New T. Rowe Price "Summit Program"

[SecondAttempt]

For decades T. Rowe Price has had 2 tiers of "premium" services, Personal Services and Enhanced Personal Services. I have qualified for a very long time and enjoyed a few "perks" like a WSJ subscription, lower fees, and better customer service. It's a lot like Vanguard's flagship service.

Today I got an email that seems to say they are scrapping that system and implementing a new "Summit Program." But the announcement is low on details.

The main benefit they advertise is access to a class of shares with lower fees. That's all well and good but it looks like getting the lower fees would mean selling my shares and buying the new shares. This creates a tax event so I'd have to pay capital gains taxes that would exceed any benefit of the lower fees for several years.

Anyone know anything about this?

All in all I am happy with TRP but this might just be a trigger to switch to Fidelity or Schwab. (Vanguard is out based on a thread her a few weeks ago.)

[marko]

I received the same letter. Id expect some follow up information to come but I sure wouldn't move my assets to another based on this!
90% of my holdings are within my IRA so there's no hit anyway but access to some closed funds can be attractive

[ERD50]

FYI, in the past, Vanguard has been able to switch a customer between their 'Admiral' and 'Investor' class funds, w/o creating a taxable event. This might be similar?

-ERD50

[RetiredAt55.5]

Quote:

Originally Posted by SecondAttempt For decades T. Rowe Price has had 2 tiers of "premium" services, Personal Services and Enhanced Personal Services. I have qualified for a very long time and enjoyed a few "perks" like a WSJ subscription, lower fees, and better customer service. It's a lot like Vanguard's flagship service. Today I got an email that seems to say they are scrapping that system and implementing a new "Summit Program." But the announcement is low on details. The main benefit they advertise is access to a class of shares with lower fees. That's all well and good but it looks like getting the lower fees would mean selling my shares and buying the new shares. This creates a tax event so I'd have to pay capital gains taxes that would exceed any benefit of the lower fees for several years. Anyone know anything about this? All in all I am happy with TRP but this might just be a trigger to switch to Fidelity or Schwab. (Vanguard is out based on a thread her a few weeks ago.)

I got the email too. I have most of our money at Vanguard, but a little bit at TRP.

I just wanted to add that Vanguard has really cut back their Flagship perks, including an assigned rep. Now, it seems they don't care as much about assets. The focus seems to be having customers paying extra for advice.

So, I'm curious about this new program.

[Another Reader]

I have had T Rowe Price Funds at TRP for probably 25 years. Maybe 30. I was looking at consolidating away from them but with the Vanguard news I have decided against it. I still like the funds I own, net of fees the performance has been excellent. Consistently. We will see what Summit adds and subtracts from the relationship.

[UnrealizedPotential]

OP,
If the funds are in an IRA you can exchange from one fund to another without tax implications if you have to do that to get the lower fees. If the funds are in a taxable account, exchanging from one fund to another has tax implications. But I would just call T. Rowe Price and ask them about your situation.

[Amethyst]

We haven't received such a notice. I don't see anything on the TRP web site, either. Probably we don't have enough $ with them.

Like ERD50, to me it sounds like VG's Admiral vs. Index funds - the switch doesn't have tax consequences. We've switched all our accounts to Admiral over time. VG tells us when we can switch.

Edit: During the 2008-2009 crash, some of our VG funds fell below the Admiral threshhold, but VG didn't switch us back.

Quote:

Originally Posted by SecondAttempt For decades T. Rowe Price has had 2 tiers of "premium" services, Personal Services and Enhanced Personal Services. I have qualified for a very long time and enjoyed a few "perks" like a WSJ subscription, lower fees, and better customer service. It's a lot like Vanguard's flagship service. Today I got an email that seems to say they are scrapping that system and implementing a new "Summit Program." But the announcement is low on details. The main benefit they advertise is access to a class of shares with lower fees. That's all well and good but it looks like getting the lower fees would mean selling my shares and buying the new shares. This creates a tax event so I'd have to pay capital gains taxes that would exceed any benefit of the lower fees for several years. Anyone know anything about this? All in all I am happy with TRP but this might just be a trigger to switch to Fidelity or Schwab. (Vanguard is out based on a thread her a few weeks ago.)

[youbet]

Quote:

Originally Posted by UnrealizedPotential OP, If the funds are in an IRA you can exchange from one fund to another without tax implications if you have to do that to get the lower fees. If the funds are in a taxable account, exchanging from one fund to another has tax implications. But I would just call T. Rowe Price and ask them about your situation.

Switching from one class of a fund to another
class of the same fund has been tax free in my experience. Selling one fund and buying another does create a taxable event.

[MRG]

Quote:

Originally Posted by youbet Switching from one class of a fund to another class of the same fund has been tax free in my experience. Selling one fund and buying another does create a taxable event.

