Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

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sjhruby
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Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

My grandfather has been with Morgan Stanley for 30+ years; the advisor he worked with for most of that time retired a few years ago and he was grandfathered into a new group. Over the past few years, I became more involved in assisting him with his finances and realized that his new set of advisors at Morgan Stanley clearly weren't out for his best interests. Clearly, they were salesmen with little financial acumen. I've helped him question many of their recommendations, to which they've struggled to respond.

Despite attempting to convince my grandfather there are other cheaper, better options than using Morgan Stanley, he is comfortable with the firm and does not want to leave. The new advisor group originally had him enter a 1%+ fee arrangement where they were actively trading in his portfolio within certain "models", but he didn't like this structure so about a year ago we switched out of the 1%+ fee arrangement and into a portfolio strategy primarily of A-class American Funds, with the goal of keeping things simple and straightforward. Recently, we've asked them to help put together a high-level portfolio plan to outline the directives of the portfolio going forward to help them better understand my grandfather's goals and ensure recommendations that they made going forward were consistent with it.

Yesterday, my grandfather received a call from his financial advisor's boss indicating that they do not wish to have him as a client anymore and would like to terminate the relationship, saying "they are not the best fit for his financial needs." I'm shocked they want to simply throw away a $3m+ account.

Has anyone ever heard of getting "fired" by your financial advisor? My initial reaction is that it must not be worth their time anymore given they won't be able to take advantage of him as they once did with me looking over his shoulder. Quite frankly, I don't think this current team he is with now is even capable of putting together a high-level portfolio plan for him. How would you suggest my grandfather move forward with his investing? He doesn't need an advisor but likes to have someone to call and is comfortable with a large institution like Morgan Stanley. If he wants to stay with MS, is it even possible to switch to a different team/group now after getting "fired" (i.e. I'd like to find a CFA/CFP who is less of a pure salesman to help guide him)?
Last edited by sjhruby on Fri Aug 28, 2020 10:15 am, edited 1 time in total.
lakpr
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by lakpr »

Vanguard Personal Advisory Services for 0.3%, which is a huge improvement over the 1%+ being charged by Morgan Stanley.
Initiate a transfer-in-kind from MS to Vanguard.

Don't even think about staying with MS anymore, that advice would have been the same even before the "fired" part.
livesoft
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by livesoft »

Yes, I have heard of advisors firing clients who don't make them as much money as more profitable clients.

Time to move on, but that's a good thing. If I read between the lines correctly, your grandfather's portfolio really needs no changes, no monitoring, no nothing, but your grandfather still wants to chat with a person now and then. There are many small advisory firms that will take his money and chat with him. Will they reduce his costs or help him with investing? Who knows? They could be worse or better than his current situation.

The Vanguard PAS system will not be good for him. They would likely make him sell all his American funds and buy Vanguard funds. That would not be a problem if all these were in tax-advantaged accounts. OTOH, they will not want to spend much time talking on the phone and do not have any physical in-person office meetings.

Added: I want to highlight that GmanJeff writes otherwise below: viewtopic.php?p=5460956#p5460956
Last edited by livesoft on Fri Aug 28, 2020 10:14 am, edited 1 time in total.
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TomatoTomahto
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by TomatoTomahto »

In a pinch, you could chat with your grandfather.
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GmanJeff
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by GmanJeff »

livesoft wrote: Fri Aug 28, 2020 9:14 am
The Vanguard PAS system will not be good for him. They would likely make him sell all his American funds and buy Vanguard funds. That would not be a problem if all these were in tax-advantaged accounts. OTOH, they will not want to spend much time talking on the phone and do not have any physical in-person office meetings.
Much of this is incorrect. PAS will continue to hold most types of investments brought to them by a client if adverse tax consequences of selling them exceed the benefits of selling and moving into a portfolio of Vanguard index funds. If the client requests, PAS will TLH from those investments when opportunities arise, and will direct the proceeds to Vanguard index funds. Cash and investments without significant tax issues will be moved into (typically) between 2 and 8 Vanguard index funds, depending on the client's objectives, timelines, and risk tolerance. PAS will speak with clients as often as desired. Clients access their advisors' calendars on-line and schedule telephone or video interactions whenever desired. If the client does not initiate meetings more frequently, PAS will reach out for quarterly check-ups to inquire into any changes in client circumstances which might merit portfolio changes and, if conditions merit, to discuss portfolio rebalancing.

