Ameriprise feedback needed

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NEInvestor
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Joined: Sun Feb 05, 2017 3:45 pm

Ameriprise feedback needed

Post by NEInvestor » Sat May 12, 2018 9:40 pm

My dad is considering an Ameriprise advisor used by my grandfather. I am trying to convince him that it is not in his best interest as EVERY product that they push is usually not the best and very expensive. The advisor is trying to move my parents cash pension into an annuity which I think makes no sense since the pension is an annuity. I have challenged the advisor to prove historically it would be a good investment and he turtles on explaining returns. I am trying g to convince my dad to use a few only advisor. Can anyone share there good and bad stories with Ameriprise so I can help my dad out?

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sergeant
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Re: Ameriprise feedback needed

Post by sergeant » Sat May 12, 2018 9:51 pm

You can use the search function located in the upper right of this page.
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FlamingoTime
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Re: Ameriprise feedback needed

Post by FlamingoTime » Sat May 12, 2018 10:58 pm

Horrible experience with Ameriprise. Put me into some life insurance annuity with huge fees. (I was brand new to investing at the time) Found out later they had a class action law suit brought against them because it was redundant to put IRA monies into this type of fund.

I would suggest Fidelity or Vanguard or a fee only fiduciary advisor.

jalbert
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Re: Ameriprise feedback needed

Post by jalbert » Sat May 12, 2018 11:09 pm

It doesn’t get any more egregious than proposing to cash out a pension with a lifetime income stream option to buy a lifetime income annuity where Ameriprise takes a commission out of the cash distribution and the remaining funds buy a lifetime income stream. What they are proposing for your father is the example others should use to avoid Ameriprise.

Vanguard has advisor services (PAS) for 0.3% per year of funds under management. Your father could realize a lifetime income payout from the pension, and let Vanguard PAS manage any other assets. If the other assets are in a tax-qualified account, they could just be put in a Target Retirement fund without PAS.

If the pension will also cover expenses for your mother, an option with spousal benefits if your mother outlives your father is a good idea.
Index fund investor since 1987.

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badbreath
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Re: Ameriprise feedback needed

Post by badbreath » Sun May 13, 2018 12:14 am

by jalbert »

It doesn’t get any more egregious than proposing to cash out a pension with a lifetime income stream option to buy a lifetime income annuity where Ameriprise takes a commission out of the cash distribution and the remaining funds buy a lifetime income stream. What they are proposing for your father is the example others should use to avoid Ameriprise.

Vanguard has advisor services (PAS) for 0.3% per year of funds under management. Your father could realize a lifetime income payout from the pension, and let Vanguard PAS manage any other assets. If the other assets are in a tax-qualified account, they could just be put in a Target Retirement fund without PAS.

If the pension will also cover expenses for your mother, an option with spousal benefits if your mother outlives your father is a good idea.
Risk is not a guarantor of return
+4 Why would you take a pension (which is a annuity) and move it into a annuity other then for the benefit of the Adviser/salesman.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

NEInvestor
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Joined: Sun Feb 05, 2017 3:45 pm

Re: Ameriprise feedback needed

Post by NEInvestor » Sun May 13, 2018 4:41 am

Agreed. It seems like an awful idea to trade a pension for an annuity.

Thanks for the feedback.

inbox788
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Re: Ameriprise feedback needed

Post by inbox788 » Sun May 13, 2018 5:20 am

NEInvestor wrote:
Sat May 12, 2018 9:40 pm
My dad is considering an Ameriprise advisor used by my grandfather. I am trying to convince him that it is not in his best interest as EVERY product that they push is usually not the best and very expensive. The advisor is trying to move my parents cash pension into an annuity which I think makes no sense since the pension is an annuity. I have challenged the advisor to prove historically it would be a good investment and he turtles on explaining returns. I am trying g to convince my dad to use a few only advisor. Can anyone share there good and bad stories with Ameriprise so I can help my dad out?
https://www.usatoday.com/story/money/co ... s/2438883/

