financial adviser situation...

[anders2010]

first off i want to say recently i have seen the light about investing on my own and sticking with index funds over actively managed funds but i got into this when i was ignorant of all that stuff and am trying to fix things.

so my financial adviser moved to another firm a couple months ago and has tried to get me to fill out papers to have my account transfered. since i have learned about the fees involved in actively managed mutual funds i suspected that there would be fees involved with my move so i havent filled out the papers. he's telling me that i cannot sell my funds without first transferring my account and joining him at his new firm because he has no access to my money anymore. can this possibly be true? how can i not have access to my own money because of his move? i was looking online and found a WSJ article that talks about whether or not you should follow your adviser when he moves which seems to imply you dont have to. is there anything i can do here?

 

[Meadbh]

Of course you don't have to follow your adviser. Your money is your money. In fact, if your adviser is advising you as he seems to be advising you, I would advise you to dump him.

 

[dex]

Your current company has probably assigned your account to another advisor.
You could call Vanguard and have them do the transfer of your current funds/stock/bonds/etc to it and then sell when you want to.

 

[73ss454]

If you've seen the light the next step is to move your money to a low cost firm such as Fidelity or Vanguard. You'll be able to get investment help from them and the cost of the help is based on the amount of money you invest with them. You don't need to talk to any brokers at this point, get your $ away from brokers ASAP.

 

[growing_older]

he's telling me that i cannot sell my funds without first transferring my account

What he meant to say was HE cannot sell your funds and earn himself another commission. You can do whatever you want. It's your money.

I think this guy sounds like bad news.

 

[Nords]

first off i want to say recently i have seen the light about investing on my own and sticking with index funds over actively managed funds but i got into this when i was ignorant of all that stuff and am trying to fix things.

so my financial adviser moved to another firm a couple months ago and has tried to get me to fill out papers to have my account transfered. since i have learned about the fees involved in actively managed mutual funds i suspected that there would be fees involved with my move so i havent filled out the papers. he's telling me that i cannot sell my funds without first transferring my account and joining him at his new firm because he has no access to my money anymore. can this possibly be true? how can i not have access to my own money because of his move? i was looking online and found a WSJ article that talks about whether or not you should follow your adviser when he moves which seems to imply you dont have to. is there anything i can do here?

Ask your alleged "adviser" if he'll help you fill out the Fidelity or Vanguard forms to do a transfer-in-kind of your assets/shares from your current brokerage to one of their accounts.

Then ask him if he'll advise you what low-cost index funds would be suitable for your asset allocation.

I suspect he'll suddenly be unable to answer your questions... or your calls. So then you can call Fidelity or Vanguard (or Schwab) yourself and ask them to handle the process for you. Once you fill out the forms and mail them to the company, they'll contact your brokerage and arrange the transfer... the idea is that you'll no longer have to expose yourself to further coercion or other pressure from your adviser or your brokerage.

Once your shares of your actively-managed funds are with one of the other fund companies, they'll probably be happy to hold them free of charge while you use their websites to help select your new funds & asset allocations, and then sell them free of charge in order to purchase their funds.

If you're planning to use a Fidelity adviser then you should read Orchidflower's experiences with Fidelity's adviser. But if you're planning to do for yourself (with Fidelity or Vanguard or Schwab) then you shouldn't have any problems.

But you might be crossed off your adviser's Christmas-card list.

 

[Stevewc]

You don't say if these funds are in a taxable accounts or IRA (tax advantaged) type accounts.
Get help from vanguard or who ever to be sure you handle the transfers in the most tax efficient way possible. Probably a transfer in kind . Those two little words (mentioned in posts above) can be very important. Just keep taxes in mind when doing this type move. The representatives will help you if you ask.
You may or may not need to sell your funds, not sure what you have now.
Steve

 

[GoodSense]

Agree with others -- that doesn't sound right. I had some money with ING for a while, and my representative wouldn't even return my calls when I tried to transfer money to another account outside of ING. I made sure I stayed away from ING!