+1
The Class is an attribute of the Fund. It's not a separate Fund, therefore it's not taxable. If you exchange or redeem and purchase those transactions are taxable assuming its in a taxable account.

[RetiredAt55.5]

Quote:

Originally Posted by Amethyst We haven't received such a notice. I don't see anything on the TRP web site, either. Probably we don't have enough $ with them. Like ERD50, to me it sounds like VG's Admiral vs. Index funds - the switch doesn't have tax consequences. We've switched all our accounts to Admiral over time. VG tells us when we can switch. Edit: During the 2008-2009 crash, some of our VG funds fell below the Admiral threshhold, but VG didn't switch us back.

I don't seem to qualify either for the lower shares, since you need $500k and $50k in a single fund. I do meet the second part, so I guess they're hoping I'll move money over.

https://www.troweprice.com/personal-...t-program.html

[Souschef]

I have an account at TRP, and they switched my shares.

[Amethyst]

Yes, they don't exactly say "Bring us more money!" but it's pretty clear that's what's wanted. And that would create a taxable event, unless it was coming from a money market fund or cash account.

Quote:

Originally Posted by RetiredAt55.5 I don't seem to qualify either for the lower shares, since you need $500k and $50k in a single fund. I do meet the second part, so I guess they're hoping I'll move money over. https://www.troweprice.com/personal-...t-program.html

[SDFarmer]

Anybody have luck switching on the website yet? It will let me buy a closed fund (hello New Horizon!), but I don’t have the option to switch to I class yet on two funds that qualify. I know the date is supposed to be the 15th, but since it let me purchase a closed fund I would think it all would be active.

[SDFarmer]

Follow up to my post above:

Called T Rowe today and was told that for clients who qualify, the funds will automatically convert to I class by first of the year, if not before. Any fund with 50k will convert unless you opt out. Can do it at any time if you call in. He acknowledged the details and follow up have been lackluster and I wasn’t the first to call today about it.

To sum up: 500k to qualify, 50k for a fund to convert, not a taxable event.

[marko]

Quote:

Originally Posted by SDFarmer Follow up to my post above: Called T Rowe today and was told that for clients who qualify, the funds will automatically convert to I class by first of the year, if not before. Any fund with 50k will convert unless you opt out. Can do it at any time if you call in. He acknowledged the details and follow up have been lackluster and I wasn’t the first to call today about it. To sum up: 500k to qualify, 50k for a fund to convert, not a taxable event.

Thank you for the follow up! So this will occur automatically? Sweet! By my figures this should put about $6k to my bottom line in reduced fees.

[SDFarmer]

Quote:

Originally Posted by marko Thank you for the follow up! So this will occur automatically? Sweet! By my figures this should put about $6k to my bottom line in reduced fees.

That is what I was told. I asked twice to make sure! Also double checked on it being taxable, as mine are in non-retirement accounts and was told it wasn’t.

I thought about doing it on the phone, as it would bump my distributions up a little bit this year, but I figured I’d play it safe and just let them do it when it’s time. I’m paranoid about screwing something up by doing things off schedule like that lol.

Slightly off topic: Looking at the benefits, I don’t see the WSJ online listed anymore. Mine still works though.

[marko]

Quote:

Originally Posted by SDFarmer That is what I was told. I asked twice to make sure! Also double checked on it being taxable, as mine are in non-retirement accounts and was told it wasn’t. I thought about doing it on the phone, as it would bump my distributions up a little bit this year, but I figured I’d play it safe and just let them do it when it’s time. .

My charts didn't show changing the distributions but I'll have to go back and check...seemed that the same funds would show the same distributions. (?)

Edit: I found that the distributions on my 2015 fund were less under the I Class but everything else was the same.

[SDFarmer]

Quote:

Originally Posted by marko My charts didn't show changing the distributions but I'll have to go back and check...seemed that the same funds would show the same distributions. (?) Edit: I found that the distributions on my 2015 fund were less under the I Class but everything else was the same.

Capital Appreciation is .04 more on dividends, but same on CG I think, International discovery is a little more on STCG but same on the rest. Small amounts like that.

[marko]

Quote:

Originally Posted by SDFarmer Capital Appreciation is .04 more on dividends, but same on CG I think, International discovery is a little more on STCG but same on the rest. Small amounts like that.

If I'm reading it correctly, my distributions get cut by about 40% on Target 2015 fund if I go to Class I. Hmmmmm. The fee reduction sure doesn't make up for that much!

[SDFarmer]

Quote:

Originally Posted by marko If I'm reading it correctly, my distributions get cut by about 40% on Target 2015 fund if I go to Class I. Hmmmmm. The fee reduction sure doesn't make up for that much!

Yeah it looks like the target date funds are all like that on the preliminary distribution page. Regular I class funds are essentially the same as investor class, just a few cents more here and there. I’d ask what the difference is. You would think it would be basically the same holdings.