Managed results...your Fired?

[pb4uski]

Agree with OldShooter. I'm also very surprised that the broker is cooperating with you. In our state, becoming a guardian for an elderly relative who is mentally incapacitated is a relatively easy but time consuming process.... I've been through the process twice.

[Luck_Club]

Quote:

Originally Posted by OldShooter Sticky. Does your relative have an attorney? (a) the broker should not be taking direction from you; it exposes him to legal liability if other heirs sue him for breach of fiduciary duty. (b) you, too, are in a bad spot if you are not the sole heir and someone wants to sue. Re Raymond James, probably they will not win any popularity contests on this forum. But until you have legal authority you are basically stuck with them. Re 1.2% In my experience that would be a high wrap fee on any account $1M or larger.

Yes I do believe I'm kind of stuck until my relative passes. He is mentally incompetent so we can't sign anything.

I'll talk with the broker about the fee's, but I think he realizes we are stuck between a rock and a hard place until the relative passes.

[OldShooter]

Quote:

Originally Posted by Luck_Club Yes I do believe I'm kind of stuck until my relative passes. He is mentally incompetent so we can't sign anything.

Unless you are the only heir, I'd encourage you to pursue a guardianship. Just to keep things clean and also to give you legal standing with respect to the account.

Quote:

Originally Posted by Luck_Club I'll talk with the broker about the fee's, but I think he realizes we are stuck between a rock and a hard place until the relative passes.

In thinking about this thread I remembered reading that some of the storefront brokers sell investments that are unique to them, probably private placements or something similar. Not liquid, not transferrable to another brokerage house, etc. So I googled "raymond james gas and oil investments." Hard to tell for sure, but there seems to be smoke if not fire regarding Raymond James and various oil and gas deals. I'd suggest at least running a brokercheck (https://brokercheck.finra.org/) on your guy and on his branch manager, then also googling the names of the investments that your relative is in.

our broker may like oil and gas because of the money he and his firm make rather than because that sector concentration is a good thing for your relative. That would also explain why he resists you when you object to the concentration.

FWIW here is an article I ran across a couple of weeks ago that details firms employing larger numbers of brokers who have had compliance or other problems: https://advisorhub.com/study-slams-f...0-worst-firms/

[Luck_Club]

Quote:

Originally Posted by OldShooter Unless you are the only heir, I'd encourage you to pursue a guardianship. Just to keep things clean and also to give you legal standing with respect to the account. So I googled "raymond james gas and oil investments." Hard to tell for sure, but there seems to be smoke if not fire regarding Raymond James and various oil and gas deals. I'd suggest at least running a brokercheck (https://brokercheck.finra.org/) on your guy and on his branch manager, then also googling the names of the investments that your relative is in. /[/URL]

I checked the broker he is clean. The oil and gas industry was where this relative worked, so I'm sure he had some input.

Upon more reflection the fee probably includes federal with holding, so I think the actual fee is closer to 0.6%, and the remainder is taxes, which is probably quite a bit better.

On guardianship. No thank you. Very expensive and time consuming especially for a back of the envelope type guy like myself. I know that I'm not stealing, and will make it very easy for anyone to audit the books when the time comes.

I'm doing a triple blind study on managing the money.
1) another managed account
2) A computer managed account (taxable account)
3) my management of dividend stock picking and ETF's

Vs the current broker

[pb4uski]

Quote:

Originally Posted by Luck_Club Yes I do believe I'm kind of stuck until my relative passes. He is mentally incompetent so we can't sign anything. I'll talk with the broker about the fee's, but I think he realizes we are stuck between a rock and a hard place until the relative passes.

If he is mentally incompetent then you should petition the court to be appointed as his guardian unless it is more appropriate that some other relative be appointed guardian. He needs a guardian to oversee his finances and to make financial and non-financial decisions for him.

The process it relatively easy. You petition the court and they appoint counsel for him. The petition is also provided to other interested parties (other blood relatives). His counsel interviews him and medical professionals caring for him make affidavits as to his mental state. A court appointed mental health professial also interviews him and reports to the court. Then you appear before a judge, he asks you a few questions, reviews the evidence and appoints you as guardian and you can use to court appointment take control on his behalf.

