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Old 11-05-2010, 07:27 PM   #41
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Originally Posted by Rustward View Post
Did they sell you front loaded funds and charge other fees in addition to the loads?

If so and if you don't mind saying, how much in fees?

Agree with the posters saying to just move on quietly.
Not counting the VA, my advisor plunked my money into seven funds in an IRA and an SPS account. Here's the list of seven with the front load, expense ratios, 12b-1 fees and "since inception" rates of return following in order:
1. 5.75%, 1.19, 0.25%, 5.99

2. 5.75%, 1.34, O.25%, 1.27

3. 5.75%, 1.60, 0.25%, 2.84

4. 5.0%,, 1.68, 0.3%, 12.19

5. 5.0%, 1.21, 0.3%, 4.83

6. 4.5%, 0.99, 0.3%, 4.05

7. 2.75%, 0.88, .25%, 2.23

there might very well have been other fees, but I couldn't figure out what they might have been because i couldn't make sense of most of my paperwork.
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Old 11-05-2010, 07:37 PM   #42
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One of the things that did get his attention, is when I started reading from the back of the 100+ page compensation disclosure brochure that Ameriprise is required to hand out about their lawsuits. Over the years dozen of states Attorney General have filed suit against Ameriprise and over a wide variety of deceptive practices.

Now I don't think a 5% load is particularly deceptive, although an selling annuity in an IRA is border line financial malpractice IMO. Still Ameriprise can do no longer do lots of things in many states due to settlements, what they did to you may or may not be covered. So since you have the letter written I'd go a head and send a copy to the local better business bureau, along with your state's consumer protection agency. The BBB letter will hurt Ameriprise's future business, and the letter to the state will at least put your name on the list for any current or future lawsuits. It seems worth a couple of stamps to me.
Funny enough, I received a letter giving me the option to join a class action lawsuit against Ameriprise right after I gave them my money. I consulted my friend who had recommended me to the advisor (she was his advisor) and asked him about it. He said to disregard it because it was "obviously" a lawsuit from misguided and disgruntled clients. I just went along with his advice because I used to think he was so much smarter than him. NOT ANYMORE!!
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Old 11-05-2010, 07:48 PM   #43
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Oh, I forgot to mention that you guys are a pack of wolves!!!! But, I do find wolves beautiful animals and am entranced by their howls.

So, I've decided not to bother calling my FORMER! advisor and no way am I apologizing to her for stating in my refund request form that I was unhappy with her.

As a matter of fact, the more I think about our relationship the more I realize that I owe her no apologies. Twice I asked her to recommend books and websites to educate myself on retirement investing to which she said both times she would send me information but did not, once she met me for an appointment with her hair disheveled and no make up complaining that she was tired and could we just go to her place instead of having lunch. We went to "her place" which was actually her friend's barely furnished apartment that she was apartment sitting. And, anytime we met she was always digging for information on my ex who had recommended me to the financial advisor and why we broke up (hello! none of your business!)

Uggh,
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Old 11-05-2010, 07:54 PM   #44
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although an selling annuity in an IRA is border line financial malpractice IMO.
Quiz time: Why are so many annuities sold in IRAs? The answer is NOT to make the advisor rich!

So, why do people do it?
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Old 11-05-2010, 10:03 PM   #45
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Quiz time: Why are so many annuities sold in IRAs? The answer is NOT to make the advisor rich!

So, why do people do it?
Because it allows you to tax defer the same money twice?

Is the reason based on the death benefit rider in the VA? I'm not sure. I still think the reason is because the advisor makes a lot more commission on a VA then on a regualr MF.
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Old 11-05-2010, 11:03 PM   #46
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For the question regarding fees to close the Ameriprise account.

I was charged a $100 administrative fee to close the SPS account.

I wasn't charge an administrative fee to close the VUL, but the surrender charge was $5500.

It was simple and relatively inexpensive to get away from them considering the complexities of what they had us in and the size of our account.
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Old 11-06-2010, 12:24 AM   #47
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First to the OP congrats Willongo for escaping the evil clutches of Ameriprise. It was also nice to see a recent board member and victim like Lisa99 help show him the light.

I have been trying unsuccessfully to convince my best friend to leave Ameriprise. Ironically, the only reason he is thinking about is he see from her Facebook that they are political opposites. (So Sarah, FD be careful of friending your clients he he).

