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-   -   Hi! Ameriprise client needing advice... (https://www.early-retirement.org/forums/f26/hi-ameriprise-client-needing-advice-70411.html)

cucumber 02-02-2014 04:01 AM

Hi! Ameriprise client needing advice...
 
Hi, I am just finding out about this message board and am learning a lot. I need some advice. I am 34 and have been with Ameriprise for the past 7 years. I have been reading posts on here about Ameriprise which made me dig deeper into our investments. My wife and I were suckered into the VUL and quickly figured out it was a total ripoff but now can't get out of it because of the surrender charges, which I was very unhappy about. I don't know too much about investing so we really rely on our advisor to guide us in doing what is best with our money. After reading all these posts though, I have a feeling that might not be the case. So my questions are...

Should I continue with Ameriprise since I am very unsure of how to do it on my own? I really would like to switch to Vanguard but am afraid I won't know what to do or how to invest. Is it possible to move my funds to Vanguard and just keep my Ameriprise advisor and have her advise me on the Vanguard investments? Since we don't have $500K of investments yet, it looks like there might not be many advisors that might want to take us on as clients. I just don't know what to do and I despise paying high fees if it doesn't make sense. Please help!!!

MichaelB 02-02-2014 06:18 AM

Cucumber, welcome to the forum. Here are a couple threads that you may find helpful.

https://www.early-retirement.org/foru...ter-57353.html

https://www.early-retirement.org/foru...ise-61331.html

Texas Proud 02-02-2014 07:52 AM

I will answer your last question....

No, you should not stay with them and invest in Vanguard.... first, I do not think they would do it as they want to get fees from your investments.... but second, it is a bad decision...

Start reading about investing and some of the basic portfolios...

Also, even with a small amount of money you can get investment 'advice' from Vanguard using their risk tool... it is kinda simple, but a good start...


https://investor.vanguard.com/what-w...own?Link=facet

tsoispf 02-02-2014 08:30 AM

Recent Departure
 
We recently walked away from Ameriprise after 13 years. So happy now. Same deal, this community and the folks over at bogleheads.org woke us up to the reality of the fees we were paying for what I feel was sub par service. We chose to go with Fidelity. They have advisor services available too. Although we're doing it advisorless. We could easily have gone with Vanguard though. I hear a lot of good things about either pick.

I highly suggest reading Vanguard's own John Bogle's book "Little Book of Common Sense Investing" and then following that up with some time over at bogleheads website.

Best of luck!

AnIntentionalRoad 02-02-2014 09:25 AM

Welcome!

By far, the most important things you should be doing right now are:
- educate yourself on basic personal finance, IRAs, 401k, having an emergency find, general saving for retirement, stocks vs bond's vs mutual funds, term vs whole life insurance, commissioned vs fee-only advisors, etc
- don't move any money until you've spent 6 months getting some knowledge

There are plenty of introductory personal finance books out there. You could even look at a Suzy Orman or Jean Chatsky type book and watch their shows on TV.

If you don't like reading, tough. Do it anyway, or pay the price in retirement.

travelover 02-02-2014 10:14 AM

Your "adviser" at Ameriprise is not your friend. Your task now is to extricate yourself at the lowest possible cost. They will take a pound of flesh from you out on your way out the door.

The good news is that you can get all the investment advice you need here, at Bogleheads and with some reading.

cucumber 02-02-2014 12:54 PM

Thank you for all the responses!!! I appreciate any and all advice since I am just starting off.

Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise? I will be reading up as much as I can before I begin the process of leaving Ameriprise.

Am I being na´ve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?

samclem 02-02-2014 01:08 PM

Quote:

Originally Posted by cucumber (Post 1410470)
Am I being na´ve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

Cucumber, you need to run away from Ameriprise. The advisor gets paid by recommending high expense funds. There's >tons< of evidence that these funds perform no better than low-cost funds even >before< the costs are taken into account, and their returns are much worse if we include the impact of the fees.
Yes, you are being optimistic and hopeful, and it only benefits this "advisor," not you. You shouldn't be apologetic about ending the relationship, the whole thing should make you angry and eager to move on and cut your losses.

Do a search for "Ameriprise" on this site to see how others have been treated.

Welcome to the board, and good luck.

Ready 02-02-2014 01:08 PM

Quote:

Originally Posted by cucumber (Post 1410470)
Am I being na´ve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

In a word...YES.

I'm afraid it's really that simple. Do any google search on comparing index funds to actively managed funds and you will find that the actively managed funds, which your advisor is likely putting you in, rarely outperform index funds. Many of us on the forum invest in a lazy portfolio consisting of one domestic index fund, one international index fund, and then a bond fund or CD, or some combination of the two. It takes little effort to manage and requires you look at it only periodically to do a rebalance.

Even if you paid an advisor hourly one time to help you select the funds, you would be far better off than staying with Ameriprise and paying their ongoing fees. These advisors like to keep portfolios very complex to intimidate their clients into staying with them, but the portfolios, with the associated fees, almost never outperform the lazy portfolio. They simply can't because of all the extra fees they layer on.

Read a book or two, and if you still need some help with your investments, post your questions on this forum or the Bogleheads forum and you will get far better advice from the collective wisdom of the forum members than any one paid advisor will give you.