It is true that PAS has no physical in-person office meetings, if that matters to you or to your grandfather.
Last edited by GmanJeff on Fri Aug 28, 2020 10:11 am, edited 2 times in total.
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nedsaid
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by nedsaid »

There is lots of competition out there clients like your grandfather. Since there is nothing to lose, I would draft a letter and send to the top management of Morgan Stanley and let them know how your Grandfather was treated. Not that it will do any good, but company management needs pushback in situations like this. I would make sure that the advisor's boss and the person above that would get a letter too. Lots of folks who would love him as a client, just start looking.

There is a balance here, as a client one doesn't want to be more trouble than they are worth. There are nervous folks who want to call their advisor every time the market wiggles a bit, that can be exasperating. Doesn't sound like your Grandfather is like that at all, he just likes to "call his money" and I do too. My own unwritten rule is that I limit the call to the advisor to once a month and I try to be respectful of his time. I deal with a couple of other firms, Fidelity I might call a couple times a year and the other firm I might call quarterly. I think someone with a $3 million account deserves some attention.

I agree with dbr below. Understand that there is a business model involved here and the firm needs to generate a certain amount of income from clients in order to be profitable. As much as I have written about Assets Under Management arrangements, the costs can really add up over time, if one wants a certain level of attention, you will have to pay for it. If he wants to work with somebody on an ongoing basis, hard to imagine that you could get an Assets Under Management for under 0.75%. The best way is to pay for advice by the hour, much more cost effective, if you go that route, you are looking at $150 to $400 an hour. Personally, I am test driving an advisory service with part of my retirement where my all-in costs are 0.90% a year including the costs of the underlying investments. So far ongoing retirement projections and some advice are included, for a small fish like me that is probably about as good as I could get. There are robot advisory services that are cheaper, my sense is that Grandfather wants to an ongoing relationship with the same advisor.

It might be that he is just a small fish in a big pond and perhaps with this group, $3 million might be a smaller account. My guess is that they didn't like your perceived interference, you didn't do anything wrong, just looking after Grandfather. You were insisting upon what any client should want from his advisor and the folks at Morgan Stanley didn't want to make the effort. Time to move on. As the good book says, shake the dust off of your feet. Maybe go to a smaller firm?

I agree with Livesoft, Vanguard probably wouldn't give him the type of attention that he wants. I have heard great things about Charles Schwab. I deal with Fidelity, don't have much reason to talk to them very often but my interactions with them have been positive. I even took them up on meeting with one of their advisors for an hour and it was a good experience. Problem with big firms is that people move around. You could try an independent advisor, they all have a firm they work with that provides a brokerage platform and such things as compliance and back office support.

Firms like Ameriprise and Edward Jones would be off my list. Not that they don't have some good people, you want somebody truly independent and not beholden to a sales manager. Probably the "full-service" big brokerages would be off the list too. You could try a big discount broker, Schwab offers advice and an advisory relationship. You could try Fidelity. Sounds like Grandfather would be happiest with a local and independent advisor and there are some around, this way he would get a longer term relationship with the same person. I think he wants some attention.
Last edited by nedsaid on Fri Aug 28, 2020 9:59 am, edited 2 times in total.
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dbr
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by dbr »

sjhruby wrote: Fri Aug 28, 2020 9:02 am As such, with the advisor, we switched out of the 1%+ fee arrangement and into a portfolio strategy primarily of A-class American Funds, with the goal of keeping things simple and straightforward. Recently, we've asked them to help put together a high-level portfolio plan to outline the directives of the portfolio going forward to help them better understand my grandfather's goals and ensure recommendations that they made going forward were consistent with it.
You want them to work for you but you don't want to pay them. To them this looks like a relationship they don't want. Why would they?

But they are doing you and your grandfather a favor. There are alternatives. Normally I don't make recommendations and this is not a recommendation but a piece of information. This resource may be a model for a possible solution to the problem. I don't know how many others like this you can find:
https://rickferri.com/ As I say, this is not a specific recommendation and I have no connection to Rick Ferri one way or another.

