Advice needed-is the Ameriprise advisor really thinking about our needs?

[Ottoford]

Short background - my mother in law has Alzheimer's.  All of her investments prior to her husband passing are being managed by Ameriprise.  Most of her assets are in holdings I don't understand (variable annuity) but there is a stock account that has American Electric Power Company and Con Ed.  We are managing all of her investments due to her diagnosis.  We are letting what was previously set up ride for the time being.

The adviser is recommending we sell some or all of the Con Ed and switch it over to HLIEX (JP Morgan Equity Income) and PIFZX (PGIM Short-Term Corporate Bond Z).  His reasoning is that as interest rates rise utilities stock often take a hit. The dividend on Con Ed is pretty low right now, but I've always seen them as a reliable company over time.

And why would we go with a something like the PIFZX corporate bond fund with an expense charge of 0.52% versus a Vanguard corporate bond fund with a 0.07% expense ratio?  When I look at PIFZX on morning star it has a minimum investment of $5.0 million.  Does this mean that Ameriprise is trying to sell this to a lot of their clients in order to make a bulk buy at $5.0M?

Same with the equity income fund - minimum investment is $1.0M and the expense ration is 0.75%.

I feel like even if selling Con Ed is the right thing to do there are better mutual funds we can invest in over what is being recommended.

My husband and I use E-trade with the philosophy of buying companies we like and have a fair amount in Vanguard funds.  So this Ameriprise set up is unfamiliar to me.

Any help to understand this would be appreciated.
Thanks in advance.

[merula]

Short answer: No.

Longer answer: Most financial planners and financial advisers are not "fiduciaries"; that is, they do not have a legal obligation to put the client's interests ahead of their own. Absent that legal requirement, and given human nature, many don't.

Ameriprise has a reputation for being particularly shady with their business practices. A lot of what they offer has high up-front commissions, and so the planner gets paid immediately whether the investment is good or not.

Variable annuities are a hallmark of this kind of practice because there are very high front-end commissions as well as high ongoing fees and, as icing on the cake, surrender charges that make it costly to get out of this kind of arrangement.

[Ottoford]

Short answer: No.

Longer answer: Most financial planners and financial advisers are not "fiduciaries"; that is, they do not have a legal obligation to put the client's interests ahead of their own. Absent that legal requirement, and given human nature, many don't.

Ameriprise has a reputation for being particularly shady with their business practices. A lot of what they offer has high up-front commissions, and so the planner gets paid immediately whether the investment is good or not.

Variable annuities are a hallmark of this kind of practice because there are very high front-end commissions as well as high ongoing fees and, as icing on the cake, surrender charges that make it costly to get out of this kind of arrangement.

Thanks - sort of what I thought.  Hoping I was wrong.

[Another Reader]

If you have power of attorney, you may want to consider moving the money away from Ameriprise now.  You will certainly want to do that with your portion of any inheritance when she passes.

ETA:  No on selling the stocks.  Anything sold in a taxable account will incur capital gains tax if there is a profit.  A new basis will be established when MIL passes and there will be no capital gains tax at that point.

[MDM]

Short answer: No.

Longer answer: Most financial planners and financial advisers are not "fiduciaries"; that is, they do not have a legal obligation to put the client's interests ahead of their own. Absent that legal requirement, and given human nature, many don't.

Ameriprise has a reputation for being particularly shady with their business practices. A lot of what they offer has high up-front commissions, and so the planner gets paid immediately whether the investment is good or not.

Variable annuities are a hallmark of this kind of practice because there are very high front-end commissions as well as high ongoing fees and, as icing on the cake, surrender charges that make it costly to get out of this kind of arrangement.

Thanks - sort of what I thought.  Hoping I was wrong.

Sorry, you were correct.  Not much to add to merula's summary.  Good luck!

[Boofinator]

I'll second. Ameriprise is out for Ameriprise. And their "good" salespeople have mastered the art of BS. What does the Ameriprise advisor know about those recommended funds that is not already priced into the market? Hint: If he knew where certain sectors of the market were heading, he wouldn't be an Ameriprise advisor.

[Ottoford]

I'll second. Ameriprise is out for Ameriprise. And their "good" salespeople have mastered the art of BS. What does the Ameriprise advisor know about those recommended funds that is not already priced into the market? Hint: If he knew where certain sectors of the market were heading, he wouldn't be an Ameriprise advisor.

Excellent point.  When my husband was being added to some of his moms accounts he made the mistake of telling the Ameriprise rep our net-worth.  He tries to sell us on different products now.  We politely decline. 