Ready 02-02-2014 01:11 PM

Samclem - hey, were you looking at my notes when you wrote your response? :laugh:

Is it possible that we spend so much time together on this forum that the whole group begins to think alike?

samclem 02-02-2014 01:18 PM

Ready, Hey, your post was just like mine! I think sometimes we all spend so time on this forum that we all begin to think alike. :coolsmiley:

Happy Groundhog Day to all!

brewer12345 02-02-2014 01:23 PM

Quote:

Originally Posted by cucumber (Post 1410470)
Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?

You will have to read your policy to see what you can and cannot do. Typically VUL policies allow you to stop funding them if there is enough cash value in the policy to pay the policy expenses. However, do you need life insurance? Di you buy this for life coverage or as an "investment?" If you need life coverage, go get a 20 year term policy from someone else and dump this overpriced pig of a policy. If you don't, just dump the policy and get on with life.

cucumber 02-02-2014 01:51 PM

Quote:

Originally Posted by brewer12345 (Post 1410489)
You will have to read your policy to see what you can and cannot do. Typically VUL policies allow you to stop funding them if there is enough cash value in the policy to pay the policy expenses. However, do you need life insurance? Di you buy this for life coverage or as an "investment?" If you need life coverage, go get a 20 year term policy from someone else and dump this overpriced pig of a policy. If you don't, just dump the policy and get on with life.

I do need life insurance. I actually have a VUL and a term through Ameriprise because initially we couldn't afford the VUL to cover our needs so our advisor advised to get the balance with a term so we did since we trusted her. Didn't think to confirm any suspicions that she was acting in our best interests since I thought that's what CFP's fiduciary and ethical responsibilities were to the client.

Ready 02-02-2014 01:54 PM

Cucumber,

A CFP is not a fiduciary. They are a sales person who has passed some exams that qualify them to carry a title. A real estate agent must pass exams and have a license as well, but they clearly are motivated to sell property and earn commissions, not worry about whether you can afford to buy a home or whether the one they are showing you is really the best one for you.

If you want them to act as your fiduciary, send them a legal document that they must sign agreeing to act as such and see how they react to it. I suspect their reaction will be quite enlightening for you.

panacea 02-02-2014 02:21 PM

Quote:

Originally Posted by Ready (Post 1410507)
Cucumber,

A CFP is not a fiduciary. They are a sales person who has passed some exams that qualify them to carry a title.

A point of clarification here... A financial advisor can be a CFP and also act as a fiduciary. They are two separate issues. Regardless of an advisor's credentials, you simply need to find out whether they act as a fiduciary... or not.

Walt34 02-02-2014 02:27 PM

Quote:

Originally Posted by cucumber (Post 1410470)
Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise?

These have been suggested and I agree with the suggestions.

The Millionaire Teacher. A great "first book" on saving/investing. I'm about to send a copy to DW's nephew & his wife, who are great people but in debt up to their eyeballs and trying very hard to get out.

The Millionaire Next Door. Published in 1998 this one is a classic and deservedly so. Some of it is dated but the principles are not.

How a Second Grader Beats Wall Street. A bit more detailed than Teacher but also a good entry-level book.

Edit to add: You don't have to actually buy these books. Check the library first.

travelover 02-02-2014 04:28 PM

Quote:

Originally Posted by cucumber (Post 1410470)
....... Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise?.........

These are good resources here, too. I personally like the Bogleheads Guide to Investment book.
Investment Books

dontworry 02-02-2014 05:54 PM

I just wanted to say...try not to beat yourself up too much while you are in process to handle things yourself. We were with Ameriprise, then switched to Primerica before I knew anything about investing (smart investing). While with Primerica, I finally starting reading the right books and researching the smart stuff. It took me a little while to build up my confidence and finally switched to Vanguard. Read the books suggested above, read here, read Bogleheads. When you feel comfortable, take over as your own FA and you will save mucho dollars. And feel good about what you learn and the steps you take because many never learn the best way to invest!

pb4uski 02-02-2014 06:06 PM

Quote:

Originally Posted by cucumber (Post 1410470)
Thank you for all the responses!!! I appreciate any and all advice since I am just starting off.

Thanks dfalk on the book recommendation!! I will definitely start off with that book. Any other recommendations on books for a beginner that I can read in order to feel comfortable enough to get out of the grasps of Ameriprise? I will be reading up as much as I can before I begin the process of leaving Ameriprise.

Am I being na´ve that since my financial advisor at Ameriprise has CFP & CRPC designations that she should be acting in my best interests as far as growing my money and making the best investments? Despite the front-loads and high expense ratios, maybe the funds perform better than other funds and make up for those fees? Am I just being optimistic and hopeful?

Also in regards to my VUL, I emailed my advisor to see if I could just pay for the cost of the policy and not invest any additional money in order to save on the monthly cost and avoid the surrender fees but she never responded. :( Any one know if this is an option or will they not allow it?


Find out how much you would get if you just surrender the VUL. Also find out how long the policy is likely to provide coverage if you just don't make any further premium payments and let it run off and compare to the value of the life coverage provided. Then do one or the other but don't put any more new money into that pig.

brewer12345 02-02-2014 06:19 PM

Quote:

Originally Posted by dontworry (Post 1410631)
We were with Ameriprise, then switched to Primerica

Wow! That is quite an accomplishment.


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