Make sure when you move, you don't the benefits of your previous plan. For example, I have some money in 457(b) plan, but it's only offered by a very limited number of companies with limited options. Neither Fidelity nor VG offers it, so I couldn't transfer it over.

 

[harley]

Once your shares of your actively-managed funds are with one of the other fund companies, they'll probably be happy to hold them free of charge while you use their websites to help select your new funds & asset allocations, and then sell them free of charge in order to purchase their funds.

A lot of good advice in the preceding posts. Just a little commentary on Nords' bit. They may sell them free of charge, but there might be tax implications you want to consider before doing so. I'm sure VG or Fido will point that out, but it never hurts to be reminded. Good luck on it all. You're doing the right thing, IMO.

 

[chinaco]

Just tell the adviser you are going to contact FINRA to try to understand why you cannot sell (or rollover) your funds without him!

FINRA - Investors

That will send the @$$H0!3 running.

 

[Dimsumkid]

Just wanted to add that you should check which fund families you currently hold and check to make sure these are part of your new company's list of no transaction funds. If not, you'd be better off calling your fund directly and have them manage it for you since most funds allow you to hold it with them for little or no charge too. I know Fidelity has an extra transaction charge if you buy/sell outside of the family of funds they have. The same is true with TD Ameritrade.

 

[smjsl]

he's telling me that i cannot sell my funds without first transferring my account and joining him at his new firm because he has no access to my money anymore.

Perhaps he was saying that HE cannot sell your funds until after transfer, which could make sense. But it does not mean YOU cannot sell it without him as others said...

Otherwise, he would be saying that if he died tomorrow you would have no way of getting your money back...

 

[nwsteve]

Just wanted to add that you should check which fund families you currently hold and check to make sure these are part of your new company's list of no transaction funds. If not, you'd be better off calling your fund directly and have them manage it for you since most funds allow you to hold it with them for little or no charge too. I know Fidelity has an extra transaction charge if you buy/sell outside of the family of funds they have. The same is true with TD Ameritrade.

I have moved funds from other providers to Fido and they do not charge to sell those positions--only on the Buy side. The particular funds came from an old self directed account and even included a couple of Vanguard funds.
Nwsteve

 

[saluki9]

Just tell the adviser you are going to contact FINRA to try to understand why you cannot sell (or rollover) your funds without him!

FINRA - Investors

That will send the @$$H0!3 running.

If a registered rep switches broker dealers, it is completely true and honest that he (the rep) cannot sell shares that belong to a client of his former broker dealer.

The rep would be in MUCH more trouble with FINRA if he actually did sell the shares without the client signing the paperwork.

 

[sheehs1]

Your financial advisor may have failed to tell you that you might be charged a fee per account to transfer your accounts to him. Can't imagine since he has already left that the firm wouldn't charge you. Since it is a per account fee it can add up. Usually $75.00 an account ( or in that ball park).
If you do leave your current firm, discuss these transfers fees with the company you may transfer to. They will often (but not all the time) reimburse...just to get the account (s).

 

[FinanceDude]

What he meant to say was HE cannot sell your funds and earn himself another commission. You can do whatever you want. It's your money.

I think this guy sounds like bad news.

Most mutual funds are sold for no commissions, since a commission was paid on the way in.

However, he is 100% wrong, what he is saying is: "Sign this form so I am still your rep. Then we will take all those great funds my old firm told me to tell you to buy and sell them, so we can take your money and buy the stuff my NEW firm told me is great and I want you to buy"...........

 

[FinanceDude]

Then ask him if he'll advise you what low-cost index funds would be suitable for your asset allocation.

If you're going to do it yourself, you don't need his advice..........

 

[harley]

Most mutual funds are sold for no commissions, since a commission was paid on the way in.

However, he is 100% wrong, what he is saying is: "Sign this form so I am still your rep. Then we will take all those great funds my old firm told me to tell you to buy and sell them, so we can take your money and buy the stuff my NEW firm told me is great and I want you to buy"...........

+1. This is exactly the situation. Just call VG (or whoever) and get them to move the funds back under your control. Then take your time and change your investments as you decide is best.

