Hi! Ameriprise client needing advice...

C

cucumber

Dryer sheet aficionado
Joined
Jan 29, 2014
Messages
33
Hi, I am just finding out about this message board and am learning a lot. I need some advice. I am 34 and have been with Ameriprise for the past 7 years. I have been reading posts on here about Ameriprise which made me dig deeper into our investments. My wife and I were suckered into the VUL and quickly figured out it was a total ripoff but now can't get out of it because of the surrender charges, which I was very unhappy about. I don't know too much about investing so we really rely on our advisor to guide us in doing what is best with our money. After reading all these posts though, I have a feeling that might not be the case. So my questions are...

Should I continue with Ameriprise since I am very unsure of how to do it on my own? I really would like to switch to Vanguard but am afraid I won't know what to do or how to invest. Is it possible to move my funds to Vanguard and just keep my Ameriprise advisor and have her advise me on the Vanguard investments? Since we don't have $500K of investments yet, it looks like there might not be many advisors that might want to take us on as clients. I just don't know what to do and I despise paying high fees if it doesn't make sense. Please help!!!
 
I will answer your last question....

No, you should not stay with them and invest in Vanguard.... first, I do not think they would do it as they want to get fees from your investments.... but second, it is a bad decision...

Start reading about investing and some of the basic portfolios...

Also, even with a small amount of money you can get investment 'advice' from Vanguard using their risk tool... it is kinda simple, but a good start...


https://investor.vanguard.com/what-.../give-me-tools-to-invest-on-my-own?Link=facet
 
Recent Departure

We recently walked away from Ameriprise after 13 years. So happy now. Same deal, this community and the folks over at bogleheads.org woke us up to the reality of the fees we were paying for what I feel was sub par service. We chose to go with Fidelity. They have advisor services available too. Although we're doing it advisorless. We could easily have gone with Vanguard though. I hear a lot of good things about either pick.

I highly suggest reading Vanguard's own John Bogle's book "Little Book of Common Sense Investing" and then following that up with some time over at bogleheads website.

Best of luck!
 
Welcome!

By far, the most important things you should be doing right now are:
- educate yourself on basic personal finance, IRAs, 401k, having an emergency find, general saving for retirement, stocks vs bond's vs mutual funds, term vs whole life insurance, commissioned vs fee-only advisors, etc
- don't move any money until you've spent 6 months getting some knowledge

There are plenty of introductory personal finance books out there. You could even look at a Suzy Orman or Jean Chatsky type book and watch their shows on TV.

If you don't like reading, tough. Do it anyway, or pay the price in retirement.
 
Your "adviser" at Ameriprise is not your friend. Your task now is to extricate yourself at the lowest possible cost. They will take a pound of flesh from you out on your way out the door.

The good news is that you can get all the investment advice you need here, at Bogleheads and with some reading.
 
Thank you for all the responses!!! I appreciate any and all advice since I am just starting off.

Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise? I will be reading up as much as I can before I begin the process of leaving Ameriprise.

Am I being naïve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?
 
cucumber said:
Am I being naïve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?
Click to expand...
Cucumber, you need to run away from Ameriprise. The advisor gets paid by recommending high expense funds. There's >tons< of evidence that these funds perform no better than low-cost funds even >before< the costs are taken into account, and their returns are much worse if we include the impact of the fees.
Yes, you are being optimistic and hopeful, and it only benefits this "advisor," not you. You shouldn't be apologetic about ending the relationship, the whole thing should make you angry and eager to move on and cut your losses.

Do a search for "Ameriprise" on this site to see how others have been treated.

Welcome to the board, and good luck.
 
cucumber said:
Am I being naïve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?
Click to expand...

In a word...YES.

I'm afraid it's really that simple. Do any google search on comparing index funds to actively managed funds and you will find that the actively managed funds, which your advisor is likely putting you in, rarely outperform index funds. Many of us on the forum invest in a lazy portfolio consisting of one domestic index fund, one international index fund, and then a bond fund or CD, or some combination of the two. It takes little effort to manage and requires you look at it only periodically to do a rebalance.

Even if you paid an advisor hourly one time to help you select the funds, you would be far better off than staying with Ameriprise and paying their ongoing fees. These advisors like to keep portfolios very complex to intimidate their clients into staying with them, but the portfolios, with the associated fees, almost never outperform the lazy portfolio. They simply can't because of all the extra fees they layer on.

Read a book or two, and if you still need some help with your investments, post your questions on this forum or the Bogleheads forum and you will get far better advice from the collective wisdom of the forum members than any one paid advisor will give you.
 
Samclem - hey, were you looking at my notes when you wrote your response? :LOL:

Is it possible that we spend so much time together on this forum that the whole group begins to think alike?
 
Ready, Hey, your post was just like mine! I think sometimes we all spend so time on this forum that we all begin to think alike. :cool:

Happy Groundhog Day to all!
 
cucumber said:
Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?
Click to expand...

