Mutual Fund - Selecting a Broker Dealer

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thinker
Posts: 4
Joined: Sat Jul 25, 2020 7:26 am

Mutual Fund - Selecting a Broker Dealer

Post by thinker » Sat Aug 01, 2020 10:16 am

A Mutual Fund account that was opened up as a UGMA for me many (many) years ago by a family member was transferred to be in my name only earlier this year. I recently received a letter from the mutual fund company indicating that the broker dealer firm that is identified as the dealer of record on the account will be removed as the dealer of record at the direction of the broker dealer firm, and that I will need to select a new broker dealer. The letter indicated I should contact the broker dealer (Merrill Lynch) with any questions about the action. I have had no contact with the ML branch identified as the broker dealer.

All of my other holdings are self-directed and I don't have any other mutual funds like this in my portfolio so this is new ground for me.

I can certainly reach out to the existing broker dealer ML branch to identify what the reason is, although I'm not sure if that matters? (Although if it was an administrative action and they'd be just as content to stay on as the broker dealer with a zero-contact client, perhaps that's an option). As for selecting a new broker dealer, I'm not sure how to go about that. I do have a large Merrill Edge account and have been assigned a 'Premium Elite Relationship Manager' that I expect I could reach out to, but have had no contact with that individual and wasn't sure if that'd be the best route to take, and whether it would really make a difference or not that they're both Merrill/BofA-based.

At some point my plan was to sell the mutual fund and roll the proceeds into the investment accounts I manage, but I had put this on the back-burner to do so at a time when I can best manage the tax impact of selling. If it simplifies things to accelerate that plan, I'll consider it.

Any suggestions appreciated.

livesoft
Posts: 72464
Joined: Thu Mar 01, 2007 8:00 pm

Re: Mutual Fund - Selecting a Broker Dealer

Post by livesoft » Sat Aug 01, 2020 10:27 am

I see from another post of years that you are well past the age of majority and thus this UGMA is pretty late in getting to you.

A "broker-dealer" in this context is a just "another brokerage firm." If you have your other investments at Vanguard, then transfer to Vanguard. If you have your other investments at Fidelity, then transfer to Fidelity. If you have your other investments at Schwab, then transfer to Schwab. Your Merrill Edge account will be adequate if you would like to keep that account.

Also if you listed the ticker symbol(s) of these old investments then that might be helpful.

Be sure you have a complete list of all the transactions made in this account or at least the cost basis of all the existing shares. You will need all that when you unwind and sell these investments unless perhaps you give them away to charity. In that latter case, you can get away with just having good estimates of the cost basis. Presumably you have been receiving 1099-DIV and possibly 1099-B tax documents each year and declaring any income on your Form 1040 tax returns over all these years.
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Topic Author
thinker
Posts: 4
Joined: Sat Jul 25, 2020 7:26 am

Re: Mutual Fund - Selecting a Broker Dealer

Post by thinker » Sat Aug 01, 2020 11:16 am

Thank you for the reply; much appreciated.
livesoft wrote:
Sat Aug 01, 2020 10:27 am
if you listed the ticker symbol(s) of these old investments then that might be helpful.
Currently the account holds MIGFX: MFS Massachusetts Investors Growth Stock Fund-A.
livesoft wrote:
Sat Aug 01, 2020 10:27 am
Be sure you have a complete list of all the transactions made in this account or at least the cost basis of all the existing shares.
A key point and something I want to nail down before selling. Based on what I've pieced together to-date I believe it was originally opened through purchasing MGOFX: MFS Growth Opportunities Fund Class A in the 1980s. MGOFX was discontinued and the assets were transferred to MIGFX in June, 2007. I have attempted to fully detail the cost basis but haven't been 100% successful on that front yet.
livesoft wrote:
Sat Aug 01, 2020 10:27 am
Presumably you have been receiving 1099-DIV and possibly 1099-B tax documents each year and declaring any income on your Form 1040 tax returns over all these years.
Actually, yes, since the mid/late 90s, but that's where my trail back in time currently ends.

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