Been through it twice... easy peasy.

[ERD50]

Quote:

Originally Posted by Luck_Club ... I'm doing a triple blind study on managing the money. 1) another managed account 2) A computer managed account (taxable account) 3) my management of dividend stock picking and ETF's Vs the current broker

What is the intent here? Are you saying you are going to run an experiment (which could take many years to catch both up and down cycles in the market) to determine how best to invest for an 82 year old?

There's plenty of existing studies, this makes no sense to me at all.

You seem to be focused on the bugs on the moss on the bark on the trees and missing the forest. You never answered the basic questions I posted earlier:

Quote:

What's the AA? What are the fees? How dependent is the owner on the portfolio (maybe they get by on pension and SS, and this is just 'gravy')?

Is there someone else who could be named guardian? No offense, but it doesn't appear you have the right skill set for this responsibility.

-ERD50

[rodi]

Quote:

Originally Posted by pb4uski If he is mentally incompetent then you should petition the court to be appointed as his guardian unless it is more appropriate that some other relative be appointed guardian. He needs a guardian to oversee his finances and to make financial and non-financial decisions for him. The process it relatively easy. You petition the court and they appoint counsel for him. The petition is also provided to other interested parties (other blood relatives). His counsel interviews him and medical professionals caring for him make affidavits as to his mental state. A court appointed mental health professial also interviews him and reports to the court. Then you appear before a judge, he asks you a few questions, reviews the evidence and appoints you as guardian and you can use to court appointment take control on his behalf. Been through it twice... easy peasy.

Guardianship process varies widely by state. We've been through it in Kentucky and Pennsylvania. I would *not* describe it as easy peasy. Especially if the subject is contesting it, has a phobia of doctors and social workers, and has some paranoia. Even the transferring of guardianship from one state to another - when both states were signatories to the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act.

I'm glad you had an easy peasy experience, twice... We did not... twice.

[Luck_Club]

Quote:

Originally Posted by ERD50 What is the intent here? Are you saying you are going to run an experiment (which could take many years to catch both up and down cycles in the market) to determine how best to invest for an 82 year old? There's plenty of existing studies, this makes no sense to me at all. You seem to be focused on the bugs on the moss on the bark on the trees and missing the forest. You never answered the basic questions I posted earlier: Is there someone else who could be named guardian? No offense, but it doesn't appear you have the right skill set for this responsibility. -ERD50

I get the trees forest analogy.

SS & Pension cover living expenses. Portfolio is gravy.
AA 25% Equity, 13% foreign equity, 49% fixed income, 4% REITS small cash, alternative and non-classified.

Fee is closer to 0.6%; the 1.2% was including tax withholding.

Guardianship..I was advised by his attorney not to seek guardianship, because it has a burdensome and costly reporting process.

My competency to handle the affairs, I may not know the true intricacies of stock market investing, I think it is quite irrational, with lots of traps and pitfalls for the unwary. However, I can read a P&L, cash flow statement, book value, and other various ratios like DE, inventory turns etc, and see when a return is present or not.

My Forrest through the bug on the moss of the tree question is should one expect a full charge broker, who has the ability to move in and out of positions on his own be doing better than the results I posted? Keeping in mind the account holder was 80 when I started watching.

[travelover]

The down side of suggesting changing investments for another is that investments are volatile. If the value / dividend goes down after you recommend a change, you are the bad guy.

[Luck_Club]

Quote:

Originally Posted by ERD50 Is there someone else who could be named guardian? No offense, but it doesn't appear you have the right skill set for this responsibility. -ERD50

One other thing. Watching the money manager is only 1 of the many tasks I have on my plate for my relative. Relocating them 1200 miles from their summer to winter residence was probably the most difficult faced so far. Many options to evaluate boiled down to 2 options private ambulance transport at $7500 or buying a care giver a round trip plane ticket costing a bit under $1000. Guess which way I went? Some of the other tasks include keeping bills paid, coordinating/ managing 24-7 care givers, making sure food, and supplies are in place when needed, making sure medical treatment is taking place and appropriate, property maintenance, and prearranging funeral and burial arrangements to name a few. ALL WITHOUT A VALID POA I might add!