VPAS is another obvious choice, but I think if it is just a question of wanting to talk things over with someone from time to time, you can do that job for your grandfather as well as anyone. Expecting money making companies to be available for that sort of service means paying more for it than a person should be paying and it means being subject to buying what they want to sell.
Mr.BB
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Mr.BB »

They want to make as much money with his little work as possible. Your plan would make them do more work and also explain their decisions.
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pedalman701
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by pedalman701 »

I can only wish that our "advisor" would have fired us years ago.

OP, this is indeed a blessing in disguise.
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sjhruby
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

Thanks for the responses. To clarify, he wasn't paying the 1%+ to MS over the past year (he exited that fee structure relationship), given the shift to mutual funds with sales charges (primarily A-Class Shares....although we tried to lower front end load by meeting certain investment $ thresholds). My understanding is MS still gets compensated a cut of the expense ratio from American Funds, so not like they were working for free. They also were trying to charge him 1-1.5% commission on stock sales.

Correct - he needs minimal monitoring and is not high touch. A quarterly call would be great for him, but these MS advisors struggled to even do that.

He would be fine with phone calls (he can't drive anyways) but values a relationship so talking to a different person each time would be less than ideal.

I like the 'sending a letter' idea a lot - definitely going to do that to let the higher-ups know of the situation.
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nedsaid
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by nedsaid »

sjhruby wrote: Fri Aug 28, 2020 10:13 am Thanks for the responses. To clarify, he wasn't paying the 1%+ to MS over the past year (he exited that fee structure relationship), given the shift to mutual funds with sales charges (primarily A-Class Shares....although we tried to lower front end load by meeting certain investment $ thresholds). My understanding is MS still gets compensated a cut of the expense ratio from American Funds, so not like they were working for free. They also were trying to charge him 1-1.5% commission on stock sales.

Correct - he needs minimal monitoring and is not high touch. A quarterly call would be great for him, but these MS advisors struggled to even do that.

He would be fine with phone calls (he can't drive anyways) but values a relationship so talking to a different person each time would be less than ideal.

I like the 'sending a letter' idea a lot - definitely going to do that to let the higher-ups know of the situation.
Why not check out Charles Schwab? They might just be the right fit.
A fool and his money are good for business.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by whodidntante »

Are they acting as a financial advisor or an investment advisor?
student
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by student »

You should send a thank you note to MS. Now move to Merrill Edge or Schwab for a big transfer bonus.
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sjhruby
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

whodidntante wrote: Fri Aug 28, 2020 10:23 am Are they acting as a financial advisor or an investment advisor?
They were brokers, so financial advisors. Definitely not fiduciaries as I would think an investment advisor would be.
GMT-8
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by GMT-8 »

A very close friend who was a prominent investment advisor in our community gave me this good advice when we were shopping for a new car:

You can't tell another man how to run his business. You can only tell yourself how to run your own business.
So take your business to someone who agrees with you rather than wasting your time trying to change the guy who has other things on his mind.

And yes, he has fired a number of his clients. As have other friends with jewelry stores, plumbing businesses, etc.

The grass is going to be greener for your granddad elsewhere where thrifty old curmudgeons are welcomed not despised.

Vanguard PAS might fit the bill - when I investigated it there was one person who made the the proposal and would have been responsible for managing my funds which were in the same range of $$ as your Granddad.

GMT

PS - Bogleheads seem to welcome thrifty old curmudgeons
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by retired@50 »

sjhruby wrote: Fri Aug 28, 2020 10:29 am
whodidntante wrote: Fri Aug 28, 2020 10:23 am Are they acting as a financial advisor or an investment advisor?
They were brokers, so financial advisors. Definitely not fiduciaries as I would think an investment advisor would be.
This is part of the trouble. So many different titles for advisers. He was either dealing with a fiduciary or he was dealing with someone who operates under the suitability standard, which means that an investment is simply suitable for a client, without necessarily being in the clients best interest.

Probably the latter standard, and in my opinion, you're well rid of Morgan Stanley. I'd either use Vanguard Personal Advisory Service or go it alone at Vanguard with low-expense ratio, broadly diversified total market index funds. $3 million doesn't require any exotic strategies.