[robartsd]

Excellent point.  When my husband was being added to some of his moms accounts he made the mistake of telling the Ameriprise rep our net-worth.  He tries to sell us on different products now.  We politely decline. 

All the more reason to just end the relationship.

[Double Yu]

Interesting to read this.

My dad's funds are managed by Ameriprise.

I don't know if I have the gumption to sever the relationship, but I do have power of attorney so I could do something. Where would you folks recommend reading for gaining an understanding for how to handle a 70+ year old's investments? I don't have any background in or much depth of understanding of tax law in this kind of case. Maybe I shouldn't touch anything, but I'm curious to hear a little more about how to better serve my dad.

[MDM]

Interesting to read this.

My dad's funds are managed by Ameriprise.

I don't know if I have the gumption to sever the relationship, but I do have power of attorney so I could do something. Where would you folks recommend reading for gaining an understanding for how to handle a 70+ year old's investments? I don't have any background in or much depth of understanding of tax law in this kind of case. Maybe I shouldn't touch anything, but I'm curious to hear a little more about how to better serve my dad.

Probably best if you start a new thread for this in the "Case Study" board.  See How To: Write a "Case Study" Topic.

[Financial.Velociraptor]

I dislike Ameriprise and Edward Jones.  You can almost certainly do better with Vanguard or Fidelty indexing.

[ILikeDividends]

I hate, hate, hate (did I say hate?) anything stinking of Ameriprise.

I was my late uncle's executor and trustee.  He had an annuity with Riversource, a subsidiary of Ameriprise.

Liquidating his Riversource annuity into my uncle's estate account was like wrestling a vampire for a fresh corpse.  They dragged the whole process out for over 3 months.  Three or four calls a week.  Outright lying excuses for repeated "two day" delays, over and over again.  Did I mention it took over 3 months of my time badgering them to get this straightened out?  I was literally on a first name basis with all of those lying claims representatives.

One of the reps actually had the gall to claim the court order appointing me executor wasn't a court order.  How do you deal with that?

Towards the end, I started calling them 15 minutes before the end of their business day, kept them on the line for at least an hour, and made it my personal goal to get them to cry before I let them hang up on me.  This was my new tactic, started in the 3rd month.

I made a list of all the phony excuses they had already given me.  When they tried to give me the same excuse again, I made them listen to me recite the entire list back to them; including every promised call-back that never happened, with dates and names attached, etc.  They were all clearly reading from the same script.

Apparently, they can't hang up on you if you don't curse and swear.  I was amazed at just how effectively abusive I can be without having to cross the cursing/swearing line.

Many of the managers are as hard as nails.  I could never get them to break.  That's why they are managers, I suppose.

I'm 99% certain that the only reason I finally wrapped this up as soon as I did was that they were tired of paying overtime for the reps I kept on the phone after working hours.  I made it quite clear to the last manager that finally settled this for me that I was more than prepared to waste as much of his staff's time as they were wasting of mine.  I'm sure that the long list of call-notes on my claim made it clear that I wasn't bluffing.  I know they kept such a log because I made them read it back to me, every time, before I let them off the phone.  I got the check 4 days later.

Run.  Don't walk.  These folks are vampires.

ETA: Apparently, "vampire" isn't a curse word.  ;)

[Ottoford]

I hate, hate, hate (did I say hate?) anything stinking of Ameriprise.

I was my late uncle's executor and trustee.  He had an annuity with Riversource, a subsidiary of Ameriprise.

Liquidating his Riversource annuity into my uncle's estate account was like wrestling a vampire for a fresh corpse.  They dragged the whole process out for over 3 months.  Three or four calls a week.  Outright lying excuses for repeated "two day" delays, over and over again.  Did I mention it took over 3 months of my time badgering them to get this straightened out?  I was literally on a first name basis with all of those lying claims representatives.

Riversource annuities are all over the statements that we get.  85% of her total holding are in these variable annuities.  The other 15% is the utility stocks.

In general I have had a hard time understanding her holdings and understanding the Ameriprise statements.  I've asked for meetings and explanations and I feel like I just get diverted.  Even a simple change of address is difficult.  Eight months after trying to change her address we received a check for one of her minimum distributions to her old address.  I speak to the rep at least once a quarter and every time he has to ask me for phone number again.  It's been frustrating.

At this point there is a monthly withdrawal from Ameriprise funds to pay for her care facility.  I think maybe we will just drain the accounts in return for the excellent care she is receiving, so we haven't made a change.  I'd be scared of the fees if we close the accounts.