[ERD50]

Quote:

Originally Posted by Luck_Club ... should one expect a full charge broker, who has the ability to move in and out of positions on his own be doing better than the results I posted? Keeping in mind the account holder was 80 when I started watching.

I take it you haven't spent much time reading here. People constantly reference the studies that show that ~ 85% of money managers fail to beat their broad-based indexes over a 5 year cycle. And few of the 15% manage to repeat it in the next 5 year cycle.

But as travelover just mentioned, is it worth changing things now? Maybe, maybe not.

I just say your updated post - yes, you have your hands full (been there done that), so the last thing you need to worry about is some minutia like a "triple blind study on managing the money", and trying to measure the broker.

Either leave things as they are, or go with the studies and move him to some low cost broad based index funds that match the AA appropriate for an 82 YO.

But it sounds like you don't have the authority to do this anyhow, so I'm really not sure what we are talking about? When I was helping my DM with her financial affairs, it was when she was mentally aware and able to make decisions, I just gave her input and did what she decided (whether I agreed or not, as long as I felt she wasn't being irrational). And sometimes when I visited her with a financial issue, and she was very tired or a little out of it, I skipped it and waited for a better time. But she was lucid most of the time up to her passing, so that worked - your situation is different. I also documented everything, and sent out copies and info to all the siblings in near-real-time.

Good luck, it is a tough position to be in. Hope it all works out, but maybe you need to step back and think about what you can and cannot do?


-ERD50

[OldShooter]

Quote:

Originally Posted by Luck_Club ... Guardianship..I was advised by his attorney not to seek guardianship, because it has a burdensome and costly reporting process. ...

If there is anyone else who is an heir or who can argue that they should be an heir, IMO this is bad advice.

How do I know this? My DW was an SVP and Business Unit manager In the investments & trust division for one of the too-big-to-fail banks. She routinely came home with horror stories about expensive intra-family legal fights over estates. It is not enough to be honest and to have a good paper trail; you must also be able to prove to a judge that your decisions were fiduciary-grade and that you were qualified by training and experience to make them. Obtaining legal guardianship won't completely preclude legal action against you but it is pretty good repellent. I've tried to make this point a couple of times now, so I won't do it again. Good luck in whatever you decide.

[pb4uski]

Quote:

Originally Posted by Luck_Club ....Guardianship..I was advised by his attorney not to seek guardianship, because it has a burdensome and costly reporting process. ....

While I know it varies from state to state, the reporting is not particularly burdensome in my state. Perhaps it was easier for me since I am an accountant by trade.

As I recall, I had to provide a report with my ward's balance sheet as of the date that I was appointed within 45 days after I was appointed. It was easy since I was already managing their finances.

Then a balance sheet and "P&L" annually thereafter. And then a stub period P&L and balance sheet through the date of death.

In my case one was for less than a year and the other for less than three years.

If I recall correctly, the "interested parties" that received the original petition also received copies of thse reports. In my case, the custodianship was totally uncontested... the interested parties were thankful that I was willing to do it and that they didn't have to... so that made things a lot easier.

[pb4uski]

Quote:

Originally Posted by Luck_Club One other thing. Watching the money manager is only 1 of the many tasks I have on my plate for my relative. Relocating them 1200 miles from their summer to winter residence was probably the most difficult faced so far. Many options to evaluate boiled down to 2 options private ambulance transport at $7500 or buying a care giver a round trip plane ticket costing a bit under $1000. Guess which way I went? Some of the other tasks include keeping bills paid, coordinating/ managing 24-7 care givers, making sure food, and supplies are in place when needed, making sure medical treatment is taking place and appropriate, property maintenance, and prearranging funeral and burial arrangements to name a few. ALL WITHOUT A VALID POA I might add!

How do you pay bills, etc without a POA? Are you an authorized signer on their bank account?

Even once I was appointed custodian, some financial institutions were not particularly cooperative... luckily, much of the stuff that I needed to do I could done by registering on their websites and then executing transactions.... while it might not have met the letter of those financial institutions policies I was the court-appointed custodian so I felt comfortable doing it.