Regards,
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deltaneutral83
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by deltaneutral83 »

Time is money. If you got rid of the 1% arrangement for your GF and then moved him into "A" share funds MS either got the front end load or din't if retirement account(s) and now they only get 25 bps on the AF's in 12-b1 fees. 25 bps on $3M is $7,500 and I'm guessing they have had to spend quite a few hours dealing with you and it's simply not worth their time and they can move onto trying to get clients to accept their 1% AUM arrangement IN ADDITION to loads, churning, etc. etc. Just my guess.

The most famous fee only guys in the business I believe are $400 an hour and they command that for a host of market reasons. 3/6 hours a year looks pretty cheap even next to 25 bps of 12b-1 fees on $3M which isn't even worth the big boys time s you have found out.
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nedsaid
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by nedsaid »

sjhruby wrote: Fri Aug 28, 2020 10:29 am
whodidntante wrote: Fri Aug 28, 2020 10:23 am Are they acting as a financial advisor or an investment advisor?
They were brokers, so financial advisors. Definitely not fiduciaries as I would think an investment advisor would be.
That is another thing that I forgot to mention, you want somebody that is a fiduciary.
A fool and his money are good for business.
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galawdawg
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by galawdawg »

Why not suggest that your grandfather consider moving his portfolio to a low-cost DIY brokerage, such as Fidelity, Schwab or Vanguard. You can also suggest he hire a fee-only financial advisor who is a true fiduciary for a quarterly, semi-annual or annual "checkup" for that personal touch.

Based upon his circumstances and the advice he receives from the financial advisor, he could keep his current funds (if they can be held in one of those firms), invest in a two or three fund portfolio or index target date fund, or even perhaps the highly regarded Wellington (VWELX) or Wellesley (VWINX) funds.

If your grandfather is interested, you can also introduce him to Bogleheads. He'd be welcome here!
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by dknightd »

sjhruby wrote: Fri Aug 28, 2020 9:02 am Yesterday, my grandfather received a call from his financial advisor's boss indicating that they do not wish to have him as a client anymore and would like to terminate the relationship, saying "they are not the best fit for his financial needs." I'm shocked they want to simply throw away a $3m+ account.
That is shocking! Are they saying they do not want to advise him any more, or that they want him to take his money some place else? Did they suggest an alternative arrangement for handling his account? Or a better place for his money?
sjhruby wrote: Fri Aug 28, 2020 9:02 amHas anyone ever heard of getting "fired" by your financial advisor? My initial reaction is that it must not be worth their time anymore given they won't be able to take advantage of him as they once did with me looking over his shoulder. Quite frankly, I don't think this current team he is with now is even capable of putting together a high-level portfolio plan for him. How would you suggest my grandfather move forward with his investing? He doesn't need an advisor but likes to have someone to call and is comfortable with a large institution like Morgan Stanley. If he wants to stay with MS, is it even possible to switch to a different team/group now after getting "fired" (i.e. I'd like to find a CFA/CFP who is less of a pure salesman to help guide him)?
OK, I'm reading between the lines here. They are not firing him, they are firing you ;) I suspect they do not like having to deal with two people - one who has the money, and another who has their own idea of how the money should be allocated. No matter what you do I suggest you act as a fiduciary. And suggest your grandfather look for the same. In case you have not recognized it yet, there is a potential conflict of interest here.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by NotWhoYouThink »

I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by JBTX »

sjhruby wrote: Fri Aug 28, 2020 10:13 am Thanks for the responses. To clarify, he wasn't paying the 1%+ to MS over the past year (he exited that fee structure relationship), given the shift to mutual funds with sales charges (primarily A-Class Shares....although we tried to lower front end load by meeting certain investment $ thresholds). My understanding is MS still gets compensated a cut of the expense ratio from American Funds, so not like they were working for free. They also were trying to charge him 1-1.5% commission on stock sales.

Correct - he needs minimal monitoring and is not high touch. A quarterly call would be great for him, but these MS advisors struggled to even do that.

He would be fine with phone calls (he can't drive anyways) but values a relationship so talking to a different person each time would be less than ideal.

I like the 'sending a letter' idea a lot - definitely going to do that to let the higher-ups know of the situation.
https://www.morningstar.com/funds/xnas/agthx/quote

If he has bought A Class shares and is now going to hold them, then the fees for MS are little to nothing. Not shocking that they were happy to sell them and get the up front load but now don't see any profit for them.

Agree, probably a blessing in disguise. Any advisor that would dump you like that really shows they are in it for the fees.

