100K in Cash - Merrill Advisor Yelling At Me to Invest

[rathgar]

DH has a 401K with Merrill Lynch. He is no longer working but he left the account with ML.
We have discussed finding a "real" financial advisor.
I have mentioned the thought of doing it ourselves, but DH not open to that option.

We met with ML advisor who spent most of our time being snarky and sarcastic toward me because I have 100K in a bank savings account in my name and I refuse to add it in to the 401K or to invest it with ML.

She was beyond pushy about the issue.

Any advice regarding leaving ML, changing to a new financial advisor?

Would you recommend I invest the 100K? Does anyone believe in keeping some money in cash?

 

[brewer12345]

Get the money away from ML. You are begging to be screwed. Either find a fee-only planner, or move the money to a shop like Vanguard.

 

[RobbieB]

I like to have a hundred grand in cash. Sorta my bottom line level.

Yeah, you aught to do it yourselves a hundred grand isn't going to get a lot of FA attention.

I think she was hoping you would go away.

 

[CRLLS]

Definitely leave ML. At absolutely minimum, have DH talk to her manager and tell him/her you both don't appreciate being bullied and you want another advisor. But IIWM, I'd do the former.

However...… I do hope that the 100K in savings is at least in a high interest earning savings account or CD if you want FDIC security, or a Money Market account. Not knowing details of your total investments and your combined comfort level, it is hard for anyone to suggest much.

 

[HI Bill]

The bank savings account is FDIC insured, but likely pays next to nothing. A money market account like Vanguard's VMFXX is not FDIC insured, but currently pays 0.12% YTD, so APR is about 1.44% (12 months was 2.14%). Not great, but you're losing less with the money market fund. If you don't mind not having the $ FDIC insured, then there are better places to put the $ so you don't guarantee that their purchasing power is eroded by inflation.

I certainly wouldn't place it with ML...no trust here, and with the way you've been treated...

 

[FREE866]

Would you recommend I invest the 100K? Does anyone believe in keeping some money in cash?

What is your time horizon for these funds?

 

[rathgar]

Husband is retired. I am retiring in October.
We have been calculating our sources of income without including the $100K.
We think we have enough to retire with reasonable comfort.
The 100K has been there for emergencies.
We have discussed putting it into CDs.

 

[pb4uski]

CDs are fine or an online savings account gives you immediate access to your money is FDIC insured and pay 1.7-2.0%.... much more than anything ML can sell you that is FDIC insured.

P.S. If a FA treated me the way that you describe I would tear her a new you-know-what, complain about her to her superiors and move all my money somewhere else.... but I'm just a vindictive jerk when people treat me like that.... like a mirror, you get what I see.

 

[RobbieB]

CD is good for emergency.

 

[USGrant1962]

No one can answer your question about $100K in cash without more information. First, it should almost definitely be in a high-yield savings or money market (*or CDs). If it is 5% or even 10% of your portfolio it is probably fine. If it is more than that you are looking at a cash drag issue that should be analyzed based on your risk tolerance, near-term spending plans, long term plans and more.

None the less, the ML person is just looking for more fees. I actually let ML do a free analysis of my portfolio and try to sell me on their services. The analysis was nothing you couldn't figure out with a little time here and on Bogleheads and similar sites - and mine was fine. Their suggestions were tweaks on the margins that would have little real impact. I asked the "kid" how many bear markets he had been through? He didn't really answer, but I would guess he went through 2008/2009. He was definitely too young for 1987 and 2000, which I experienced.

I think you should look for a fee only financial planner who can provide guidance to satisfy both DH and you. And roll DH's 401k into an IRA if he is stuck with ML.

*lots of good posts while I was typing this.

 

[FREE866]

Husband is retired. I am retiring in October.
We have been calculating our sources of income without including the $100K.
We think we have enough to retire with reasonable comfort.
The 100K has been there for emergencies.
We have discussed putting it into CDs.

Yeah, if you want/need access to it very short term then treasury bills and CD's are way to go IMO.
Thats a heck of a lot to just have on the sidelines for emergencies though!

 

[CRLLS]

FWIW, I just opened an online savings account at Discoverbank.com. It is currently paying 1.7%. It is FDIC insured. They also pay a bonus of $150 for deposits of $15k and $200 for 25k. There is no penalty for any withdrawal (there is no early withdrawal). CD's will generally cost you 3-6 months interest if you withdraw early. There are other online banks they do similar deals, some pay higher rates. Assuming that you open one @ 25K and DH opens one @25K, at the end of a year that 50K would be $51,250, the equivalent of a 2.5% interest. Do that at DiscoverBank and one other online bank, you would have a safe, insured nest egg with a terrific interest rate and no withdrawal penalties. Rinse and repeat next year.

I understand the security you seek. I did the same over several years, each year depleting some of the money for living. I never sought out higher interest even though there were better places to keep the money. Access with minimum hassle was primary to us at the time.

 

[RunningBum]

How could you even put that 100k in your 401k? Run away.

 

[audreyh1]

Husband is retired. I am retiring in October.
We have been calculating our sources of income without including the $100K.
We think we have enough to retire with reasonable comfort.
The 100K has been there for emergencies.
We have discussed putting it into CDs.

