Trying to figure out Ameriprise fees and my options

[hunger]

I am 70 and retired and new to this website. My wife and I have investments with Ameriprise (American Express before they sold off the investment branch) ~ $280 K. In the mid 1980s under American Express it was fairly simple to understand fee structures. Now under Ameriprise, it nearly undecipherable. Ameriprise charges us a $3500 flat fee for financial planning plus wrap fees. I paid something like $5000 plus last year for various fees. I have a gut feeling that these various fees and services aren't really all that special and not so much in the interest of the client as they are Ameriprise. We have 3000 shares of GE in a brokerage account with Ameriprise. Ameriprise instituted a program of "Stop losses" a few years ago. Are these any good? The GE stock is not under a stop loss rule at the present time. We also have Long Term Care policies as well as a Life Insurance Policy with Ameriprise.

I am pulling off $1250 per month in retirement from investments from Ameriprise.

At this point I'm not altogether happy with their fee structure. I understand they should get something for their efforts but what they get for what they do seems high.

If we wanted to change our situation with Ameriprise, what options do we have? Thanks.

 

[Midpack]

That's a large sum of money in fees --- $3,500/yr for financial planning on $280K is excessive in my experience. My wife worked at Ameriprise for a while, we would not keep our money with them, their fees are relatively high and their advice was motivated by fees more than returns to clients. Account Managers/Advisors were pushed hard to generate fees. The turnover while she was there was very high, IMO a telltale indicator of what kind of employer they are. I'd suggest you start by comparing the fees you'd pay at Vanguard, Fidelity or Schwab - I think you'll find they would be considerably lower, and that might induce you to explore your options further. We've all made mistakes investing, you won't be the first if you find you've made a mistake with Ameriprise.

 

[hunger]

Thank you Midpack for your response. It is good to get other people's perceptions. This website seems like a very useful forum. I have set up an appointment with my Ameriprise FP to discuss the fee structure and talk to him about options. I will also talk to my credit union to see if they have some recommendations. Thanks again.

 

[bdk]

Hunger, welcome to this forum. It is, by far, the most professional and useful forum that I frequent.

Re Ameriprise, please read this article, and draw your own conclusions as to the expertise and value-add of Ameriprise advisors:
Ameriprise Free Financial Consultation Experience » My Money Blog

 

[travelover]

Also, search this forum for other's experiences with Ameriprise using the search function at the top of the page. You are not alone.

 

[soupcxan]

Unless they are providing you with some specialized service (estate planning? does ameriprise even do that?) for that $3500, it sounds like a total ripoff to be paying that plus the wrap fees. I would expect either a flat fee or a 1-1.5% wrap fee, but not both. The good news is, in this environment I think you have leverage to negotiate the flat fee away if you still want to stay with them.

Also, do we allow 70 y.o.'s in the young dreamers forum?

 

[FinanceDude]

I am 70 and retired and new to this website. My wife and I have investments with Ameriprise (American Express before they sold off the investment branch) ~ $280 K. In the mid 1980s under American Express it was fairly simple to understand fee structures. Now under Ameriprise, it nearly undecipherable. Ameriprise charges us a $3500 flat fee for financial planning plus wrap fees. I paid something like $5000 plus last year for various fees. I have a gut feeling that these various fees and services aren't really all that special and not so much in the interest of the client as they are Ameriprise. We have 3000 shares of GE in a brokerage account with Ameriprise. Ameriprise instituted a program of "Stop losses" a few years ago. Are these any good? The GE stock is not under a stop loss rule at the present time. We also have Long Term Care policies as well as a Life Insurance Policy with Ameriprise.

Yeah, if your rep is a CFP, he's double dipping you. The $3500 a year means that "we can talk whenever you want, but there's a charge for that". Then, they charge you 1-1.5% on the monies you have with them. Do you trade the GE shares? If not, I would remove them from the wrap fee.

Do you have any annuities with Ameriprise, just curious.........

I am pulling off $1250 per month in retirement from investments from Ameriprise.

At this point I'm not altogether happy with their fee structure. I understand they should get something for their efforts but what they get for what they do seems high.

If we wanted to change our situation with Ameriprise, what options do we have? Thanks.[/quote]

 

[FinanceDude]

Attention mods, can we move this to Fire and Money so more can comment on this? Thanks......

 

[REWahoo]

Done.

 

[Coach]

Hi hunger, and welcome to the forum.

I think you've gotten good advice so far. Basically, if it's an investment account, you can move it to a different brokerage any time you want. Vanguard, Schwab and Fidelity are all good recommendations, and each of them should be happy to discuss the possibility of moving with you. You'll want them to review your holdings to see if there would be any challenges in moving.

If you decide to move, once you have chosen the brokerage you should let them do the moving rather than Ameriprise. In general it seems like the receiving brokerage gets things done more quickly and with less hassle.

Best of luck, and again, welcome!

Coach

 

[FinanceDude]

If you decide to move, once you have chosen the brokerage you should let tthem do the moving rather than Ameriprise. In general it seems like the receiving brokerage gets things done more quickly and with less hassle.

Also, if you do move, tell Ameriprise NOT to stall on the transfer, that you expect the transfer to be done within 2 weeks, etc. I am frequently amazed at how some brokerage firms drag their feet on transfers, and Ameriprise is NOT KNOWN for cooperation when you move accounts out.......