However, I don't know your family dynamic. If he likes MS, it may have been better to let him be and pay his fees, and just keep an eye that they aren't doing something radically inappropriate. It is his money, and he has plenty.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by JBTX »

NotWhoYouThink wrote: Fri Aug 28, 2020 11:44 am I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
This. This. This.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by TallBoy29er »

I wish Morgan Stanley would fire my mom. But no such luck yet.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by dbr »

JBTX wrote: Fri Aug 28, 2020 11:48 am
NotWhoYouThink wrote: Fri Aug 28, 2020 11:44 am I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
This. This. This.
Yes, very well said.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Toons »

TomatoTomahto wrote: Fri Aug 28, 2020 9:16 am In a pinch, you could chat with your grandfather.
:sharebeer

Perfect :mrgreen:
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sjhruby
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

NotWhoYouThink wrote: Fri Aug 28, 2020 11:44 am I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
Agreed, they've acknowledged to my grandfather that "I was the issue." He is willing to pay for some degree of relationship but trusts me. His "relationship" at MS was with the individual at MS who retired a few years ago, not this new group who he was grandfathered into - he never loved them to begin with. As a CFA, he trusts my advice. At the same time, I'd prefer a 3rd party to provide oversight to his account - I don't desire oversight. He respects my opinion but is capable of making his own ultimate decision. I recommend to him how I would handle certain situations, to which he provides feedback and may or may not modify when in contact with his advisor. If he partnered with an advisor that I trusted much more, I would be more hands-off - I wouldn't feel the need to be as involved to ensure he isn't taken advantage of.

He certainly isn't the type to talk about his finances with others, so having a name brand or respected firm to tout has nothing to do with it.
dbr
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by dbr »

sjhruby wrote: Fri Aug 28, 2020 12:36 pm As a CFA, he trusts my advice. At the same time, I'd prefer a 3rd party to provide oversight to his account
If you are a CFA you must surely be acquainted with colleagues in or out of a major firm who would be appropriate for this job.
JBTX
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by JBTX »

sjhruby wrote: Fri Aug 28, 2020 12:36 pm
NotWhoYouThink wrote: Fri Aug 28, 2020 11:44 am I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
Agreed, they've acknowledged to my grandfather that "I was the issue." He is willing to pay for some degree of relationship but trusts me. His "relationship" at MS was with the individual at MS who retired a few years ago, not this new group who he was grandfathered into - he never loved them to begin with. As a CFA, he trusts my advice. At the same time, I'd prefer a 3rd party to provide oversight to his account - I don't desire oversight. He respects my opinion but is capable of making his own ultimate decision. I recommend to him how I would handle certain situations, to which he provides feedback and may or may not modify when in contact with his advisor. If he partnered with an advisor that I trusted much more, I would be more hands-off - I wouldn't feel the need to be as involved to ensure he isn't taken advantage of.

He certainly isn't the type to talk about his finances with others, so having a name brand or respected firm to tout has nothing to do with it.

It is pretty clear what you want, which by itself is very reasonable. It isn't terribly clear what he wants, which is what is most relevant.
illumination
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by illumination »

I'm honestly amazed they would fire a client with a $3 million account with a 30 year relationship unless there was some major personal issues in dealing with him or he was constantly eating up their time. Even if he wasn't buying what they were selling, it's still a good amount if fees to just have it under their management.

Something like Vanguard's PAS would probably work in its place if he absolutely needs some 3rd party.
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Doom&Gloom
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Doom&Gloom »

dbr wrote: Fri Aug 28, 2020 12:28 pm
JBTX wrote: Fri Aug 28, 2020 11:48 am
NotWhoYouThink wrote: Fri Aug 28, 2020 11:44 am I agree that they are firing you more than your grandfather, and can't blame them at all. Their business model is to make a certain amount of money in fees and commissions per million invested, and you are not allowing that. It makes their metrics look bad. And it decreases their revenue in a way that makes it unprofitable to deal with you. Your grandfather has $3M, he doesn't need charity.

You should work with your grandfather to figure out what HE wants. If he wants the comfort and prestige of having an advisor that is the same person every time, that knows him and can meet with him in person, and who is NOT YOU, then he is going to have to pay for that and you are going to have to back off and let him.

