I noticed he only mentioned this year and last.

KMB
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Re: Moved on from a FA. Do I respond?

Post by KMB » Thu Dec 06, 2018 7:21 pm

l1am wrote:
Thu Dec 06, 2018 7:16 pm
How was his performance for the past 8 years vs the market? I noticed he only mentioned this year and last.
I have to admit that I have no idea. I never received any of this data (nor asked for it). I am confused myself as I look back over the account-how do you calculate return and adjust for the new monies that are out in every year?

KMB

l1am
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Re: Moved on from a FA. Do I respond?

Post by l1am » Thu Dec 06, 2018 7:35 pm

KMB wrote:
Thu Dec 06, 2018 7:21 pm
I have to admit that I have no idea. I never received any of this data (nor asked for it). I am confused myself as I look back over the account-how do you calculate return and adjust for the new monies that are out in every year?

KMB
I'm not sure, most of the online calculators will support a monthly/annual addition and spit out the returns. But that would be an approximation. I'd have to build a more complicated program/spreadsheet to include additions and withdrawals on specific dates.

I guess that's how the expensive FA's get away with it :wink:

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nedsaid
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Re: Moved on from a FA. Do I respond?

Post by nedsaid » Thu Dec 06, 2018 9:23 pm

KMB wrote:
Thu Dec 06, 2018 6:30 pm
MotoTrojan wrote:
Thu Dec 06, 2018 6:18 pm
I am curious what 401k options they had you in that netted 11% this year. Otherwise I don’t think it matters, maybe a short concise thanks but no thanks happy holidays note.
It was a complex portfolio that churned stocks very frequently. No funds. I have 41 stocks currently in that account, some of companies I recognize, most I do not.

KMB
Wow. Hauling all those annual reports to the recycle bin must just kill your back. :wink:

I do the individual stock thing, I have stocks in a brokerage IRA and in DRIP plans. 22 in all. That is a lot to follow. But they are maybe 12%-13% of my portfolio. I can't imagine 41. By the way, I have just about matched the US Total Stock Market Index. Had fun but all that work didn't result in beating the market. I think you will be happier with the index funds.
A fool and his money are good for business.

retire2022
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Re: Moved on from a FA. Do I respond?

Post by retire2022 » Thu Dec 06, 2018 10:23 pm

KMB wrote:
Thu Dec 06, 2018 7:21 pm
l1am wrote:
Thu Dec 06, 2018 7:16 pm
How was his performance for the past 8 years vs the market? I noticed he only mentioned this year and last.
I have to admit that I have no idea. I never received any of this data (nor asked for it). I am confused myself as I look back over the account-how do you calculate return and adjust for the new monies that are out in every year?

KMB
KMB if you have the time to input the data points on Morningstar Portfolio Manager you could have an idea of the last 8 years. Do you have all 8 years of statements? You could easily do forensic analysis if you have the statements, at least download the numbers before closing account, good luck.

Arby
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Re: Moved on from a FA. Do I respond?

Post by Arby » Fri Dec 07, 2018 1:09 am

staythecourse wrote:
Thu Dec 06, 2018 6:38 pm
What is the problem with his email?
IMHO, the tone of the FA's email was all wrong.

Ask not what your client can do for you but what you can do for your client.

As to the OP's question.....no response necessary.
if you had ever given me a few minutes. I would have appreciated at least a brief discussion/quote]

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