Author Topic: Thinking about firing my financial planner  (Read 3153 times)


  • Bristles
  • ***
  • Posts: 458
Thinking about firing my financial planner
« on: May 25, 2014, 02:57:29 AM »
He had me roll $250k out of a 401k from a job I just left into his firm's wrap account to facilitate some Roth conversion, with me thinking I was going to get a significant discount on their management fee (~.5% vs ~1%) by hitting the $500k asset breakpoint, making the transaction effectively fee neutral (their accounts use class i shares in actively managed funds, with relatively low fund internal expenses so the management fee is pretty much the full expense).  Now I'm told that the discount only applies to assets over $500k, and I have to pay the ~1% on everything up to the $500k mark.  (Something I only discovered after reviewing my April statement, seeing the fee, and calling the central office after not getting a callback from my advisor).  I'm pissed b/c the 401k fees were effectively 0, expense ratios were low, and had I properly understood the fee structure, I would have left all of the money there except for what I was Roth converting.  As we liquidated the account, I'm assuming the transaction is irreversible.  I took him at his word regarding the fee structure and didn't read the fine print.  He's been ducking my calls for a few weeks on this, and called me back Friday after I had a conversation with his boss (a district manager).  His explanation to me was that he didn't realize that that's how the fee structure worked, which makes him incompetent at best in my mind, but my strong suspicion is that he knew and was hoping I wouldn't notice before he collected his commission on the transaction.  I've worked with him for about 5 years, and about 17 with the firm, and have never had a reason to question their integrity or competence before.  His boss said to me that his behavior was "completely unacceptable", that he will counsel the "young lad" (the guy is in his 40's), and has offered to give me a new rep, but that, unfortunately, there's almost nothing they can do about the fee structure w/ the central office.  The account performance has generally more than earned their fees vs. their blended index benchmarks over almost any timeframe, so I'm hesitant to pull it out & go with a boggleheads approach (which is the main alternative I'm considering at this point).   My advisor did waive his planning fee (normally $400) this year for me, as I'm currently unemployed, which I thought was pretty decent of him, but I'm feeling pretty pissed off and betrayed at the moment.  He's a CFP with a fiduciary duty, which I'd say he breached in this transaction.  What I'd really like is to leave the money in the account with a fee structure re-negotiated to be what I thought it was going to be, just to avoid the hassle of moving it and having to decide where to park it, and I would say it is in their interest as well, just to avoid the negative publicity and to get to keep managing my investments, the marginal cost of which I'm sure is close to nothing.  I'm meeting my rep on Tuesday.  Advice I'm looking for here is mainly negotiating strategy at this point, I guess.  I'm also just venting.

Assets with them:  $187k Roth IRA
                            $227k Trad IRA (from the 401k rollover)
                            $104k non-qual
                            $518k total

This is the bulk of my 'stache, excluding my cash, and a couple of miscellaneous stock brokerage accounts.


  • Walrus Stache
  • *******
  • Posts: 5166
  • Age: 29
  • Location: Cincinnati
  • Cast me away from yesterday's things
Re: Thinking about firing my financial planner
« Reply #1 on: May 25, 2014, 05:46:44 AM »
You don't need negotiating strategy. Say "If you do this, I'm willing to stay with the firm." If they don't, go elsewhere.


  • Magnum Stache
  • ******
  • Posts: 4565
  • Location: Texas
Re: Thinking about firing my financial planner
« Reply #2 on: May 25, 2014, 06:22:17 AM »
"Perhaps I have not been clear enough. You have 5 business days to refund the excess charges. At that point, I will be filing complaints with the Attorney General, State Board of Accountancy and the SEC."


  • Handlebar Stache
  • *****
  • Posts: 1391
Re: Thinking about firing my financial planner
« Reply #3 on: May 25, 2014, 07:16:33 AM »
Bottom Line "financial advisers" are generally BS salesmen who's first priority is to enrich themselves (through commissions and fees), secondarily, to enrich their firm (through commissions and fees), and thirdly, (to help the investor).  Good luck getting a good return with these dip sticks, many of whom have a NEGATIVE personal net worth (any DIP SHIT with a modicum of intelligence and the ability to study for a test, can pass a Series 7 exam, if he takes it often enough- he doesn't have to know a damned thing about real investing, nor does he need to have ANY personal experience investing).

- from a former Series 7 licensed "financial adviser" who quickly realized that the industry is largely BS and now counsels people for a more reasonably fee (feed me, and give me a 6-pack of beer, and I shall give you (for less than $10) better advice than "Morningstar" or any of the other "pay for play" companies will give you for thousands of dollars per year.

« Last Edit: May 25, 2014, 02:38:28 PM by libertarian4321 »

Rebecca Stapler

  • Pencil Stache
  • ****
  • Posts: 907
    • Stapler Confessions
Re: Thinking about firing my financial planner
« Reply #4 on: May 25, 2014, 07:42:28 AM »
Trust your gut on this -- either the advisor (1) isn't competent or (2) lied to you. Either one would be a dealbreaker for me.

You may not be able to undo the 401k liquidation, but I think it's wise to see alternative advisers if they won't agree to the fee structure he promised you.

If they don't refund you the fee and you're not averse to litigation, you may have a strong case of misrepresentation against them -- depending on your state's consumer protection laws. (for example: you would have a cause of action against him in Massachusetts)