I sense that you want his account to be managed by you but with a big firm as a custodian. That's a great arrangement, but is it the one he wants? Does he want to talk to his friends and neighbors about the conversation he had with "his guy" at Big Name Financial Firm when a major event like a pandemic occurs? If so, he'll need to pay for that.

If he was happy with them before and would be happy to let them charge him to manage his money, and their management of his money won't financially ruin him, then your job is to apologize for interfering and back off.

While I probably manage my investments in a manner similar to what you are trying to do for your grandfather, I don't force my family members to do the same, or destroy 30 year business relationships to prove I am right.
This. This. This.
Yes, very well said.
Add me to this chorus. And I would add to NotWhoYouThink's final few words, no proof will be evident in the short run (even if gramps is comparatively young) so that would be an effort in futility anyway.
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sjhruby
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

JBTX wrote: Fri Aug 28, 2020 12:56 pm It is pretty clear what you want, which by itself is very reasonable. It isn't terribly clear what he wants, which is what is most relevant.
This is fair. Definitely need to sit down with him to ensure priorities and desires are aligned and then find the right solution that meet that.
GmanJeff
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by GmanJeff »

sjhruby wrote: Fri Aug 28, 2020 10:13 am
Correct - he needs minimal monitoring and is not high touch. A quarterly call would be great for him, but these MS advisors struggled to even do that.

He would be fine with phone calls (he can't drive anyways) but values a relationship so talking to a different person each time would be less than ideal.

PAS clients with accounts worth more than $500,000 are assigned a dedicated advisor.
student
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by student »

GmanJeff wrote: Fri Aug 28, 2020 1:23 pm
sjhruby wrote: Fri Aug 28, 2020 10:13 am
Correct - he needs minimal monitoring and is not high touch. A quarterly call would be great for him, but these MS advisors struggled to even do that.

He would be fine with phone calls (he can't drive anyways) but values a relationship so talking to a different person each time would be less than ideal.

PAS clients with accounts worth more than $500,000 are assigned a dedicated advisor.
One thing to consider is whether the turnover rate of PAS advisors is high. I do not know the answer.
80125
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by 80125 »

No love lost between Morgan Stanley and I. Had a local branch experience a few years back that devolved into a "process quagmire,” with multiple, contentious verbal and written interactions over many months. Different problem in my case, was extracting an elderly parent and a long-term client [sigh] due to a significant life-change and the level of barriers and incompetence encountered was excessive to say-the-least.

If not already aware, consider leveraging the Client Relations channel. At the time of my circumstance I also tracked-down a specific contact list for elderly services: https://www.morganstanley.com/wealth-ge ... ntact.html

As noted multiple times up-thread, while the change may be significant for your relative in the near-term, his options are far better.

All the best with finding a resolution.
--cbu
BogleFan510
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by BogleFan510 »

I would echo the posts that suggest Schwab as a nice option. They provide pretty good attention, even if one is not in a managed account relationship. They have US based CS reps, who are great over the phone, even when I gripe about minor issues like their sweep fund options not paying much, and their high interest saving account reducing interest below the best online banks. Before Covid19, I was invited to several excellent seminars with their leading researchers, all free, no AUM relationship, not crazy large account.

Our family has had accounts for almost 50 years, and they led the way to discount brokerage, even before Vanguard did. That said, I have or have had accounts at Vanguard, Fidelity, eTrade, TDA, T Rowe Price and others, most of which are quite fine as well. Had a MS account for corp stock options once and I found them to be snobby and a bit of a pain by comparison. But I think Schwab seems the best fit in this case, especially if you research a bit to find the right designated contact.

Hope his team didnt have this guy https://www.cnn.com/2020/07/21/investin ... index.html
Bobby206
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Bobby206 »

Mr.BB wrote: Fri Aug 28, 2020 9:49 am They want to make as much money with his little work as possible. Your plan would make them do more work and also explain their decisions.
Yup. This is true. I would say many professionals are like this. I know I am. If my choice is $x for Y work v. $x for Yx2 work I'll take the former. I also know I have fired clients I felt caused too many headaches. We all make decisions in our business.

