Another Financial Advisor Story

[Sheryl]

OK - I just want you guys in the biz to tell me what you think of this F.A.'s performance. I finally convinced my significant other to stop paying fees to Merrill Lynch and open a Fidellity account. For now we are just moving the funds over as is. I don't want to tell him what to do, but will slowly point out what could be improved... :

I think the guy he was "working with" was churning his account for all he could get.

These are the funds he had him in:

NRSCX 23% Harris Associates Focused Value
USLCX 27% John Hancock US Global Leaders
LAFCX 36% Lord Abbett Affiliated Fund
NECZX 14% Loomis Sayles Strategic Income

The Lord Abbett doesn't look too bad, and the Bond fund seems good, but the other two appear to be total dogs with huge ER - 2 - 2.4%

Should we be happy he at least hit 50% success rate?

 

[Mr._johngalt]

but the other two appear to be total dogs with huge ER - 2 - 2.4%

Yikes!

JG

 

[Brat]

IMHO guys don't like to hear they've been.. eh, shafted, at least my DH wouldn't.

Once all is at Fidelity pick one fund (the international would be a good start) and help him look around to see if there is another fund that does the same job better. Depending on his temperment you could put together a list of funds for him to consider.

If he thinks they are all dogs he will be angry and may shut down. Make progress slowly.

 

[sgeeeee]

IMHO guys don't like to hear they've been.. eh, shafted . . .

Does anyone like to hear they've been shafted?

Most people will deny, defend, rationalize, and ignore before finally admitting an error. Taking action to avoid the error in the future can take years. Correcting the existing error could take decades.

 

[Brat]

I think women are quicker to understand that they haven't received the best of service.... not a new experiance. We usually don't have our egos invested and just get angry.

 

[Bob_Smith]

OK - I just want you guys in the biz to tell me what you think of this F.A.'s performance.

If I am reading too much into your question, I apologize, but if by, "in the biz", you mean brokers/planners/advisers, you are probably asking the wrong group. Their definition of "performance" is tied to how much money they make - not how much the client makes. While those two goals are directly opposed to one another, it defines the basis of the relationship between most F.A.'s and their client base. So I would have to say that the F.A.'s performance in your S.O.'s case has been outstanding! I'm sure the F.A. is very happy with the money he has made.

That being said, anybody who churns his customers' accounts and sticks them into outrageously high cost funds isn't really a financial adviser at all - he's a salesman. Unfortunately, cleaning up the mess the F.A. made probably will involve even more money down the drain, especially if it involves taxable accounts.

Should we be happy he at least hit 50% success rate?

In the same sense that you'd be happy if a mugger gave you a beating that was only half as severe as it could have been... I guess one could be happy about the situation you describe.

 

[Sheryl]

Just to set the record straight - at least on S. O.'s ego - he's not terribly bruised. He has been watching the account loose or not make money for long enough to be done being pissed off, he just really had no idea what to do instead. He put half of it into a CD when interest rates got to 5% - and that was probably not such a bad idea overall. I think he is relieved to have me handle it, it's just that I want NOT to have too much control over his money. On the other hand, I guess if I manage his money and he fixes my decrepit house we will both be happier and better off. And he just replaced my mediocre stereo system with his megawatt blaster so he's happy on that account too.

As to my comment about "the biz" Bob - I guess I was just wondering what the reaction of the guys who do this for a living would be. Could they justify this selection somehow? I didn't have too much doubt what the rest of us would think.

It is funny the "loyalty factor" reared it's head here, too. Even though S.O. barely knows this guy, he was putting off having to face him or even call him about closing the account. He felt like he didn't know enough to tell the guy off, but had definite understanding that things are not good. He was very relieved to know it would all be handled electronically and/or thru the mail, and "the guy" would never know what hit him.

 

[Mr._johngalt]

I think women are quicker to understand that they haven't received the best of service.... not a new experiance. We usually don't have our egos invested and just get angry.

Re. "Women are quicker", don't agree at all. Re. "Just get angry",
probably true in my case. Not sure about others.

JG

 

[FinanceDude]

If I am reading too much into your question, I apologize, but if by, "in the biz", you mean brokers/planners/advisers, you are probably asking the wrong group. Their definition of "performance" is tied to how much money they make - not how much the client makes. While those two goals are directly opposed to one another, it defines the basis of the relationship between most F.A.'s and their client base. So I would have to say that the F.A.'s performance in your S.O.'s case has been outstanding! I'm sure the F.A. is very happy with the money he has made.

At least your DH didn't have it in Merrill's proprietary funds........

You have to liquidate them AT Merrill, because Merrill doesn't allow transfers, so if you bought B shares.................

 

[Brat]

Re. "Women are quicker", don't agree at all. Re. "Just get angry",
probably true in my case. Not sure about others.

JG

When I said "women are quicker" I intended to indicate that when the facts are before them they go from knowledge to anger in short order. Unless the "advisor" is a relative they make no excuses. As with Sheryl's SO, the problem is then 'now what?'

 

[FinanceDude]

When I said "women are quicker" I intended to indicate that when the facts are before them they go from knowledge to anger in short order. Unless the "advisor" is a relative they make no excuses. As with Sheryl's SO, the problem is then 'now what?'

Good point........it has been shown that women are better investors than men, because they are in general less speculators and less likely to "help out a buddy"............women need to feel the person can be trusted more than to "help out a buddy"

I think her SO KNOWS deep down that he made a mistake, but feels his "manliness" is at stake because obviously this path has turned out to be disastrous.........

Sheryl, I think you can let him down easy but just telling him that he is smart enough to do his own investing (with your help), you'll work together, and you BOTH can learn together.........

Sorry about your experience......... I know I catch a lot of grief for being an FA on here, but I DO take it personally when other FA's just do whatever they want because the client is unsophisticated or whatever.........the best thing is to move in a new direction.............my 2 cents worth............

 

[kcowan]

I would think SO would actually enjoy inflicting pain on his FA. I know when we moved MILs portfolio from her FA to a discount broker she was polite but firm with this lady who had extracted usurious fees for 10 years.

The FA took it pretty well. I guess she was happy to have had the free ride for so long.

 

[FinanceDude]

I would think SO would actually enjoy inflicting pain on his FA. I know when we moved MILs portfolio from her FA to a discount broker she was polite but firm with this lady who had extracted usurious fees for 10 years.

The FA took it pretty well. I guess she was happy to have had the free ride for so long.

Her SO is not going to inflict pain on a "buddy". Regardless, the FA will probably understand why the account was moved, and may try to save the relationship, but most likely will not.

Keep in mind that the folks on this forum take responsibility for their own investing, which is not the case in the general public...........because if it were, Vanguard and Fidelity would have 80% of the mutual fund market, which is not the case..........