Still Moving From Merrill Lynch

[AlmostDone]

I really appreciate all that I have learned here and the help you all have given us already. We just have a few more ML funds to get out of and I've been waiting until the back-end fees are gone. Can someone tell me if I am correct in the following:

ML advisor put $85,000 in ML Global Allocation fund on 12/18/03 with a 6 year (6%) back-end load. ER is 1.86%. We just passed year 3, so the load should now be 3%. At 1.86% ER for 3 years on $85,000, we will be paying $4,743. This year the fund returned 13.7%.

VG International Stock Index has an ER of .31%. If we move it now, the ER fee for the next 3 years would be $790. This year the fund returned 22.9%.

Difference in ER expense for 3 years would be $3953 (we would save). Fee to come out of ML now would be 3% of 85,000 = 2550. Net savings = $1403.

Is this correct? The VG fund has beaten the ML fund every year for the past 4.

 

[FinanceDude]

Yes, the ER is a lot higher in B shares. You will pay 3% surrender to get out of the ML fund..........or $2550 out of the proceeds.

Don't like ML funds, their expenses are high and performance is

Good luck............

 

[mickeyd]

ML advisor put $85,000 in ML Global Allocation fund on 12/18/03

Has the value not increased since 2003? I'm thinking that your calculations should be based on current value rather than the amount 3 years ago.

 

[AlmostDone]

Yes, 85k is the current value.

 

[2B]

I don't know how to say this nicely....

Get out ASAP. Don't count your "pennies" but get where you need to be. The "full service" brokerages will milk you in ways you can't imagine.

 

[BUM]

I'm with 2B.

When I saw what I was being charged at ML, I thought about a planned exit strategy....finally said. "screw it" and sold out. Run, don't walk to the SELL desk!

 

[mickeyd]

Yes, 85k is the current value.

What a crime! You have basically missed out on the beginning of the entire bull market that we find ourselves in today. Imagine what your $85k would look like in a bear market!

You can' t get out of this awful situation soon enough. Bail out ASAP. LIck your wounds. Count this as one-time tuition for your financial education and I feel that you will never stray again.

 

[AlmostDone]

Actually, we found out today that the sales charge would be 3.5% or more that $2900, because it is between 3 and 4 years. I have 2 questions:

1. Would that fee be on the original amount invested or on the current value?
2. Is there any precedent for a company releasing the funds without the deferred sales charge, based upon this being money that my husband thought this lady was managing for him, not sticking it in a fund for 6 years?

 

[FinanceDude]

Actually, we found out today that the sales charge would be 3.5% or more that $2900, because it is between 3 and 4 years. I have 2 questions:

1. Would that fee be on the original amount invested or on the current value?
2. Is there any precedent for a company releasing the funds without the deferred sales charge, based upon this being money that my husband thought this lady was managing for him, not sticking it in a fund for 6 years?

1)Deferred (back-end charges) are always calculated on the amount invested, not current value...........

2)Doubtful, it is hard to prove the advisor is at fault, particualrly if your husband signed a form stating he was aware of the sales charges. Hard to get an arbitration court to force ML to waive the load...............

 

[mickeyd]

After sending you a prospectus, several semi-annual reports, several annual reports, and numerous statements over the last 3-4 years there is no chance that they would give you a break. They have already given that $ to the sales rep.

 

[FinanceDude]

After sending you a prospectus, several semi-annual reports, several annual reports, and numerous statements over the last 3-4 years there is no chance that they would give you a break. They have already given that $ to the sales rep.

That's not the reason they won't..........if they have the right documentation signed by the client that he was aware of the back-end charges, agreed to the transaction, and the advisor can prove the investment was suitable for the client's account under the "know you client" rules, not much recourse for the beneficiary.

Those rules are set by the SEC and NASD, NOT the advisor..........

 

[2B]

I am almost as obnoxious about ML and the other brokerage firms as I am about annuities. They suck your assets and diminish your wealth. Flee. Flee. Flee.

If they were coming at you with a sword, what would you do. Well, do it now.

 

[73ss454]

A few years ago when I moved my money from AG edwards and ML I kept thinking of Forrest Gump movie.
When the young girl said " Run Forrest Run Run" that's what you need to do.

