Hi! Ameriprise client needing advice...

[target2019]

Quote:

Originally Posted by cucumber Wouldn't I just be able to roll it over to Vanguard in kind? When I call Vanguard, they should be able to advise me on the best and most tax-efficient method, right?

I think Vanguard will only go so far in advising you on tax matters. For instance, if VG fund states "tax-efficient" they will say tax-efficient! As far as you bringing taxable investments to them in a taxable brokerage, Vanguard will let you know if you can bring the investment, but they can't really give you tax advice.

[travelover]

Quote:

Originally Posted by cucumber ............Wouldn't I just be able to roll it over to Vanguard in kind? When I call Vanguard, they should be able to advise me on the best and most tax-efficient method, right?..........

To roll over in kind, the exact same investment must be available at the new location (i.e. Vanguard). Ameriprise may have their own unique product. This is only a concern for after tax accounts, not IRAs or other tax deferred accounts.

[Ready]

Cucumber, you will need to analyze how much capital gains you have in your taxable accounts and what the tax hit will be if you sell all the funds and move them into Vanguard index funds. This shouldn't be too difficult to do. Sadly, with all the fees you've been paying, I suspect the gains won't be so significant that you will need to pay all that much in taxes to make the move.

Worst case if you move all tax sheltered accounts asap, and sell the taxable funds over a couple of years to spread out the gains if need be.

[pb4uski]

Quote:

Originally Posted by Ready Cucumber, you will need to analyze how much capital gains you have in your taxable accounts and what the tax hit will be if you sell all the funds and move them into Vanguard index funds. This shouldn't be too difficult to do. Sadly, with all the fees you've been paying, I suspect the gains won't be so significant that you will need to pay all that much in taxes to make the move. Worst case if you move all tax sheltered accounts asap, and sell the taxable funds over a couple of years to spread out the gains if need be.

+1 I was thinking the same thing. You need to figure out what the proceeds would be to liquidate each holding (considering back end fees and most importantly taxes). Then transfer/move in kind if possible all those where there is no or little cost. For those with significant cost you may need to cherry-pick and do it over time, wait for back-end fees to expire, etc.

[Texas Proud]

Quote:

Originally Posted by Ready Cucumber, you will need to analyze how much capital gains you have in your taxable accounts and what the tax hit will be if you sell all the funds and move them into Vanguard index funds. This shouldn't be too difficult to do. Sadly, with all the fees you've been paying, I suspect the gains won't be so significant that you will need to pay all that much in taxes to make the move. Worst case if you move all tax sheltered accounts asap, and sell the taxable funds over a couple of years to spread out the gains if need be.

One of the points of moving to Vanguard is to CHANGE FUNDS!!!!

The funds have high fees... sure, you want to do it as cheaply as possible, so you might have to time when you close out of a fund and move it to another, but I would not want to keep any of my money in the funds you have over the long term....

[2B]

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Originally Posted by cucumber The other thing that struck me as annoying was when I mentioned that I might want to move some of our monies to a low-cost fund at Vanguard and the FA's response was that we could but we'd have to do it all ourselves and she wouldn't advise us on any of it. But isn't that why we pay her the annual fee of $750 so that she can manage our finances whether it be at Ameriprise or not? Because I would think she would need to advise us by taking into account all of our monies in total as opposed to just the money at Ameriprise in order to give us an accurate financial plan... Still waiting on a response from her in regards to the fund comparisons she made in her meeting.

You are way overworking this. MOVE YOUR MONEY. I can't believe you have a $750 annual fee on top of all the high cost fees you are paying. We've all been trying to tell you over and over that your FA provides no value to you now that you know you can do it yourself.

From an early post you only have $50K in taxable money there. This can't generate a crushing level of capital gains to pay in one year. One of the big reason to move to Vanguard is to get access to the low fee funds. It makes no sense to move "in kind" and continue paying the high management fees.

Your FA will never "agree" that you should move your money to Vanguard. However, keep on pestering her and she may tell you to move to get rid of you.

[nwsteve]

Given your FA's slow response to fulfilling her commitment to get the info you asked, I suspect you are already headed for the door. She is probably hoping to get your assets in her numbers till the end of the quarter when sales performance is often measured for roles like hers.
Do the same favor she did for you when you put you in a front end loaded fund at 5.5%. Call Vanguard and start the move and see if you can get it done before the end of the quarter. ;-)
Nwsteve

[Ready]

Maybe I'm just being crazy, but if the 5.5% front end load was not properly disclosed to me, I would demand that it be refunded to my account. That will bring the relationship to a head very quickly.

[samclem]

Quote:

Originally Posted by Ready Maybe I'm just being crazy, but if the 5.5% front end load was not properly disclosed to me, I would demand that it be refunded to my account. That will bring the relationship to a head very quickly.

It was probably disclosed, if not in the fine-print of the documents that were actually signed, it was part of the clause that said "I agree to the terms set forth in the 35 page microtyped ACFA*" .