I have seen a couple of people get fired by a different big stock house but they only had about $1m accounts. When fired the branch manager connected them with a lower rung advisor. Firing a $3m account is surprising to me.
dbr
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by dbr »

Bobby206 wrote: Fri Aug 28, 2020 2:17 pm Firing a $3m account is surprising to me.
There is a sequence of events there of first bailing out of the AUM contract and then coming back and asking for advising. But even then it seems like "firing" a client is an extreme step for a corporate operation like that. It is hard to figure what burden the client is actually placing on the firm. They can just say no if they don't want to spend the hours. They still have the assets and possible commissions and the float on cash and the securities lending (if any) and all the rest.
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sjhruby
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by sjhruby »

dbr wrote: Fri Aug 28, 2020 2:25 pm
Bobby206 wrote: Fri Aug 28, 2020 2:17 pm Firing a $3m account is surprising to me.
There is a sequence of events there of first bailing out of the AUM contract and then coming back and asking for advising. But even then it seems like "firing" a client is an extreme step for a corporate operation like that. It is hard to figure what burden the client is actually placing on the firm. They can just say no if they don't want to spend the hours. They still have the assets and possible commissions and the float on cash and the securities lending (if any) and all the rest.
Exactly. If they had a problem with the request for a high-level plan they could have said that's not something we can do. They never even said that. No offer to get pushed to a more novice MS advisor willing to take a lower fee account either.
rgs92
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by rgs92 »

For anyone who wants an advisor, I would say Vanguard PAS is the best option by far.
I think it would be great if he signs up for PAS before he gets involved with someone else who would probably be much more expensive and have worse performance. It's the safest path IMHO. (It's a minefield out there with advisors of course.)
NotWhoYouThink
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by NotWhoYouThink »

My grandfather has been with Morgan Stanley for 30+ years; the advisor he worked with for most of that time retired a few years ago and he was grandfathered into a new group. Over the past few years, I became more involved in assisting him with his finances and realized that his new set of advisors at Morgan Stanley clearly weren't out for his best interests. Clearly, they were salesmen with little financial acumen. I've helped him question many of their recommendations, to which they've struggled to respond.
His old advisor was just as bad, but he was a good salesman and your grandfather mistook him for a friend.

Are there other family members to consider? If you continue taking such an active role in advising him, family is likely to blame you when (not if) his portfolio loses money. They are likely to wonder whether you are looking out for your grandfather or yourself. I don't think that's what you are doing, but the perception is common when a grandchild takes a serious interest in a grandparent's finances. Especially if the grandchild's actions get the grandparent separated from his long-time investment firm.

A man who has been with Morgan Stanley for 30 years is not a man who wants to be the expert in charge of his own money. it sounds for all the world like he wants someone to sell him on a plan, or sell you on a plan for his benefit. It seems unlikely that Vanguard PAS could give him the warm comfortable feeling he wants if all his dealings with them are on line or very occasionally over the phone, but maybe OP has reason to believe otherwise.

Low cost portfolios for anyone can easily be built at Schwab or Fidelity. For $3M he would be assigned an account manager who would probably have a title of Vice President of Client Hand Holding and some impressive groups of initials as credentials. So how would you see this going? Would you plan to attend every meeting between your grandfather and this VP? I don't think either company would "fire" him, but neither do I think that either would ever stop inviting him to special client presentations and sending him offers for how much more they could be doing for him. It's a business, he is the revenue source. You are an impediment to them, but until he is declared incompetent they can work around you. And although you have his best interests at heart, their training tells them that whatever corporate is pushing this year is actually better for him.

If your grandfather were writing these posts, my advice would be different. But because you are writing them, my advice is still to distance yourself from active involvement. Give your opinion when asked, but don't try to wrest control from him just yet. Only one of you can be in charge.
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LilyFleur
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by LilyFleur »

Why are you helping your grandfather with his finances?

Is he having cognitive problems? Is he ordering the same stuff two days in a row off the Internet?
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Watty
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Watty »

sjhruby wrote: Fri Aug 28, 2020 9:02 am I'm shocked they want to simply throw away a $3m+ account.
One thing that might be going on is that they may have decided there there is a risk that they might be sued, or a complaint filed, but either you or him so they are trying to reduce their risk.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by clown »