[Boofinator]

I'd be scared of the fees if we close the accounts.

I believe the fees are generally charged on the front end and then the continuing fees. I could be wrong but I don't think there are any fees that would be charged on the back end. (Though how much you lose by canceling the annuity might be something to look into, but in my opinion it would probably be worth it.)

[reeshau]

I'd be scared of the fees if we close the accounts.

I believe the fees are generally charged on the front end and then the continuing fees. I could be wrong but I don't think there are any fees that would be charged on the back end. (Though how much you lose by canceling the annuity might be something to look into, but in my opinion it would probably be worth it.)

When were the annuities opened?  The only thing worse than selling them, is selling them to people who are already retired.  There could be some surrender charge or withdrawal penalty for the first decade--check the fine print.

[reeshau]

In general I have had a hard time understanding her holdings and understanding the Ameriprise statements.  I've asked for meetings and explanations and I feel like I just get diverted.  Even a simple change of address is difficult.  Eight months after trying to change her address we received a check for one of her minimum distributions to her old address.  I speak to the rep at least once a quarter and every time he has to ask me for phone number again.  It's been frustrating.

Have you thought of approaching a fee-only Certified Financial Planner or CPA to review your mother's case?  I do think there is a risk of making a costly, non-reversible mistake in unwinding the annuities.  It could well be worth some professional time to figure out the best way to do it.

[merula]

ILikeDividends - you're my hero.

Riversource annuities are all over the statements that we get.  85% of her total holding are in these variable annuities.  The other 15% is the utility stocks.

In general I have had a hard time understanding her holdings and understanding the Ameriprise statements.  I've asked for meetings and explanations and I feel like I just get diverted.  Even a simple change of address is difficult.  Eight months after trying to change her address we received a check for one of her minimum distributions to her old address.  I speak to the rep at least once a quarter and every time he has to ask me for phone number again.  It's been frustrating.

At this point there is a monthly withdrawal from Ameriprise funds to pay for her care facility.  I think maybe we will just drain the accounts in return for the excellent care she is receiving, so we haven't made a change.  I'd be scared of the fees if we close the accounts.

Are the withdrawals for care coming out of just the annuities, or out of both the annuities and the utilities stocks? If you can get it so they're JUST out of the annuities, that's probably better, though it'd depend on the fine print. (Annuities sometimes only pay out for the lifetime of the owner, but owned stocks wouldn't have that restriction. And, as stated upthread, the basis resets when the owner dies, so it'd be that much better to inherit as much in stock as possible.)

You should be able to get the documents that would tell you what surrender fees are associated with the annuities, but reeshau is right that if you're not entirely sure of yourself here, paying a fee-only CFP would be a good idea. (Probably not a CPA unless you're specifically concerned about the tax implications rather than surrender fees.)

[ILikeDividends]

Even a simple change of address is difficult.  Eight months after trying to change her address we received a check for one of her minimum distributions to her old address.  I speak to the rep at least once a quarter and every time he has to ask me for phone number again.  It's been frustrating.

Their entire schtick is to courteously and politely promise whatever you want to hear, get you off the phone, and then just go on to the next call with no intention whatsoever of doing what they just promised to do.

They let you wait days, weeks, or months--whatever--to come to your own realization that you just got blown off.

I would recommend that when you ask for an address change again, that you keep them on the phone for as long as you need to in order to get them to agree to send a confirmation letter to the address they said they just changed to.

When they resist (they will come up with some excuse), just escalate.  Keep telling them that it took you 8 months to realize they blew you off the last time, and that you're not prepared to wait another year for evidence that they haven't yet got their act together.  Eventually, they will ask, "is there anything else I can help you with?"  Explain that they haven't helped you with anything yet.  Don't be bashful.  Then just start from the top again, and continue to grill them.

When you get someone who promises to send you a confirmation letter you will then have a time-frame for when you have to call them back and do the same thing again, when the confirmation letter doesn't arrive.  Be prepared to keep cycling through this same process multiple times.  Keep them on the phone longer and longer.  Look up the time-zone they are in, and call close to quitting time.  Take names, record dates, and take minutes of the conversation.  This will give you material to use to keep them on the phone longer next time.  Open-ended questions are a great way to keep them on the line longer.  When they give you some vague answer, drill down with another open-ended question regarding that answer.  Rinse and repeat.

It's sad, but true.  These guys have a very well-rehearsed process to just get you off the phone as quickly as possible, and move on to the next call.  It's not a broken process.  This is their intended process.  If you can't cash the check, because you never got it, then the money stays on their balance sheet for another reporting quarter.