It's just fine having $100K in cash available for whatever. I recommend putting it in a high yield savings account which is FDIC insured. Many are paying at least 1.7% which is actually better than many short-term CDs and most treasuries right now.

Ally Bank is still offering no penalty CDs 11 months at 1.85% for $25K min. You can lock in the rate for 11 months, yet redeem the CD at any time without penalty.

Wow - that ML "advisor" sounds toxic. Not to mention the nasty bullying.

 

[SunBlueSky]

I, too, like having a big cash stash. I do keep most of mine in CDs, MM, and high yield savings.

 

[easysurfer]

Sounds like the ML Advisor is pulling a Suze Orman. That is, scolding the clients telling them how to use the money.

I would part ways and remind the advisor who is working for who.

 

[Sunset]

How could you even put that 100k in your 401k? Run away.

+1
Exactly what I thought when I read it.

OP - your 100K should be in a high paying account, besides the ones suggested already. Ally is an online bank, FDIC insured, pays 1.6% on the savings account, and has CD's paying more.

I have found ally very easy to use, and I pull money into it from my regular bank checking account (where it earns 0% interest) , I also use Ally to send the money to my checking account when needed.

 

[Cayman]

Obviously the FA has got to go. Yes we keep 10+ years in cash.

The cash question centers on your (and your DHs) risk tolerance and personal circumstances.

You might ask yourself how long $100k will last you in a downturn. Do you have secure, stable sources of income/wealth or will you be forced to sell equities at losses in a downturn?

The topic of cash has come up here several times in the past year, and AAs vary based on risk tolerance and individual wants and needs. Some who have heavy cash AAs say they've won the race and sleep well, no need to take on more risk to earn more $.

 

[njhowie]

Any advice regarding leaving ML, changing to a new financial advisor?

Would you recommend I invest the 100K? Does anyone believe in keeping some money in cash?

1. Open an account with Fidelity, and initiate the transfer of the 401K to Rollover IRA. Fidelity will handle all/most of it for you.
https://www.fidelity.com/go/401k-rollover-hub

2. Open a new cash management account and transfer the $100k
https://www.fidelity.com/cash-management/fidelity-cash-management-account/cash-management-ov

Absolutely no reason for an advisor ever to be pushy. There are so many good alternatives out there today.

Depending on your financial situation, your comfort level and risk tolerance, keeping $100k in cash may be perfectly fine. Considering that ML basically pays nothing on cash, your comeback to the advisor might be "I'm going to move it where I will be paid something for holding cash".

 

[DrRoy]

You should not ever be pressured like that by a FA. If the $100K fits in with your overall AA then it is fine. I support consolidation with Fido.

 

[socca]

When I was just starting my career 30+ years ago, I had three consecutive ML brokers / "financial advisors" in three different states. They were all predators. The final straw was when the last ML FA yelled at me because I asked about investing in U.S Treasury bonds - she said that "no one" buys those bonds. I quickly transferred my account to Charles Schwab. Of course, back in those days I had very little money so my account transfer was probably hardly a blip on her radar. I've had most of my assets at Vanguard for many years - no (major) complaints.

Now that Bank of America owns ML, the two financial institutions I dislike most have been combined into one convenient package.

 

[Aerides]

I would open an account with Fido today - you can call them up, give them your ML account info and they will do the rest. You never have to speak to that ML FA again, you're done, you get to ghost them.

However, I would find out who your FA's bosses are, and report this incident. Take the time now to write down any specific things she said, that you can quote.

And keeping a cash stash is a good idea, it's called an emergency fund. Of course hopefully it's in CD's or a high yield bank account, getting you at least 1.5% (or whatever the starting rates are currently).

 

[jesaco]

My Nieice was with ML and she kept complaining why her money does not grow inspite of the ten year bull market. When she decided to let me look at her account, I saw they put her on front load funds (5.9% front loaded) and with 1-2 morningstar rated funds.

She thought she needed a FA since she know almost nothing about investing. Finally, I helped her move her money to Vanguard and invest them in Index funds. Now she's happy...

 

[GalaxyBoy]

When I was just starting my career 30+ years ago, I had three consecutive ML brokers / "financial advisors" in three different states. They were all predators.

...

Now that Bank of America owns ML, the two financial institutions I dislike most have been combined into one convenient package.

I could have written the above, verbatim. In my case, I followed my last ML person to Raymond James when he moved jobs, until one day I realized just how much he was talking my naive self into churning the account and I moved it all to Schwab, where I still am today.

I wouldn't even bother discussing anything about leaving with this ML person; just initiate the transfer from the other institution, whichever one you choose.

I always figure with these full-service, full-fee relationships I'm the one getting "broker."

 

[SumDay]

We also had bad meeting experiences with ML, along with Fisher and a Dave Ramsey "approved" consultant.

Through this board, I learned about fee only advisers and found ours here: https://www.napfa.org/

We meet with here every other year for a tune up, and she charges us $450 for a thorough review and rebalancing suggestions in our Vanguard accounts. It saves us five figures each year, so it's not exactly chump change to pay ML or someone similar 1% annually to 'manage' your account.

And, I too have $100K in cash at Ally. Our fee only adviser loves it, as do we.