Should we stay

[Car-Guy]

Take your money and run. I've never heard of such a demand. Seems you are doing better without him anyway.

 

[bmcgonig]

There's one reasonable possibility here, although it's unreasonable that he wouldn't tell you, that there is a minimum amount for investment. I know one company that has a $2m minimum. Less than that and you don't get "full service" it's possible that he is part of that full service. I know the management of this company and they feel that clients under 2m don't cover costs.

So in your case maybe the minimum is 1m and your non 401k assets are close or under that?


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[JPatrick]

You have not said where the advisor has your money invested, but I'd bet we are talking about load funds which could probably be replaced by a like no-load fund that would give you better performance at a lower cost.
If your passive 401K is outperforming the advisor, it is time for a change for sure.
IMO, Vanguard or Fido is the way to go, whether you DIY or use their advisory services.

 

[athena53]

The only issue with moving a large amount in a taxable account is possible tax consequences.

Yes, you would have to find out exactly how various things would be moved. If it's stock in Apple or a standard mutual fund, they should be able to move it to the new firm with no tax consequences at all. If it's a weird proprietary fund that the current firm offers but the new one doesn't, they may want to liquidate it and just move the cash, which WOULD have tax consequences. A customer service person at the new fund should be able to answer your questions on that.

 

[Texas Proud]

There's one reasonable possibility here, although it's unreasonable that he wouldn't tell you, that there is a minimum amount for investment. I know one company that has a $2m minimum. Less than that and you don't get "full service" it's possible that he is part of that full service. I know the management of this company and they feel that clients under 2m don't cover costs.

So in your case maybe the minimum is 1m and your non 401k assets are close or under that?


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Then why have the account for so long when it was not that large


I think the FA is getting greedy.... and a greedy FA is one you do not want... if they cannot make money by investing your money like they would invest their money.... well, bye-bye....


Then again, as I and others have said, some FA are really bad at their own investments.... so even the above might not be the way to go...

 

[bmcgonig]

Then why have the account for so long when it was not that large

...

Possibly because the initial understanding with the firm was to take 401k under management as well. What say you OP?


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[Birchwood]

Hey, this is an epiphany, and this is your chance to set yourself free from this idiot. Also, this is time for you and your husband to learn how to do it yourself
and profit from it, and anyway, you need to do it to take care of yourself. Only you can do the best job if you study it.

Study and read all you can. Then get the whole amount out of the firm and just invest it yourself with Vanguard or Fidelity. With that amount, somebody from these firms will even advice you for free. They may even facilitate the transfer...

I consider using a FA a complete waste of time and energy. I don't know how much you pay for it, but most charge 1% of the whole amount in good and bad times. In hypothetical 40 years, you will lose 40% of your asset.

My advice is to do it yourself. Just me, I consider taking care of my portfolio a core pursuit or part time job in ER. It's like a hobby farm, but I only have to use a computer, a phone and bunches of notebooks.

 

[Rothman]

Absolutely leave, low- cost broad index fund portfolio can be established with little research and fidelity or vanguard will treat you well. Congrats on retirement


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[RunningBum]

Possibly because the initial understanding with the firm was to take 401k under management as well. What say you OP?

I think you are reaching.

 

[RunningBum]

In addition to any management fee, what are the fund expense fees for your investment with this fee? You may have done well with the firm, but could be doing even better on your own or with a lower cost advisor.

 

[travelover]

How much are you paying a year to have them manage your money?

In addition to any management fee, what are the fund expense fees for your investment with this fee?.........

I suspect the OP does not know the answer and would be somewhat shocked to see it expressed as a $/year figure.

 

[bmcgonig]

In addition to any management fee, what are the fund expense fees for your investment with this fee? You may have done well with the firm, but could be doing even better on your own or with a lower cost advisor.

Some places have 0 fees. The 1% pays for everything. Im not recommending a 1% company. Just that there are many ways these firms work.


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[KrissK]

Here's another GO vote. You appear to be much milder mannered than me. You can do this yourself and it will save yourself $$$. All the other responses represent good insight.

 

[Dog]

DH and I left a FA and moved my IRA to Vanguard (thanks to reading and learning from this forum). We were paying about 1% year, but they were about to increase the cost. I looked at what I had paid them over the years and decided it was time to move it to Vanguard. I just kick myself for the five years that they managed the investment. I chalk it up to the cost of "live & learn".
Another GO vote here.


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[Donzo]

If you have over 1 million with Vanguard you are a Flagship member and get free suggestions from a financial advisor - no sales stuff.

I would have smiled at this guy, shook my head and left. Move your money for sure IMO. Report his behavior to management and tell them he will cause others to run to Vanguard or other advisors. How this man thought he could strong arm clients is beyond comprehension. If I were an advisor - keeping the client happy and confident in my service would be #1 - not my personal income. Or at least I would not be so obvious

Fire the bum!

 

[nwsteve]

If you have over 1 million with Vanguard you are a Flagship member and get free suggestions from a financial advisor - no sales stuff.
Fire the bum!