 

[Emeritus]

Let me just join others and say how much more pleasant it is to deal with Vanguard (my favorite) or Fidelity than a traditional broker. Perhaps if those with experience with the other decent firms would give a recommendation he might have a good assortment to choose from.

We just got the small account out of the clutches of Merrill Lynch and are waiting on the big one

 

[anders2010]

woah thanks for all the responses guys. i have gotten most of it sorted out thankfully without having to deal with my former adviser. my funds were with fidelity so i called them up and finally got online access to my account (my adviser would always dodge this subject when i brought it up with him). i'm now able to sell my stuff on my own.

but reading through the rest of this thread made me think about what i'm actually doing and i have some other questions. so basically i was going to sell all of my investments (including a SEP IRA account) now that the dow has hit 11k and i would only be taking a relatively small loss. my investments are all from my own money, independent of anything like a 401k or anything like that

all these investments are in actively managed funds which i've learned is a no no anyway and i want to get out of them but i was just going to sell everything and just let the money sit in the bank till i get a steady source of income and can afford to invest again. as it is im unemployed and struggling to get a job and every few months i have to sell anyway to pay rent and bills.

so i figured i would get out now since this is the best the markets been in a while and my losses would be minimal. and i'd hold off investing until i have a steady source of income so i dont have to keep drawing from my investments. im going to move to vanguard when i do start investing again because i like their selection of index funds better but i hadnt really thought about tax considerations or anything because i will be selling at a loss (though i imagine there will be some penalty for getting out of the SEP).

now that i actually can sell on my own im wondering if this is a good thing to do? like based off of what i've said, are there some obvious things i'm not considering here? sorry if this is confusing

 

[haha]

...(though i imagine there will be some penalty for getting out of the SEP).

now that i actually can sell on my own im wondering if this is a good thing to do? like based off of what i've said, are there some obvious things i'm not considering here? sorry if this is confusing

Don't forget a SEP is not an investment, it is a particular tax deferred structure to hold investments. Consider keeping the SEP, because as you say there may be penalties and taxes to pay if you withdraw the funds or investments. You can sell the specific funds or other invesments within the SEP without tax consequences, as long as you leave the proceeds inside the SEP.

You can also do tax free rollovers into other tax deferred structures, but be sure something like this is necessary or favorable to your interest, which it likely is not.

Ha

 

[dex]

are there some obvious things i'm not considering here? sorry if this is confusing

Yes, using capital letters.

 

[anders2010]

Don't forget a SEP is not an investment, it is a particular tax deferred structure to hold investments. Consider keeping the SEP, because as you say there may be penalties and taxes to pay if you withdraw the funds or investments. You can sell the specific funds or other invesments within the SEP without tax consequences, as long as you leave the proceeds inside the SEP.

Thanks, I hadn't realized this.

Yes, using capital letters.

Sorry about that

 

[FinanceDude]

Don't forget a SEP is not an investment, it is a particular tax deferred structure to hold investments. Consider keeping the SEP, because as you say there may be penalties and taxes to pay if you withdraw the funds or investments. You can sell the specific funds or other invesments within the SEP without tax consequences, as long as you leave the proceeds inside the SEP.

You can also do tax free rollovers into other tax deferred structures, but be sure something like this is necessary or favorable to your interest, which it likely is not.
Ha

Not true, you can roll a SEP into a traditional IRA.............

 

[Sarah in SC]

anders, take some time right now to evaluate your overall financial situation before you do anything else. Leaving aside the tax deferred account (the SEP), which should be rolled into a regular IRA at some point, you need to look at your taxable accounts and figure out how much you might need to have to live on for the next x amount of time until you find work again. That needs to be in cash, now, in a simple money market account at Fido or your bank.

The rest can be put into something for your long term goals, but index funds are not a panacea for the masses, any more than religion is. Some (SOME) actively managed funds do a splendid job of outperforming their benchmarks while others do not. Some index funds aren't so hot. Just saying you are going into index funds is not the full picture. You need to figure out your asset allocation and then research both index and actively managed funds to make the right choices for your risk tolerance and investment horizon.

Take control. This is, and has always been, your money. And your responsibility.

Good luck!