Can someone explain the dynamics of this to me?
My family has had the same brokerage accounts since at least the early 1960s.The company names have changed and changed again, but the offices have stayed the same. The first one I remember was Thompson-Mckinnon.
We have never traded a lot, and therefore didn't generate a whole bunch of commissions, but I was willing to pay a couple hundred dollars every now and then, both for the personal assistance and out of a sense of loyalty. Our longtime broker passed away a few years ago, but things still continued apace.
Recently, an order got put through a little bit wrong, and when I asked them to correct it, they did so, but were sure to let me know that it was costing them money, and I sensed some frustration on their part.
In the same conversation the broker told me they were advisors and people paid them for advice, but since I made my own decisions, I should move all of the accounts to the self-directed system. So that's what I'm doing (although it is taking forever to happen).
In a recent conversation, the broker said that I was holding full service accounts, but that I was "unwilling to pay them".
That kind of hurts my feelings. We have been good clients for over half of a century. They've made at least some money consistently over that time, and they would continue, but as I said, we're not big traders, and the commissions would continue to be few and far between. btw, by middle class standards, the accounts are fairly large.
Essentially, they don't want me anymore. This makes no sense to me, but That's what we're going with.
Does this make any sense to you? Does this fit a recent pattern in the industry? I guess things change, but this seems weird to me.
Comments
The only way to make a point with a fullservice broker (or any broker) is to move your account and hit the broker by reducing his AUM 'book' --- I'm sure they'll contact you to ask why you're leaving and perhaps try to sweeten an offer to get you to stay. lol
There may be large tax liability if positions are sold. You could just do a partial transfer of things in-kind and deal with the rest later.
There are plenty of brokerages that will be happy to have you as a client. I would not stay with them if they paid you 2% per year of your account value as a bonus to stay. But that is me.
From my vantage point, it seems to me they have already moved on in their relationship with you. I do not ask "why?" I only want to know where I stand in a relationship so I can conduct myself optimally.
You did not say which brokerage you are with. Are they in the ACAT system where you can transfer assets electronically?
Going forward, all your communication with them should be in writing only - that is all they understand. I would keep it cold.
Good luck.
As it happens the accounts (all 4 of them) moved to self-directed within the last few hours.
fyi, it is Wells Fargo Advisors. they have always been very friendly and helpful for years -- until this. The ironic thing is that the #1 reason I still had accounts there was out of a sense of loyalty.
Anyway, I guess I'm feeling liberated. End of an era.
You should be able to move positions by electronic transfer. Before you submit the request at the receiving firm, make sure each of the position you want to move can be held at the receiving firm.
Also, I would move positions by partial (not full) account transfer, though that might take more time.
Finally, make sure you are getting the best possible bonus and platform for you needs.
Personally, I like to have two brokerages (and not one). The two based on my experience I would recommend are Schwab and Fidelity. Depending on your investment needs Firstrade, IBKR, Robinhood and others may also work.
Doing business is not about feelings, it's about getting what you want for the best price. Show them who is in control and transfer your money to Schwab or Fidelity and pay no fees, but initiate it from Schwab or Fidelity; they should cover all the fees.
Wells Fargo had many violations, see (https://www.nerdwallet.com/article/banking/well-fargo-fines)
My parents were in your position many years ago. I helped them to move to Fidelity brokerage. Basically we walked into a Fidelity office and had the asset transferred in-kind to minimize capital gain (as @yogibb stated above). It was quite a straightforward process and you need to have the latest statement ready. We (and several siblings) then managed their account ourselves and saved them from the hefty fees previously paid. Looking back, Fidelity did all the heavy lifting in asset
Going forward think of the 1% savings this way,
As a retiree, this 1% annual fee equates to a 25% savings of your 4% Safe Withdrawal Rate... that's significant!
You have the choice to stay or leave. Find a Firm that fits what you like to do...trade infrequently? Self-directed? Manage your own assets? Have a few different Brokers?
For most Firms, there is more to their business than just having an investment account. Retirement Planning, Income Solutions, Cash Management, Long Term Care, Charitable Giving, Estate Planning...so, you see, the change that is happening is the firms will allow you to stay but you're going to be in a specific 'model' that doesn't need any of these services. For the most part, the Firms are just changing to adapt to the competition.
So you moved to WellsTrade?
If that's what they call it. My logon is still the same, which is wellsfargoadvisors.com
I don't see the name Wells Trade anywhere on the site.
Also, if not instructed properly, the originating firm may find it simpler to sell all and transfer cash.
As services have become more commoditized, brokerages seem to be blending their low cost and full service brokerage identities. Perhaps in an effort to upsell.
Merrill Edge still exists as a name, but it is now presented as a service of "Merrill" and you can login at ml.com.
Wells Trade seems to have done something similar, presenting accounts as "Wells Fargo Advisors WellsTrade brokerage accounts" on http://wellstrade.com
Vanguard presents its "ways to invest" (products and services) on a page comparing different levels of advice you can pay for. Scroll waaay down to the bottom, and there's a button for another page if you really, really "want to plan on your own".
When I transferred my IRA from Vanguard to Fido I was able to submit a list in advance for them to consider. Other brokerages may offer the same feature.
Fido will trade DODGX, at 100 bucks a pop, they simply won't trade VSMIX and DRGVX, for example, which feature in our accounts at Wells. So my taxable account will likely remain at Wells, as will my wife's IRA and taxable, aside from TIAA assets that will eventually be annuitized anyway..
We have never had any problems with Wells. When we started out it was Crocker Bank, which was bought by Midland Bank, which was bought by Wells, then merged into Northwest Bank where we had banked as college students. Who knows what would result to the banking industry were we to move.
I suspect that maybe having a money market that has a bit lower yield is one of Schwab's profit centers.