To OP - If your grandfather moves to Vanguard, he will automatically be a "Flagship" client (without the expense of PAS) and can call his dedicated flagship rep at any time. VG does not mind that at all. I occasionally have a question and the rep always says call me any time. That would enable him to "call his money" when he wants to.
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9-5 Suited
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by 9-5 Suited »

sjhruby wrote: Fri Aug 28, 2020 2:34 pm
dbr wrote: Fri Aug 28, 2020 2:25 pm
Bobby206 wrote: Fri Aug 28, 2020 2:17 pm Firing a $3m account is surprising to me.
There is a sequence of events there of first bailing out of the AUM contract and then coming back and asking for advising. But even then it seems like "firing" a client is an extreme step for a corporate operation like that. It is hard to figure what burden the client is actually placing on the firm. They can just say no if they don't want to spend the hours. They still have the assets and possible commissions and the float on cash and the securities lending (if any) and all the rest.
Exactly. If they had a problem with the request for a high-level plan they could have said that's not something we can do. They never even said that. No offer to get pushed to a more novice MS advisor willing to take a lower fee account either.
This whole thing is what happens when incentives between parties are misaligned, as they are in most of these big firm financial salesman models. My experience has been that these folks act more similar to timeshare salesman and multi-level marketing hucksters than I’m comfortable with. It’s an extractive business posing as help. My mom was paying nearly 3% in fees in a horrific portfolio because she didn’t know any better, before I took over helping her at Vanguard. It’s like a con man looking for the easy mark in too many occasions. They want their clients ignorant and inattentive. Don’t ask too many questions.

I think this is awesome news for you and your grandfather, and definitely second the advice to consider a session with Rick Ferri. Seems like a great match.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by RetiredAL »

sjhruby wrote: Fri Aug 28, 2020 2:34 pm
Exactly. If they had a problem with the request for a high-level plan they could have said that's not something we can do. They never even said that. No offer to get pushed to a more novice MS advisor willing to take a lower fee account either.
I have been the Trustee to my Dad's Trust for many years, but I always, until recently, got his agreement before doing anything significant. I worked on my Dad for a couple of years to allow me to fire his advisor, who he liked. What finally got my Dad's attention was when I showed him the amount of extra income tax he was paying each year related to the income created by the near continuous buy and selling. My Dad did not need this income stream, and from an estate standpoint, it was better off to just let his assets grow in situ.

What happened recently? 18 month's ago, my Dad declined suddenly requiring placement in Assisted Living and no longer participates in his financial affairs. I do tell him of any significant changes I make, but for the most part he is dis-interested. With his ability to log into his accounts gone, I no longer have to worry about him falling prey to phishing attempts. He got on someone's short list and receives several phishing emails each month. Since he knows I do all the finance stuff, he doesn't worry about them and he just deletes them.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by Katietsu »

Watty wrote: Fri Aug 28, 2020 4:13 pm
sjhruby wrote: Fri Aug 28, 2020 9:02 am I'm shocked they want to simply throw away a $3m+ account.
One thing that might be going on is that they may have decided there there is a risk that they might be sued, or a complaint filed, but either you or him so they are trying to reduce their risk.
This was my thought as I read through here.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by tj »

lakpr wrote: Fri Aug 28, 2020 9:07 am Vanguard Personal Advisory Services for 0.3%, which is a huge improvement over the 1%+ being charged by Morgan Stanley.
Initiate a transfer-in-kind from MS to Vanguard.

Don't even think about staying with MS anymore, that advice would have been the same even before the "fired" part.
This is horrific advice for a 3m portfolio. Can you imagine the capital gains?
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by BuddyJet »

tj wrote: Sat Aug 29, 2020 10:50 am
lakpr wrote: Fri Aug 28, 2020 9:07 am Vanguard Personal Advisory Services for 0.3%, which is a huge improvement over the 1%+ being charged by Morgan Stanley.
Initiate a transfer-in-kind from MS to Vanguard.

Don't even think about staying with MS anymore, that advice would have been the same even before the "fired" part.
This is horrific advice for a 3m portfolio. Can you imagine the capital gains?
While gains are a concern, saving 1-2% in fees every year is better in the long run. For an actively traded account, the gains are probably not that large.

On the OP question, I have accounts at Fidelity, TDAmeritrade and E*TRADE where I was assigned a rep who calls about twice a year to check in. With a $3mm account, you can find a happy home to move to. FWIW, my Fidelity rep is the best of the brokerages.
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Re: Financial Advisor (Morgan Stanley) wants to end relationship with ("fire") my grandfather

Post by chinchin »

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