You will have to read your policy to see what you can and cannot do. Typically VUL policies allow you to stop funding them if there is enough cash value in the policy to pay the policy expenses. However, do you need life insurance? Di you buy this for life coverage or as an "investment?" If you need life coverage, go get a 20 year term policy from someone else and dump this overpriced pig of a policy. If you don't, just dump the policy and get on with life.
 
brewer12345 said:
You will have to read your policy to see what you can and cannot do. Typically VUL policies allow you to stop funding them if there is enough cash value in the policy to pay the policy expenses. However, do you need life insurance? Di you buy this for life coverage or as an "investment?" If you need life coverage, go get a 20 year term policy from someone else and dump this overpriced pig of a policy. If you don't, just dump the policy and get on with life.
Click to expand...

I do need life insurance. I actually have a VUL and a term through Ameriprise because initially we couldn't afford the VUL to cover our needs so our advisor advised to get the balance with a term so we did since we trusted her. Didn't think to confirm any suspicions that she was acting in our best interests since I thought that's what CFP's fiduciary and ethical responsibilities were to the client.
 
Cucumber,

A CFP is not a fiduciary. They are a sales person who has passed some exams that qualify them to carry a title. A real estate agent must pass exams and have a license as well, but they clearly are motivated to sell property and earn commissions, not worry about whether you can afford to buy a home or whether the one they are showing you is really the best one for you.

If you want them to act as your fiduciary, send them a legal document that they must sign agreeing to act as such and see how they react to it. I suspect their reaction will be quite enlightening for you.
 
Ready said:
Cucumber,

A CFP is not a fiduciary. They are a sales person who has passed some exams that qualify them to carry a title.
Click to expand...

A point of clarification here... A financial advisor can be a CFP and also act as a fiduciary. They are two separate issues. Regardless of an advisor's credentials, you simply need to find out whether they act as a fiduciary... or not.
 
cucumber said:
Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise?
Click to expand...

These have been suggested and I agree with the suggestions.

The Millionaire Teacher. A great "first book" on saving/investing. I'm about to send a copy to DW's nephew & his wife, who are great people but in debt up to their eyeballs and trying very hard to get out.

The Millionaire Next Door. Published in 1998 this one is a classic and deservedly so. Some of it is dated but the principles are not.

How a Second Grader Beats Wall Street. A bit more detailed than Teacher but also a good entry-level book.

Edit to add: You don't have to actually buy these books. Check the library first.
 
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cucumber said:
....... Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise?.........
Click to expand...

These are good resources here, too. I personally like the Bogleheads Guide to Investment book.
Investment Books
 
I just wanted to say...try not to beat yourself up too much while you are in process to handle things yourself. We were with Ameriprise, then switched to Primerica before I knew anything about investing (smart investing). While with Primerica, I finally starting reading the right books and researching the smart stuff. It took me a little while to build up my confidence and finally switched to Vanguard. Read the books suggested above, read here, read Bogleheads. When you feel comfortable, take over as your own FA and you will save mucho dollars. And feel good about what you learn and the steps you take because many never learn the best way to invest!
 
cucumber said:
Thank you for all the responses!!! I appreciate any and all advice since I am just starting off.

Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise? I will be reading up as much as I can before I begin the process of leaving Ameriprise.

Am I being naïve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?
Click to expand...


Find out how much you would get if you just surrender the VUL. Also find out how long the policy is likely to provide coverage if you just don't make any further premium payments and let it run off and compare to the value of the life coverage provided. Then do one or the other but don't put any more new money into that pig.
 
brewer12345 said:
Wow! That is quite an accomplishment.
Click to expand...


Yes, it sure was, huh? We are now with Vanguard, thankfully. I grew up knowing nothing about investing. I always knew my parents saved money (a lot), but never really knew what they did with it. They still will not talk about it and my mother actually gets angry if I try to discuss the stock market. My hubby's father only invested in CDs back when they were earning 18%. Nobody around us talks about money or investing. Most people around here live paycheck to paycheck. So although I know we will most likely never be considered "rich", I feel good about what we have learned and how we are investing now.

That's why I am encouraging OP to not beat himself up about lost opportunities. You only can do what you know.
 
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brewer12345 said:
Wow! That is quite an accomplishment.
Click to expand...


Yah. "...Ameriprise to Primerica..." Wait? What?!??

Fortunately, he got better. ;-) Vanguard is a much better place in terms of lower expenses leaching away at your funds, and a good range of choices to build a portfolio out of.
 
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cucumber said:
Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?
Click to expand...

I once had an Ameriprise VUL. If I remember correctly, you have the option to stop making contributions to the policy. The premiums on the life insurance will then be paid from the cash value. If the cash value is low enough, it will eventually fall to zero and the life insurance policy will lapse. Otherwise, you can do what I did and wait patiently until you can withdraw the remainder of the money without paying surrender fees. Get ready for some pushback from your advisor.
 
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