Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Financial Advisor and Trust Fund
Old 10-11-2017, 01:48 AM   #1
Recycles dryer sheets
 
Join Date: Mar 2017
Posts: 147
Financial Advisor and Trust Fund

My sister is the trustee of my mother's estate which is in a trust which will be distributed in approximately 4-6 weeks. She received a phone call from the Edward Jones advisor who has been managing the account. He says there is approximately $160,000 in cash in the trust and suggested investing $100,000 of it into a bonds (JP Morgan and Black Rock) to earn interest even though we are close to a distribution.

I don't understand why he would suggest this-there would be so little money to be earned in such a short time frame, that the only thing I can think of is that he is looking to make some money on commissions. Does anyone know if either JP Morgan or Black Rock charge sales commissions? Why would the advisor suggest doing this?
__________________

__________________
SheitlQueen is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-11-2017, 03:53 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,507
The advisor makes money by selling things. It is well known that Edward Jones is one of the worst places to keep investment assets because their fees are enormously high and their sales reps are ignorant enough to do damage to their clients unknowingly.

Bonds and bond funds can lose money, too.
__________________

__________________
LOL! is offline   Reply With Quote
Old 10-11-2017, 04:43 AM   #3
Full time employment: Posting here.
 
Join Date: Dec 2015
Posts: 977
I think the suggestion is a last-ditch attempt to make a little money on the account before it is distributed out and likely no longer under his/her management anymore.

My dad's money was not with EJ, but once Dad died, and it was clear none of his heirs would be keeping their share under the management of his guy, he became a snippy pr!ck, and not particularly helpful to us in moving the investments out.
__________________
HadEnuff is online now   Reply With Quote
Old 10-11-2017, 05:12 AM   #4
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,482
Quote:
Originally Posted by LOL! View Post
The advisor makes money by selling things. It is well known that Edward Jones is one of the worst places to keep investment assets because their fees are enormously high and their sales reps are ignorant enough to do damage to their clients unknowingly.

Bonds and bond funds can lose money, too.
Exactly !
__________________
Doubt is not a pleasant condition, but certainty is an absurd one.
frayne is offline   Reply With Quote
Old 10-11-2017, 05:12 AM   #5
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,642
Quote:
Originally Posted by SheitlQueen View Post
I don't understand why he would suggest this-there would be so little money to be earned in such a short time frame, that the only thing I can think of is that he is looking to make some money on commissions. Does anyone know if either JP Morgan or Black Rock charge sales commissions? Why would the advisor suggest doing this?
Eddie's salesmen do what they do. I agree with others, don't take the bait. You'll probably regret it.
__________________
target2019 is online now   Reply With Quote
Old 10-11-2017, 05:46 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 15,676
Just say no.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 10-11-2017, 06:05 AM   #7
Recycles dryer sheets
 
Join Date: May 2016
Location: Finger Lakes
Posts: 50
My thought is that nobody cares more about your money than you. In many, many cases, FA's main goal is to make their money off of your money. It is as simple as that.
__________________
LuckyDog is offline   Reply With Quote
Old 10-11-2017, 06:13 AM   #8
Recycles dryer sheets
Red Badger's Avatar
 
Join Date: Jan 2017
Posts: 304
Sniff. Sniff, sniff. Sniff, sniff, sniff.

Something stinks. I think I smell fees.....



Edit - typos.
__________________
Never let yesterday use up too much of today.
W. Rogers
Red Badger is online now   Reply With Quote
Old 10-11-2017, 08:00 AM   #9
Full time employment: Posting here.
CaliKid's Avatar
 
Join Date: Apr 2016
Location: Cali
Posts: 514
That's really too bad they are giving that advice. Maybe, and I stress maybe, if it was going to be held in trust a year or more but 4-6 weeks to go no way. Keep it in cash. As stated above I have also heard bad things about EJ advisors.
__________________
______________________
Hoping to get out around September 1, 2022... I hope, I hope, I hope. Until then off to work I go....
CaliKid is offline   Reply With Quote
Old 10-11-2017, 08:23 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 5,367
I'm guessing the Morgan stuff comes with a nice 1% deferred sales charge. The Jones organization doesn't care about your money, other than making your money theirs.
__________________
MRG is online now   Reply With Quote
Old 10-11-2017, 09:14 AM   #11
Full time employment: Posting here.
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 712
This money is not retirement money, which means that Eddie is not legally bound by the DOL fiduciary rule. Further, it is my understanding that their corporate policy is that they will act as fiduciaries only as legally required. So your FA is not a fiduciary in the context of this account.

I believe that it is the case, too, that both BlackRock and JPMorgan offer funds with front and/or back end loads and with 12b-1 fees. Ka-ching!

So, as has been pointed out, this bozo is trying to rip off your sister.

She should run, not walk, away from Eddie. If she needs an FA, she should seek out one who is legally a fiduciary. IOW, a Registered Investment Advisor or an Investment Advisor Representative. These are both legal terms and the enforcement has teeth. Belts-and-suspenders, I would insist on an FA who is Series 65 or Series 66 licensed. https://brokercheck.finra.org/ is your friend.