Step one would be to set up an account at Vanguard today. Just a regular non-IRA Money Market account. Then drop by Ms. "Now I can't be bothered" FA's desk and stop any reinvestment of interest/dividends/CG from the existing Ameriprise accounts and have them sent to the Vanguard account. That stops the bleeding and lets the FA know that the game is over. Then take a look at all the funds with Ameriprise and see if there are any expiring back-end loads, CGs that are about to go over the 1 year mark, etc, or any other reason to wait a little longer--probably not. Then, as nwsteve suggested, get as much as possible out of there before the end of March.
After the funds are out, I'd see the branch manager about a prorated refund of the $750 advisors' fee for this year. Start nice: "This was a good first step for me, and got me started with investing. But, I came to see that the fees were more than I needed to pay, and that the advice did not put my interests first. I would like a refund for the unused portion of the year of advising I paid for." If that doesn't work, make a stink about telling your friends at work, that you'll be sure to comment on Angies List, and that you intend to write a letter to state regulators about not being told about the load and being shown misleading comparison information.


* Ameriprise Customer Fleecing Agreement

[cucumber]

Quote:

Originally Posted by Texas Proud One of the points of moving to Vanguard is to CHANGE FUNDS!!!! The funds have high fees... sure, you want to do it as cheaply as possible, so you might have to time when you close out of a fund and move it to another, but I would not want to keep any of my money in the funds you have over the long term....

I think you have a good point!! I'll probably end up just moving all my money over to Vanguard. Haven't decided on if I want to just suck it up and pay the back-end fee or leave it at Ameriprise until the back-end fee expires. This whole thing is a mess but on the bright side, I learned my lesson and I learned to save.

Quote:

Originally Posted by 2B You are way overworking this. MOVE YOUR MONEY. I can't believe you have a $750 annual fee on top of all the high cost fees you are paying. We've all been trying to tell you over and over that your FA provides no value to you now that you know you can do it yourself. From an early post you only have $50K in taxable money there. This can't generate a crushing level of capital gains to pay in one year. One of the big reason to move to Vanguard is to get access to the low fee funds. It makes no sense to move "in kind" and continue paying the high management fees. Your FA will never "agree" that you should move your money to Vanguard. However, keep on pestering her and she may tell you to move to get rid of you.

Thanks for the tough love! haha! I really appreciate your advice and I'm 99.9% sure that's where I'm headed. You made very valid points. After you mentioned it, I thought about it and it doesn't make sense to move the funds "in kind". Thanks for setting me straight and for your wisdom!!

Quote:

Originally Posted by nwsteve Given your FA's slow response to fulfilling her commitment to get the info you asked, I suspect you are already headed for the door. She is probably hoping to get your assets in her numbers till the end of the quarter when sales performance is often measured for roles like hers. Do the same favor she did for you when you put you in a front end loaded fund at 5.5%. Call Vanguard and start the move and see if you can get it done before the end of the quarter. ;-) Nwsteve

I like the way you think!! She actually got back to me tonight. She didn't provide all the info that I asked for though. We did multiple comparisons but she only sent one of them. She said the file was too big. Really?!?! It was maybe 20 pieces of paper at most. Anyway, the comparison she sent was MFS International Value C (MGICX) vs the Vanguard International Value Inv (VTRIX). The MFS fund which she has me invested in appears to be performing better than the Vanguard fund. I'm guessing this is why she chose to send this one and not the other ones that we compared. Either way, I'll probably be calling Vanguard by the end of the week.

Quote:

Originally Posted by samclem It was probably disclosed, if not in the fine-print of the documents that were actually signed, it was part of the clause that said "I agree to the terms set forth in the 35 page microtyped ACFA*" . Step one would be to set up an account at Vanguard today. Just a regular non-IRA Money Market account. Then drop by Ms. "Now I can't be bothered" FA's desk and stop any reinvestment of interest/dividends/CG from the existing Ameriprise accounts and have them sent to the Vanguard account. That stops the bleeding and lets the FA know that the game is over. Then take a look at all the funds with Ameriprise and see if there are any expiring back-end loads, CGs that are about to go over the 1 year mark, etc, or any other reason to wait a little longer--probably not. Then, as nwsteve suggested, get as much as possible out of there before the end of March. After the funds are out, I'd see the branch manager about a prorated refund of the $750 advisors' fee for this year. Start nice: "This was a good first step for me, and got me started with investing. But, I came to see that the fees were more than I needed to pay, and that the advice did not put my interests first. I would like a refund for the unused portion of the year of advising I paid for." If that doesn't work, make a stink about telling your friends at work, that you'll be sure to comment on Angies List, and that you intend to write a letter to state regulators about not being told about the load and being shown misleading comparison information. * Ameriprise Customer Fleecing Agreement

You're correct!! The 5.75% fee was never told to us but probably was in the documents we signed. I just think that is a sleazy thing to do... It's our fault though, even though we trusted her, we should know what we are signing.

Thanks for the tip on stopping the reinvesting of dividends, interest & CG. I didn't even think of that. I'll contact her and let her know to put a stop to it.

