Fidelity account opened by an advisor always "managed account"?

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Raspberry-503
Posts: 188
Joined: Sat Oct 03, 2020 6:42 am

Fidelity account opened by an advisor always "managed account"?

Post by Raspberry-503 »

So I had a Fidelity account with a 401(k) and a rollover IRA.
I worked with an advisor for a year (Facet) and added them to the account so they could manage it.
After a year I stopped using Facet, they told me they would remove themselves from my account, but when I tried a transaction a bit later I couldn't sell anything because "my advisor had locked my ability to transact independently").
I had to request from Fidelity that they remove the advisor, which they did within a few days, or at least I was able to buy/sell on my own.
A few days ago I was playing with some of the tools on the Fidelity web site and noticed some results along the lines of "portfolio analysis results not available, discuss them with your advisor instead". Then I noticed that the left side of the screen still called my accounts "professionally managed".
After contacting Fidelity they assured me my advisor was removed but because they opened the accounts they would always be marked as professionally managed. So I guess the advisor closed my existing IRA and reopened it as a different account back when? Possible but I sure didn't realize that.
More scary now Fidelity tells me my accounts may still be charged differently depending on the agreement with the advisor, they can't tell me more, but I should talk to my advisor.
I did contact them but have not heard back yet, but it is very scary to me that Fidelity still considers this account differently because let an advisor manage them temporarily, so somehow they're not truly mine anymore.
stocksurfer
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Joined: Tue Oct 09, 2018 11:30 pm

Re: Fidelity account opened by an advisor always "managed account"?

Post by stocksurfer »

I've had a similar situation and also had to ask them to unblock the trading, but that was easy. I'm actually happy that my accounts didn't revert to "normal retail" 'cause this way I didn't get assigned some Fidelity manager that looks how many $$ are in there or that breathes down my neck about how I should be investing or stuff like that. I have not seen anything special WRT costs or so, basically there are virtually none...
wanderer
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Location: Houston, Texas, USA

Re: Fidelity account opened by an advisor always "managed account"?

Post by wanderer »

Suggest opening new accounts in your name(s) only and transferring the fund positions. Leave these old accounts behind.

Some accounts seem to be coded a specific way at opening that cannot be changed. Years ago, I had a brokerage account opened by my employer for stock option grants. I also had a Fidelity "Separately Managed Account" for a while. When we cleaned up out accounts and switched to a BH approach we could not get these accounts renamed or switched over to regular accounts. Our advisor just opened new accounts in our names (DW and mine) and transferred the assets. These old accounts are still listed in my name, but with $0.00 balance.
Topic Author
Raspberry-503
Posts: 188
Joined: Sat Oct 03, 2020 6:42 am

Re: Fidelity account opened by an advisor always "managed account"?

Post by Raspberry-503 »

Some of the accounts are on a trust so it will be a slight pain to re-register them with the trust, and I use the free personal capital tools to track my accounts and it's annoying that when you switch account you lose the ability to look back at the history/performance past the transfer date even though it is the same account.
Minor problems but an annoyance I didn't bargain for by letting Facet administer "my accounts".
Topic Author
Raspberry-503
Posts: 188
Joined: Sat Oct 03, 2020 6:42 am

Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by Raspberry-503 »

[Thread merged into here, modified wording below --admin LadyGeek]

I worked with Facet last year and they consolidated my assets and opened some accounts on my behalf and now Fidelity is telly me those account will be flagged as "managed" forever, so some features are disabled unless I reopen them as new non-managed accounts.

I'm [upset at] Facet because I was very clear I was after advice only, not account management, and they assured me that I could stop having them manage my accounts at any time without side effects.

I'm [upset at] Fidelity because they can't take an advisor off an account, it need to open a new one and transfer, which means some of the tracking tools I'm using will not be able to trak the old and new account as the same tool.

Are there incentives to open an account with an other brokerage firm (e.g. sign up bonus) instead of opening new non-managed accounts with Fidelity?
valleyrock
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by valleyrock »

If you signed something with Facet, perhaps the fine print would tell the tale. And if you want to drop them, do it in writing ASAP (a notarized letter sent certified should do it, but see what the contract/agreement says about that, if anything). If you gave them POA, revoke it, etc.

Seems like it should be a relatively easy matter for your Fidelity rep to find out what needs doing and get it done, with you going in and signing as necessary, of course. First, I'd send them an email summarizing what they've told you about needing to open new accounts and transferring, and why, and asking them to be sure and verify that is the case. And be careful about doing in-kind transfers, of course... make sure you confirm that with them in writing, as well... you don't want an IRA changed to a taxable account, for example.

What tracking tools? Are they all that useful? Moving things as strangely comprised as they seem to be righ t now to another company might create more problems. First, get stuff back under your total control, and then perhaps see if you can get some incentive to go to Schwab or something...