Note that Certified Financial Planners (CFPs) are not legally fiduciaries, despite some advertising claims to the contrary. It is not a bad credential to have, but it is sort of like the Good Housekeeping Seal of Approval, bestowed by a business and not backed by any laws or government regulations.
__________________
OldShooter is online now   Reply With Quote
Old 10-11-2017, 10:10 AM   #12
Recycles dryer sheets
Bryan Barnfellow's Avatar
 
Join Date: Feb 2004
Location: Switzerland
Posts: 313
I'd go further and say (half seriously) that your sister could be accused of dereliction of her fiduciary responsibility to the other heirs if she took him up on his kind offer.

-BB
__________________
FIREd, April 1, 2015. My Retirement Benefits Package includes: 6 months vacation, twice a year.
Bryan Barnfellow is offline   Reply With Quote
Old 10-11-2017, 10:17 AM   #13
Recycles dryer sheets
 
Join Date: Mar 2017
Posts: 147
Thanks all, you are backing up my thought that this smells funny and the guy is only looking out to make a few bucks before he is no longer in charge of the money. I sent her a text last night NOT to do it but wanted some back up....I'll send her the link to the forum and let her read the responses.
__________________
SheitlQueen is offline   Reply With Quote
Old 10-11-2017, 10:21 AM   #14
Recycles dryer sheets
 
Join Date: Jun 2017
Location: Western NC
Posts: 163
as bb notes, another reason not to do anything is the personally liability the trustee faces in the event of any loss.
__________________
ncbill is online now   Reply With Quote
Old 10-11-2017, 10:31 AM   #15
Recycles dryer sheets
 
Join Date: Mar 2017
Posts: 147
Thanks again all, my sister has called them and told them not to do anything with the money.
A separate question, when funds are distributed, is everything in the trust (around $2 million) that is not in cash get sold, and then the money is distributed? Or is it split into
five equal, separate accounts and then it is up to the heirs to decide what to do with things from then on?
__________________
SheitlQueen is offline   Reply With Quote
Old 10-11-2017, 10:47 AM   #16
Full time employment: Posting here.
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 712
Quote:
Originally Posted by SheitlQueen View Post
Thanks again all, my sister has called them and told them not to do anything with the money.
A separate question, when funds are distributed, is everything in the trust (around $2 million) that is not in cash get sold, and then the money is distributed? Or is it split into
five equal, separate accounts and then it is up to the heirs to decide what to do with things from then on?
Unless the trust document specifies, it is up to the trustee. BUT ... I suggest that she consult with a tax-oriented CPA. There may be favorable or unfavorable tax consequences depending on the option she selects. I don't know, but SGOTI probably doesn't know for sure either.
__________________
OldShooter is online now   Reply With Quote
Old 10-11-2017, 10:54 AM   #17
Recycles dryer sheets
 
Join Date: Mar 2017
Posts: 147
Thanks Old Shooter!
__________________
SheitlQueen is offline   Reply With Quote
Old 10-11-2017, 10:58 AM   #18
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,603
Quote:
Originally Posted by SheitlQueen View Post
Thanks Old Shooter!


Make sure final income, Estate and inheritance taxes are paid before distributing the proceeds, along with any other bills and burial expenses. Once the money is distributed itís hard to get back.
__________________
Dash man is online now   Reply With Quote
Old 10-11-2017, 11:15 AM   #19
Recycles dryer sheets
 
Join Date: Mar 2017
Posts: 147
Quote:
Originally Posted by Dash man View Post
Make sure final income, Estate and inheritance taxes are paid before distributing the proceeds, along with any other bills and burial expenses. Once the money is distributed itís hard to get back.
Yes, we were advised of that and all that will be dealt with before distribution. Plus some money will be held back for 2017 taxes.
__________________
SheitlQueen is offline   Reply With Quote
Old 10-11-2017, 11:16 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 15,676
Quote:
Originally Posted by SheitlQueen View Post
Thanks again all, my sister has called them and told them not to do anything with the money.
A separate question, when funds are distributed, is everything in the trust (around $2 million) that is not in cash get sold, and then the money is distributed? Or is it split into
five equal, separate accounts and then it is up to the heirs to decide what to do with things from then on?
Typically, the trust assets will be sold and the proceeds (amounts retained to cover taxes on any gains) are distributed to the trust beneficiaries... but it doesn't have to be done that way if there were good reasons for doing so.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
advisor or no advisor frank FIRE and Money 10 04-29-2014 06:58 AM
Rental property basis in trust vs. not in trust Dash man FIRE and Money 2 04-19-2014 07:20 AM
Vanguard IRA rollover/Direct managed Fund by Financial Advisor unknownxz FIRE and Money 13 10-26-2010 07:30 AM
Senior Citizens kidnapped and torture Financial Advisor Cattusbabe Other topics 13 06-25-2009 04:52 PM
Should I use a CPA and Financial Advisor? RockSplat FIRE and Money 6 06-07-2009 08:23 AM

 

 
All times are GMT -6. The time now is 10:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.