 

[JustCurious]

Hard to get an arbitration court to force ML to waive the load...............

FinanceDude, please, please do not use the word "arbitration" and the word "court" together. Arbitration is a private process conducted far far outside of the court system by private arbitrators who are not judges and who may be members of the investment industry, and are not obligated to follow the law, and their decisions are not public record, and the consumer does NOT have the right to go to court or to appeal the decision.

 

[FinanceDude]

FinanceDude, please, please do not use the word "arbitration" and the word "court" together. Arbitration is a private process conducted far far outside of the court system by private arbitrators who are not judges and who may be members of the investment industry, and are not obligated to follow the law, and their decisions are not public record, and the consumer does NOT have the right to go to court or to appeal the decision.

Picky, picky..........ok arbitration PANEL..........sheesh........... : : :

 

[JustCurious]

Picky, picky..........ok arbitration PANEL..........sheesh........... : : :

It is far more than an issue of semantics.

 

[Alex]

I too, think you need to bite the bullet and get the heck out of there. You're getting royally scr*wed with underperformance and high fees, a lethal combination. Move the monehy to Vanguard. But, Before you plunk it all into the Vanguard Total International (which is a a fund of funds) You may want to look at their new FTSE World (ex-usa) Index fund. It will be available sometime in the first qtr. Good Luck!

 

[AlmostDone]

We asked our former ML Financial Advisor what the fee would be and whether the fee is on the initial amount invested or the current value. She said she can't tell us what the fee would be because it was invested on 4 different dates. She also said the sales fee is on the current value - 85k as opposed to 59k. We told her we need an amount or we need to know who can give us the amount. Didn't hear back from her today. I can't wait to be finished with them.

 

[2B]

We asked our former ML Financial Advisor ........ Didn't hear back from her today. I can't wait to be finished with them.

You will quickly discover that for any subject that moves you closer to no longer having an account with her will not get a return phone call. Once the bell goes off that you are going to leave, her goal will be to delay the exit/tranfer of assets as long as possible so she will maximize the fees extracted from your account.

She is not your friend. She may not conduct herself in a "professional manner" to delay your assets moving. I suggest you process the transfer papers for where you want your money to go and work at expediting the transfer. You will be amazed at how long ML will tie it up in back office delays.

 

[FinanceDude]

We asked our former ML Financial Advisor what the fee would be and whether the fee is on the initial amount invested or the current value. She said she can't tell us what the fee would be because it was invested on 4 different dates. She also said the sales fee is on the current value - 85k as opposed to 59k. We told her we need an amount or we need to know who can give us the amount. Didn't hear back from her today. I can't wait to be finished with them.

They're being stupid. It's NOT HARD to figure out the CFSC charges. EVERY mutual fund family in America can do it, even Merrill Lynch.........

The sales fee is based on the ORIGINAL investment.........that is an ABSOLUTE TRUTH.........it's right in the darn prospectus.........

Tell her you are out of patience, and you are thinking of lodging a formal complaint against her with the NASD. That should get the ball rolling..........

 

[mickeyd]

I'm confused.

You said this initially :

ML advisor put $85,000 in ML Global Allocation fund on 12/18/03

Then you said this:

sales fee is on the current value - 85k as opposed to 59k.

If you initially invested $85k in 2003, what does the 59k represent?

 

[AlmostDone]

The initial investment was 59k. The current value is 85k. I see that my original statement was inaccurate.

FD, I have checked the ML site and can't find a prospectus for the fund there. Are they usually on-line?

 

[mickeyd]

I see that my original statement was inaccurate.

That makes quite a difference doesn't it?

 

[AlmostDone]

MickeyD,

I'm not sure how it makes much difference, as she is telling us that the fee is on the 85k.

 

[jazz4cash]

MickeyD,

I'm not sure how it makes much difference, as she is telling us that the fee is on the 85k.

You are correct to say it doesn't make a difference.......so move on.

I believe FD is correct and the ML rep is wrong as she only wants to discourage you from pulling the trigger.

In the end, they will have to calculate the correct fee, whatever it is you will still be ahead in the near term...........so MOVE ON.