Any portfolio over a one Million $ makes you eligible for Private Client status at Fidelity. You get no cost, non-selling dedicated advisor and support team. Many if not most of the advisors are CFP. If you prefer personal touch, most large metros have a Fidelity office. You can buy any ETF at 7.95 and choose from a large selection of no-load mutual funds.
Nwsteve

 

[retire2020]

The meeting went as usual for the first 15 minutes and then he told us if we didn't put my husband's 401K into an account with his company he would no longer be our financial advisor.

I believe this is financial blackmail and my first instinct is to leave but we have really liked the ease of someone looking over our finances and doing a decent job of it. We like him and have felt comfortable dealing with him.

If I were you, I would've dumped him the second he threatened me! How rude! Instead of appreciating your business he pulls this on you.

 

[NBS54]

Well I've heard the why didn't you just leave the meeting many, many times in the last few days. We had an extended family dinner and Monday morning is our coffee time with friends. I'll admit we probably are too nice.

Right now I'm just afraid. This guy is in control of most of our money. We're not taking SS yet and although we have some money in our control including the 401K which we could live on for 4 to 5 years. We retired thinking taking money from the account he manages was going to be retirement income. We have received two auto deposits so far and being a fiduciary and licensed we hope we will continue to receive deposits until the accounts can be transferred. I thought retirement was looking good and one greedy jerk can really mess it up. Transferring funds is not going to be fun but my husband and I are both educated and I know we can do it. I'd just rather be on vacation.

I emailed the Wealth Enhancement office with my complaints and have yet to hear back from them. I really want them to look at their web page which says they are:
Dedicated to Building Life-long Partnerships


I can't believe I bought into this. I really thought I was a good judge of character.

For those who asked I can't tell you the exact amount we've paid to them over the last years. And no, no one told us we were expected to turn the 401K over to them. If they need clients who have a portfolio which is over 2 million to make money why did they take us in the first place?

This has been a real disaster for me. I wake up in the night worrying about money which is something I've never done before. We're looking into Vanguard but it's not going to be easy to transfer everything.

Who knows if I ever hear anything from the main office but I'll let you know if I do.

N

 

[Walt34]

When I transferred my 457 funds (similar to 401k) to an IRA at Vanguard it was easy. I called Vanguard, the guy there set up a conference call with Fidelity, where the 457 was, and confirmed with Fidelity that I was me and wanted to move the funds. A week later I get the check, made payable to Vanguard and "For benefit of Walt34" or similar language, and I mailed that to Vanguard.

There was some paperwork to fill out for the account, naming beneficiaries and the like, but not terribly onerous. I maybe spent 30 or 45 minutes on the process all told. Not at the same time though.

The reason I moved the funds was that Vanguard's fees were significantly lower than Fidelity's, at least on the 457 account.

The hardest part is simply overcoming the inertia to do it.

 

[MRG]

NBS54,

These folks are FINRA/SPIC members, relax. They may hit you with some miscellaneous fees, they will soon be a distant memory! Relax, take a deep breath, you've already done the hardest part.

 

[KrissK]

NBS54 - Please don't blame yourself. This is not your fault at all. This guy was thrilled to manage your 1 million dollar account...He just got greedy. Try not to worry. This will all be behind you before you know it.

 

[REWahoo]

NBS54 - Please don't blame yourself. This is not your fault at all. This guy was thrilled to manage your 1 million dollar account...He just got greedy. Try not to worry. This will all be behind you before you know it.

+1

This forum is sprinkled with stories very similar to yours, folks who saw the light and took the necessary steps to make a change for the better.

 

[hnzw_rui]

When I transferred my 457 funds (similar to 401k) to an IRA at Vanguard it was easy.

The reason I moved the funds was that Vanguard's fees were significantly lower than Fidelity's, at least on the 457 account.

The hardest part is simply overcoming the inertia to do it.

Interesting. I probably wouldn't do this until I turn 59.5. Govt 457b is probably the most ER friendly tax deferred plan available. Heck, even when I turn 59.5, there's a good chance I still won't rollover funds from 457 to IRA. Of course, aside from ERISA protection, it probably helps that we have both a stable value fund and VIIIX in our 457 plan, not to mention a brokerage option that gives me access to Vanguard funds and ETFs.

 

[Walt34]

Interesting. I probably wouldn't do this until I turn 59.5. Govt 457b is probably the most ER friendly tax deferred plan available.

For me it was neutral so it didn't matter. I haven't taken anything from it and don't plan to for a while. It is part of the safety net for DW if I get The Big Ache before she turns 66 and can take her full SS, right around the time I have to take RMDs from it. Oh well, first world problem.

 

[Texas Proud]

To OP...

What would make them think they can get your 401(k) now... that is usually an asset that is held until the person retires in their 60s...

And there are protections that come with the 401(k) that do not come with an IRA...



But, your biggest problem will be potential taxes... unless you can get Fidelity or Vanguard to take your holdings as is, you might owe a big cap gain.... if that were true, I would spread it out unless they decided to hit me with big fees for having a small account... and it would be smaller as I would move everything I could that did not have a tax attached...

Take your time.... no rush... just make sure the FA cannot do anything without your permission....