One of the things that did get his attention, is when I started reading from the back of the 100+ page compensation disclosure brochure that Ameriprise is required to hand out about their lawsuits. Over the years dozen of states Attorney General have filed suit against Ameriprise and over a wide variety of deceptive practices.

Now I don't think a 5% load is particularly deceptive, although an selling annuity in an IRA is border line financial malpractice IMO. Still Ameriprise can do no longer do lots of things in many states due to settlements, what they did to you may or may not be covered. So since you have the letter written I'd go a head and send a copy to the local better business bureau, along with your state's consumer protection agency. The BBB letter will hurt Ameriprise's future business, and the letter to the state will at least put your name on the list for any current or future lawsuits. It seems worth a couple of stamps to me.
It was those notices in the mail that tipped me off. I found it disconcerting to realize that the custodian of my retirement savings was being penalized—repeatedly—for deceptive sales practices or other wrongdoing.
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Old 11-06-2010, 02:27 AM   #48
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Originally Posted by FinanceDude View Post
Quiz time: Why are so many annuities sold in IRAs? The answer is NOT to make the advisor rich!

So, why do people do it?
Good question. My guess is part of the reason is the reps have have quotas on how many insurance policies the have to sell. Also aren't VAs treated as insurance policies which require a different/lesser test to pass in order to sell? My related guess is that it maybe a way of circumventing the fiduciary responsibility of the IRA custodian.
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some more questions
Old 11-06-2010, 10:33 AM   #49
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some more questions

I'm such a financial moron so forgive my dumb questions:

1. What exactly is a SPS account at Ameriprise? Is it just a fancy savings/checking account?

2. Have I been paying taxes on anything related to my SPS account? For example, every year my 1099 form would have some values for Total Ordinary Dividends, Qualified Dividends and Nondividend Distributions. Did any of these dividends have anything to do with my SPS and were any of these dividends taxable? All other entries were zero, except for Interest Income, but this was never more than a few cents or dollars.

3. I've already contributed the max into an IRA and a Roth IRA with the SPS check ($5000 into each) that I got from Ameriprise after closing the account. So, I'll have about $25,000 extra in my bank account from the SPS and VA (after I close the VA account soon!). Will I be taxed on this money since I cannot put it into either IRA's?

4. I was thinking of putting this money into tax-exempt bonds. Is this a good idea? Basically, I'm trying to put that money somewhere where I don't have to pay taxes because I'm a student and cannot afford to be paying taxes and also I can't have more than $25,000 in liquid assets as a requirement of some subsidy that I receive. I already have 20,000 in my bank account so the additional SPS and VA monies would put me way over the 25,000 limit.

I really need a Financial Advisor. BUT NOT FROM AMERIPRISE!!!!!!!!
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Old 11-06-2010, 10:44 AM   #50
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Uh-oh, you cannot contribute $5,000 to an IRA* and $5,000 to a Roth IRA during a single year. You can contribute a maximum of $5,000 to an IRA or a Roth IRA, not both. The $5,000 limit can be split between the IRA and the Roth (for example $2,000 goes in the IRA and $3,000 goes to the Roth). The interests, dividends and capital gains generated by the money you were not able to put in IRAs will be taxed.

If the SPS account was simply a managed brokerage account outside of an IRA, then yes dividends, interests and capital gains from that account are/were taxable. Since it sounds like you only had an IRA, a variable annuity and SPS account at Ameriprise, the 1099 you received every year was directly a result of dividends, interests and capital gains generated by the SPS account.

Generally speaking, tax-exempt bonds are a better deal if you are in a high tax bracket. So if you are in the 28+% Federal tax bracket and live in a state with high income taxes, tax-exempt bonds could be a good choice. Please do your research about possible pitfalls specific to tax-exempt bonds.

*I'll assume your IRA is a deductible IRA.
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Old 11-06-2010, 11:36 AM   #51
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Uh-oh, you cannot contribute $5,000 to an IRA* and $5,000 to a Roth IRA during a single year. You can contribute a maximum of $5,000 to an IRA or a Roth IRA, not both. The $5,000 limit can be split between the IRA and the Roth (for example $2,000 goes in the IRA and $3,000 goes to the Roth).
hmmm...i get the feeling i might end up paying some crazy taxes next year. i'll keep researching and figuring it all out.

in any case, if i can only contribute a max of $5000 to both, then what happens if i already have contributed 5000 to each? I did it online in Vanguard and both the IRA and Roth RA have 5,000 in each. As soon as my IRA from Ameriprise rolls over I'll then have 45000 in the IRA.
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Old 11-06-2010, 11:48 AM   #52
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hmmm...i get the feeling i might end up paying some crazy taxes next year. i'll keep researching and figuring it all out.

in any case, if i can only contribute a max of $5000 to both, then what happens if i already have contributed 5000 to each? I did it online in Vanguard and both the IRA and Roth RA have 5,000 in each. As soon as my IRA from Ameriprise rolls over I'll then have 45000 in the IRA.
You can call Vanguard and tell them you made "excess contributions to an IRA" and they will help you correct the problem. Make sure to take care of it before the end of the year though.