Can you ask your dad to explain what is going on? Does he even have a firm grasp on his pension and options? These days, traditional defined benefit pensions are very valuable, and folks that have them are fighting to keep them. Don't let him give it up without seriously understand what he has. Is this a lump sump cash payment or a monthly payment? Is the pension COLA? And the annuity? Is he offering to switch from a guaranteed monthly payment for a higher promised monthly payment, but no assurances or guarantees? No guarantees it's higher is going to mean too much risk. Focus on the risk and worst case in market crashes and negative interest rate environments and the worse performance to counter the false promises.

Keep him away from these terrible people. Have him talk to Vanguard PAS for some handholding that he seems to need.

I'm still trying to figure out the what the Ameriprise advisor is trying to sell, but it's surely praying on the uninformed with a complex product that he understands even less.
Last edited by inbox788 on Sun May 13, 2018 5:31 am, edited 1 time in total.

grettman
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Re: Ameriprise feedback needed

Post by grettman » Sun May 13, 2018 5:28 am

sergeant wrote:
Sat May 12, 2018 9:51 pm
You can use the search function located in the upper right of this page.
-1

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Cyclesafe
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Re: Ameriprise feedback needed

Post by Cyclesafe » Sun May 13, 2018 9:34 am

In 1989 I turned my then modest pile over to my good friend Dan Davis at Ameriprise (then IDS). I did this because Dan Davis cold called me at work at a time when my pile was tempting me to "step up" to a "professional" who would - in return for a modest 5% upfront buy-in - ensure that my investment would be in learned and experienced hands. They had a fancy office with an attractive receptionist and a bottomless coffee pot.

Dan charged me a couple of hundred bucks for a cobbled together loose-leaf binder that contained my personalized financial plan. He laid out a portfolio that IIRC was comprised of the following:

Variable annuity (allocated between fixed and equity funds, earnings tax deferred)
Fixed annuity (fixed tax-deferred return)
High yield bonds (to earn more interest - taxable)
International equity managed fund (because I was "interested in international economics")
"New Dimensions" US equity fund (because it had a good track record)

I should also mention that I was 6 years beyond a master's degree in finance from the USC school of business - which was/is considered a good program. I really had no excuse at the time for not taking control of my own finances. Vanguard was up and about at the time. In fact, through my company's SIP plan I already owned Vanguard's 500 Index Fund.

Well, I woke up after a couple of years and spent the next two decades 1035'ing the annuities to Vanguard and tax-effectively selling everything in taxable to buy Vanguard mutual funds. Fortunately, Ameriprise didn't have their hooks into my SIP or t-IRA, as these were administered by my employer.

So my story is far from unique. If not Ameriprise, it's another similar company, a company with clever advertising with actors portraying themselves as the investor's dear friend whose life's mission is to make investors rich. And then there is CNBC talking perpetual nonsense.

So what to do if a loved one is insisting on making a mistake? A mistake that has implications to you if the loved one needs financial assistance in their dotage because today they make a mistake that you could have helped them avoid.

Good luck.

NotWhoYouThink
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Re: Ameriprise feedback needed

Post by NotWhoYouThink » Sun May 13, 2018 9:59 am

My boss had some advice about this. Before he made a decision you could lobby him to make it one way or the other. After he made the decision you were expected to shut up and live with it.

Your parents are about to make a decision, so you can lobby away. I don't know them, but if the Ameriprise salesman is reaching for their heart and their fears, and you are appealing to their brains, then Ameriprise will probably win. You'll be right, and can enjoy being right, but he will probably win. So consider what you know about your parents, consider what arguments they will consider, and admit that they probably don't consider you to be a financial expert so Ameriprise may win no matter what you do.

Then live with it. They are your parents, and are not perfect, and never were, so just live with what they do even though you may know it to be a mistake.

This forum is great for people who want to learn and DIY. It's not so great for people who want to run their parents', children's, in-laws' or neighbors' lives.

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