I'm so excited for this whole ordeal to be over!!!!

[cucumber]

Quote:

Originally Posted by clifp If you have any more comparison of Amerprise vs Vanguard fund to make I am sure we can help provide a different view.

The one and only comparison that she sent to me so far is MFS International Value C (MGICX) vs Vanguard International Value Inv (VTRIX).

[2B]

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Originally Posted by cucumber I'm so excited for this whole ordeal to be over!!!!

Just do it!

[ERD50]

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Originally Posted by cucumber ... She didn't provide all the info that I asked for though. We did multiple comparisons but she only sent one of them. She said the file was too big. Really?!?! It was maybe 20 pieces of paper at most. Anyway, the comparison she sent was MFS International Value C (MGICX) vs the Vanguard International Value Inv (VTRIX). The MFS fund which she has me invested in appears to be performing better than the Vanguard fund. I'm guessing this is why she chose to send this one and not the other ones that we compared. ...

I'd say that's a pretty good guess! Funny one, 'the file's too big, the dog ate my homework, and the sun was in my eyes, I spilled coffee on my keyboard,.... but I'll manage to send you this one that did better!'.

Gotta wonder if that was the only one 'worth' sending to you out of twenty? And did it reflect her 1% fee, or just the fund performance itself?

Here's a chart of those two including divs (drag the slider to adjust time frame to full history).

PerfCharts - StockCharts.com - Free Charts

Depending on the time frame, they track fairly close and trade top position back-forth. MGICX has done better since about 2011 though. Kind of a mixed bag overall, but really pretty decent. Whether that recent performance holds going forward is anyone's guess. And that was likely the 'best' of 20 - not very impressive, luck should provide at least a few hot picks.

If you are curious, devious, or just might be entertained (I'm all three!), you might want to call her back and say thanks for that chart, it really was very impressive, maybe I was hasty, can you send me the other 19, one at a time since that file was not 'too big'?

At this point, I suspect she will ignore you and move to greener pastures. You now know too much to be of value to her. Congrats!

-ERD50

[target2019]

Quote:

Originally Posted by cucumber The one and only comparison that she sent to me so far is MFS International Value C (MGICX) vs Vanguard International Value Inv (VTRIX).

Keep in mind that the results vary over different time periods. Then subtract your AUM fee, and any loads you paid. Those are not on the chart, I assume.

[easysurfer]

Quote:

Originally Posted by cucumber ... She actually got back to me tonight. She didn't provide all the info that I asked for though. We did multiple comparisons but she only sent one of them. She said the file was too big. Really?!?! ... I'll probably be calling Vanguard by the end of the week. I'm so excited for this whole ordeal to be over!!!!

I think that not having ready access to all the info is reason enough to look elsewhere. As you can tell by that, you are just one client of many that she has and the "help" that you pay for isn't really so personalized.

You'll have a huge load off your shoulders when you move to Vanguard. Consider the fees you paid to her an investment and learning experience. Many of us have been there before we saw the light. Congrats!

[pb4uski]

Quote:

Originally Posted by cucumber ....Haven't decided on if I want to just suck it up and pay the back-end fee or leave it at Ameriprise until the back-end fee expires. This whole thing is a mess but on the bright side, I learned my lesson and I learned to save. .....

While it may be obvious, assuming the performance of the underlying fund investments is similar, take the back end fee and divide it by the difference in the annual expense ratios to get the number of years that before you would break even. If there are account maintenance charges on top of expense ratios be sure to take that into account as well.

[pb4uski]

It is really easy to compare tickers you own to the Vanguard alternative you are considering (you'll have to research and decide that yourself) for 3, 5 and 10 year periods on M*.

[cucumber]

Even after a reminder to send the comparisons, my FA still hasn't done so and sent some other info instead. So I started the process to move the funds. Unfortunately it will take 42 days because Ameriprise takes so long with all their requirements. So I won't be able to move my funds out by the end of the quarter which I'm bummed about. But I am moving on and going with Vanguard!!! I decided to just put it in the target retirement fund for now until I figure out where I want it. I figured its a safe place to put it until I learn more and decide how to invest it. I just want to thank everyone for their feedback and support!!! I'm almost Ameriprise-free!!!!!

[Ready]

Congratulations! I know that was a big step for you. I think the target retirement fund is just fine. In fact, I suspect the worst Vanguard fund is still better than the best Ameriprise fund, so I don't think you can go wrong with whatever you do with Vanguard. Good luck with everything!

[samclem]

Quote:

Originally Posted by cucumber But I am moving on and going with Vanguard!!! I decided to just put it in the target retirement fund for now until I figure out where I want it.

Good job. Let Vanguard handle the transfer as a "pull" rather than trying to "push" from the Ameriprise end.
Congratualtions on getting started. Expect a call or two from your FA or (possibly) a "new" one. Expect hiccup's with the paperwork and foot-dragging by Ameriprise. You can bet it wouldn't take this long to set up an account, it's inexplicable (right!) that it takes this long for them to close one.