If you pay crazy taxes, you must have made crazy money, so all is not lost I guess...
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Old 11-06-2010, 12:04 PM   #53
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When I go to financial dinners and eat heartily at their, I also feel very satisfied. Just feel sorry for those who will get hooked.

I know what you mean, and those who bite buy also end up paying for the free meal that the rest of us who also ate and then disappeared into the night.
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Old 11-06-2010, 01:17 PM   #54
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Your rollover IRA doesn't count against your $5,000 limit in 2010 unless you had already put money into that Ameriprise IRA this year.

And you'll pay taxes on the SPS account proceeds if you had capital gains. Our account was about 4 years old and because of the market drop in 2007/2008 we were still underwater by about $18,000 net on our acct so we didn't have to pay capital gains tax to liquidate.

If your account is still open you can go to the SPS screen online and look at the tab called Gain/Loss (I think that is what it was called). That screen will show you for all the funds you were in whether you were positive or negative in each fund.
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Old 11-06-2010, 03:36 PM   #55
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Originally Posted by FinanceDude View Post
Quiz time: Why are so many annuities sold in IRAs? The answer is NOT to make the advisor rich!

So, why do people do it?
So, what's the answer? I'm curious about from the FA's POV.
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Old 11-06-2010, 05:08 PM   #56
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Cool. I called up Vanguard for advice and got my questions answered and my sanity restored.

Basically, I flipped out because I thought that I would be paying taxes on the entirety of the SPS and VA accounts when cashing them in, not just the gains.

And, because I cannot have more than $25,000 in my bank account (a requirement of a subsidy that I'm receiving) and I already have $20,000 in there I had no idea where to put the extra money from the SPS and VA (about $30000) if I couldn't put it in an IRA.

Vanguard advised me to open up a non-retirement acccount and to use their online funds advisement tool. So, I'll end up dropping the money in some funds that were recommended in a portfolio that included Total Stock Market Index (48%), Total International Stock Index (12%), and Total Bond Market Index funds 40%).

Vanguard is also issuing me a check for the Roth IRA that I had plunked $5000 into since I already plunked another $5000 into the IRA.

I'm sure I'll run into something else that will send me into orbit, but I'm not as panicked now as I was before.

I've been reading Random Walk Down Wall Street and it has been helpful but I obviously need to do much more reading and research to get a grip on sound investment practices. It's fun, though.
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Old 11-06-2010, 08:06 PM   #57
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I haven't looked at EVERYONE of your transactions but you may want to get a summary of what your Basis information was in Ameriprise before they close out your accounts. Your TAX return for 2010 will need some level of scrutiny to ensure all of these changes are properly accounted for in sheltered and general accounts. IRS is getting better at making them provide information but some are not very cooperative after your close the accounts.
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Old 11-06-2010, 10:08 PM   #58
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you may want to rethink the Total Bonds Fund in your Vanguard taxable account. If you have that fund in a taxable account, you'll have to pay taxes on the monthly dividends it pays even if you reinvest the dividends.

Not sure what your your total investment pot is, but you want to try to keep bonds in tax deferred accounts. We have all of our bonds allocation (40% of total) in our 401k accounts and the Total Stock Market Index and Total Intl Index in the Vanguard taxable acct.

You might want to get familiar with the Bogleheads forum. It's a good financial forum that that helps people with the fundamentals of investing. It's one of the sources I used for self-educating when we took over managing our investments. The FAQ on where each asset class should be placed (taxable account vs tax deferred acct and why) is here: Bogleheads :: View topic - Investment Planning
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Old 11-07-2010, 11:08 PM   #59
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Because it allows you to tax defer the same money twice?
Uh. no..........
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Old 11-07-2010, 11:09 PM   #60
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Cool. I called up Vanguard for advice and got my questions answered and my sanity restored.
VG gave you tav advice? Oh-oh.........
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