Good luck.
Doctor Rhythm
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by Doctor Rhythm »

I wouldn’t personally feel any animosity towards Fidelity about this situation. It sounds like they have a policy in place for a managed account opened by a manager, and they’re simply following the policy. Opening a new account as an existing customer and transferring your assets to it seems trivially easy compared to any of the alternatives - especially moving to a new brokerage.
Silk McCue
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by Silk McCue »

Doctor Rhythm wrote: Thu Jan 20, 2022 2:13 pm I wouldn’t personally feel any animosity towards Fidelity about this situation. It sounds like they have a policy in place for a managed account opened by a manager, and they’re simply following the policy. Opening a new account as an existing customer and transferring your assets to it seems trivially easy compared to any of the alternatives - especially moving to a new brokerage.
+1

Take the emotion out of this and move on.

Cheers
AlphaLess
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by AlphaLess »

Every problem needs a root cause analysis.

The root cause is this: how did Facet manage to open accounts on your behalf?

This is either illegal, or you gave them permission.

I would never give anyone permission to open accounts on my behalf.
I don't carry a signature because people are easily offended.
aristotelian
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by aristotelian »

I would not hold this against Fidelity. Shouldn't be hard to transfer assets over to new accounts if that is how they prefer to do things.

That said, Merrill Edge currently has a sign up bonus. I've been very happy with them.
https://www.merrilledge.com/offers/multiproduct

Doctor of Credit has a good rundown of others. If you are interested in Schwab let me know via Private Message and I can shoot you a referral.
https://www.doctorofcredit.com/best-bro ... p-to-3500/
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LadyGeek
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Re: Fidelity account opened by an advisor always "managed account"?

Post by LadyGeek »

Raspberry-503 - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
mitje22
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Re: Fidelity account opened by an advisor always "managed account"?

Post by mitje22 »

I wonder why there is a thread about a Fidelity issue on Bogleheads forum as they are Vanguard investors
Silk McCue
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Re: Fidelity account opened by an advisor always "managed account"?

Post by Silk McCue »

mitje22 wrote: Thu Jan 20, 2022 2:59 pm I wonder why there is a thread about a Fidelity issue on Bogleheads forum as they are Vanguard investors
You are simply mistaken. We are Bogleheads not Vanguardheads.

Cheers
Doctor Rhythm
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by Doctor Rhythm »

aristotelian wrote: Thu Jan 20, 2022 2:37 pm I would not hold this against Fidelity. Shouldn't be hard to transfer assets over to new accounts if that is how they prefer to do things.

That said, Merrill Edge currently has a sign up bonus. I've been very happy with them.
https://www.merrilledge.com/offers/multiproduct

Doctor of Credit has a good rundown of others. If you are interested in Schwab let me know via Private Message and I can shoot you a referral.
https://www.doctorofcredit.com/best-bro ... p-to-3500/
Interesting - I haven’t opened an account with a new brokerage in 15 years so wasn’t aware of the current bonus offering. Seems like a lot of them are around 0.1-0.3% — which isn’t nothing but also isn’t more than a typical day’s market change. Means that any liquidation and time out of the market required at transfer could easily outweigh the bonus.

And congrats on your upcoming 10,000th post.
aristotelian
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Re: Fidelity telling to me reopen my accounts, any advantage to switching to someone else?

Post by aristotelian »

Doctor Rhythm wrote: Thu Jan 20, 2022 3:13 pm
Interesting - I haven’t opened an account with a new brokerage in 15 years so wasn’t aware of the current bonus offering. Seems like a lot of them are around 0.1-0.3% — which isn’t nothing but also isn’t more than a typical day’s market change. Means that any liquidation and time out of the market required at transfer could easily outweigh the bonus.

And congrats on your upcoming 10,000th post.
Thanks! Not sure what it was like 15 years ago but these days you can do an in kind transfer so no time out of market or liquidation needed.
Jack FFR1846
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Re: Fidelity account opened by an advisor always "managed account"?

Post by Jack FFR1846 »

Me in this situation: "Hello Schwab....I have a number of Fidelity accounts I'd like to transfer to you. Please apply any bonus available. Here's my account numbers and balance in each account".

I'm sorry but I would absolutely not put up with this. I don't care if it's not Fidelity's issue. And I've got 2 commas at Fidelity.
Bogle: Smart Beta is stupid
bondsr4me
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Re: Fidelity account opened by an advisor always "managed account"?

Post by bondsr4me »

Silk McCue wrote: Thu Jan 20, 2022 3:02 pm
mitje22 wrote: Thu Jan 20, 2022 2:59 pm I wonder why there is a thread about a Fidelity issue on Bogleheads forum as they are Vanguard investors
You are simply mistaken. We are Bogleheads not Vanguardheads.

Cheers
+1
dbr
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Re: Fidelity account opened by an advisor always "managed account"?

Post by dbr »

I would guess there are any number of reasons an account gets named and labelled a certain way and that the process, possibly at any broker, is to open a new account and transfer the assets. This could actually be a really good idea as it severs the account from anything that was attached to it previously. Naturally one has to pay attention to settings such as beneficiary, tax handling, making sure basis comes over, etc., but it may well be for the best. I would not get emotional about procedures.
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