The sooner you realize that they will force you to become an S.O.B. eventually, the more quickly you will be able to get this resolved.

[robartsd]

Even a simple change of address is difficult.  Eight months after trying to change her address we received a check for one of her minimum distributions to her old address.  I speak to the rep at least once a quarter and every time he has to ask me for phone number again.  It's been frustrating.

Their entire schtick is to courteously and politely promise whatever you want to hear, get you off the phone, and then just go on to the next call with no intention whatsoever of doing what they just promised to do.

They let you wait days, weeks, or months--whatever--to come to your own realization that you just got blown off.

I would recommend that when you ask for an address change again, that you keep them on the phone for as long as you need to in order to get them to agree to send a confirmation letter to the address they said they just changed to.

When they resist (they will come up with some excuse), just escalate.  Keep telling them that it took you 8 months to realize they blew you off the last time, and that you're not prepared to wait another year for evidence that they haven't yet got their act together.  Eventually, they will ask, "is there anything else I can help you with?"  Explain that they haven't helped you with anything yet.  Don't be bashful.  Then just start from the top again, and continue to grill them.

When you get someone who promises to send you a confirmation letter you will then have a time-frame for when you have to call them back and do the same thing again, when the confirmation letter doesn't arrive.  Be prepared to keep cycling through this same process multiple times.  Keep them on the phone longer and longer.  Look up the time-zone they are in, and call close to quitting time.  Take names, record dates, and take minutes of the conversation.  This will give you material to use to keep them on the phone longer next time.  Open-ended questions are a great way to keep them on the line longer.  When they give you some vague answer, drill down with another open-ended question regarding that answer.  Rinse and repeat.

It's sad, but true.  These guys have a very well-rehearsed process to just get you off the phone as quickly as possible, and move on to the next call.  It's not a broken process.  This is their intended process.  If you can't cash the check, because you never got it, then the money stays on their balance sheet for another reporting quarter.

The sooner you realize that they will force you to become an S.O.B. eventually, the more quickly you will be able to get this resolved.

Sounds like someone should organize a class action lawsuit.

[freedomfightergal]

I hate, hate, hate (did I say hate?) anything stinking of Ameriprise.

I was my late uncle's executor and trustee.  He had an annuity with Riversource, a subsidiary of Ameriprise.

Liquidating his Riversource annuity into my uncle's estate account was like wrestling a vampire for a fresh corpse.  They dragged the whole process out for over 3 months.  Three or four calls a week.  Outright lying excuses for repeated "two day" delays, over and over again.  Did I mention it took over 3 months of my time badgering them to get this straightened out?  I was literally on a first name basis with all of those lying claims representatives.

One of the reps actually had the gall to claim the court order appointing me executor wasn't a court order.  How do you deal with that?

Towards the end, I started calling them 15 minutes before the end of their business day, kept them on the line for at least an hour, and made it my personal goal to get them to cry before I let them hang up on me.  This was my new tactic, started in the 3rd month.

I made a list of all the phony excuses they had already given me.  When they tried to give me the same excuse again, I made them listen to me recite the entire list back to them; including every promised call-back that never happened, with dates and names attached, etc.  They were all clearly reading from the same script.

Apparently, they can't hang up on you if you don't curse and swear.  I was amazed at just how effectively abusive I can be without having to cross the cursing/swearing line.

Many of the managers are as hard as nails.  I could never get them to break.  That's why they are managers, I suppose.

I'm 99% certain that the only reason I finally wrapped this up as soon as I did was that they were tired of paying overtime for the reps I kept on the phone after working hours.  I made it quite clear to the last manager that finally settled this for me that I was more than prepared to waste as much of his staff's time as they were wasting of mine.  I'm sure that the long list of call-notes on my claim made it clear that I wasn't bluffing.  I know they kept such a log because I made them read it back to me, every time, before I let them off the phone.  I got the check 4 days later.

Run.  Don't walk.  These folks are vampires.

ETA: Apparently, "vampire" isn't a curse word.  ;)

HILARIOUS!!!!  please write lot's!

[chasesfish]

I'm really sorry to see this @Ottoford

Are you the only family member and heir or are there others?

If there are others, I'd considered having a fee only CFP review what you have any make recommendations.  Find someone you're paying a flat fee from the assets and not someone who charges for assets under management.

You're likely at the beginning of a very painful exploratory process of marginally legal things done to bleed your family member of money.  I've known good advisers at the big retail firms and they don't stay there for a reason, their ethics can't tolerate what they are asked to do.

Best of luck to you, please post updates along the way