 

[FinanceDude]

Done.

Thank you....

 

[FIREd]

Hi hunger.

I am a former Ameriprise customer. I too was paying thousands of dollars a year in fees: 1% of portfolio value in annual financial planning fee + 5.25% front load on every cent I was investing + the funds he had us invested in had high expense ratios (1.5%+). And let's not even talk about the fees I paid on the variable annuities... I figured that by switching to vanguard I saved $5,000-$7,000 a year in fees. That's a lot of money!

At the end, I didn't feel like I was getting good value for my money. My financial advisor was a nice guy, but his performance was very much sub par and I decided to let him go.

The other thing that irked me is that our Ameriprise portfolio was a lot more aggressive than what our risk tolerance dictated. Our FA admitted that he had to take extra risks in the hope of generating higher returns to compensate for the higher fees and show decent yearly net returns relative to a suitable index. Which made me think, why not invest directly in the index... No extra risk, much lower fees (and therefore more money I get to keep), and I am guaranteed to match the index performance.

In the end, I am absolutely delighted to have ditched Ameriprise.

 

[FinanceDude]

Our FA admitted that he had to take extra risks in the hope of generating higher returns to compensate for the higher fees and show decent yearly net returns relative to a suitable index.

Hey, at least he was being honest........

 

[hunger]

Thanks for the warm welcome and discussion/advice/info.

I get a printed financial plan each year but it looks more boiler plate than very specific. Although they do run some simulations with different risk assumptions--what happens if kinds of things.

soupcxan: I do not have anything converted to an annuity at this point, i.e. I have not converted any assets into an annuity. I had some investments with TIAA/CREF which I converted into an annuity whereby I get a monthly amount. I have not done that with Ameriprise assets. There is some "cash management" provided. Also SEPs/IRAs are managed. Also I have insurance (life and LTC) with them.

FinanceDude: There is some "basic" estate planning in that they check off whether or not you have a will, any trusts, power of attorney, and health care directive. In a sense they do provide some estate planning in the year-by-year plan in that the plan is revised to some extent.

My biggest concern is the bleeding of the portfolio via market losses and fees. I ran some numbers today and figured that if I could take the current value of the portfolio and pull it out and just leave it alone--no interest earned; just drawing off at the rate we are now, my wife and I would have enough to last between 15 and 20 years. If I continue to have Ameriprise manage things, I would only have enough to last between 10 and 15 years at the rate at which we draw off ($1250/month). Over a 10 year period I would pay $50,000 in planning fees and wrap fees if everything stayed the same as now.

Thanks again for the input.

By the way the message in a few comments says "This Thread is USELESS without pics...." Are you asking for some kind of picture (personal or other) with the post?

 

[Bestwifeever]

Welcome, Hunger (gee, that's what I say all the time since I'm trying to lose weight!).

I agree with Coach above--call Vanguard, Fidelity, Schwab, find out their fees, and then choose one. Have them handle the transfer from Ameriprise, not your Ameriprise advisor.

Here is a fairly recent thread about someone transferring out of Ameriprise: http://www.early-retirement.org/forums/f28/i-want-to-leave-ameriprise-41895.html

And the "This Thread Is USELESS without pics...." -- that's just a little joke related to some of the spicier threads that appear from time to time, so no need to be concerned about it! We're just a fun group

 

[hunger]

Thanks Bestwifeever for referring me to the thread: "I Want To Leave Ameriprise." Poor guy got skewered early on. Better to be skewered early on than later--except if you are 70-1/2 you probably have some latitude that you don't have if you are 25.

At age 70, when I start thinking about a planning horizon 15-20 years out I feel like the guy who wonders whether or not he should buying green bananas. May not be around to enjoy them before they ripen.

These threads have been most helpful. They helped me a great deal to understand some of my options.

I feel like the fee structure at Ameriprise is totally not transparent. You cannot find out what these fees are from their website. They are vague, abstract, and obtuse. They basically say the fees are based on each client's portfolio. So basically you are being asked to buy a "pig in a poke." This seems like an unethical practice. When I first got in to American Express (predecessor to Ameriprise), it was fairly clear what the charges were and they seemed reasonable. Now, under Ameriprise, it seems as if their fees are like the subprime mortgages that were broken apart and then bundled with other investments into "derivatives" and sold as something valuable and worthwhile. Later we found out this stuff was worthless paper that lead to the financial debacle we are currently experiencing.

 

[amerijunk]

Hunger, this is an outrageous amount to be paying Ameriprise. You're paying over 400 bucks a month that you could put to your retirement life style versus increasing Ameriprise's bottom line. The 400 a month doesn't even include any mutual fund fees. I understand they have to make a profit but this amount is flat out over the top. [moderator edit]

In the past, Ameriprise use to charge you a one time planning fee but to increase profits they now charge the planning fee each year by taking it from your account or charging your credit card. This fee is determined by "how much they can get". The plan is nothing more than boilerplate junk that is being generated out of India.

Actually someone who is 25 has more latitude as they have more time to make up losses while someone in their 70s does not. I suggest you leave Ameriprise as quickly as possible and start putting the 400+ a month to your retirement living and not Ameriprise's profits.