How to make the most out of financial advisor meeting?
October 30, 2017 12:14 PM   Subscribe

I have some accounts with a company that rhymes with Amerifries and need to make the most out of tomorrow's meeting with my advisor. I'd also like to transition accounts away from the company - any pitfalls?

I have some retirement accounts that are managed by an 'Amerifries' financial advisor. She has been a really good resource for us in that she helped us get a good perspective on our overall financial picture, kick our asses into gear about retirement savings and other goals, and got us through a murky period where my partner and I couldn't talk about finances without a meltdown. We had a number of different retirement accounts and we put them altogether under funds managed by her company.

I regret doing this as all Bogle-type advice tends to scream this is a scam and we pay too much fees and we should probably not be doing this. I tend to agree but I want to know if there's anything I should ask about in advance of transitioning my retirement accounts away from this company. I feel like these kinds of things are a jungle of "questions you should ask if you know what questions should be asked" but you're SOL if you don't know what you don't know. I am fearful about throwing a bunch of our meager savings away. But I don't want my fear to continue costing us money in other ways!

How can I make the most out of this final meeting with this advisor and how can I make sure that I don't end up losing a bunch of our investments in the transition to another financial services company such as Vanguard?
posted by amanda to Work & Money (11 answers total)
Response by poster: Also, if I'm going to switch, maybe there's no point in going to the meeting. I'd be happy to hear that as well!
posted by amanda at 12:29 PM on October 30, 2017

I'm not clear what the final meeting is for. Financial advice on what to do in the future? If that's the case, I'd skip it, get Vanguard's instructions on how to process the rollover, and just correspond with Amerifries regarding rollover processing. When we broke away from our (very expensive, in hindsight) financial adviser and made a similar move, we didn't have much of a reason to talk with him about investment advice because it became obvious that he wasn't interested in protecting us against high fees. The transition/rollover process involved some forms but it was ultimately pretty painless, and we didn't get the hard sell to stay, which I was dreading.

It may be worth meeting with a financial adviser who charges on an hourly basis to get advice on what funds to invest in via Vanguard or other low-cost portals, if you don't feel like you have a handle on that through Bogleheads etc., or if you have other complicating factors at play (i.e. saving for anything other than retiring at 65).
posted by craven_morhead at 12:40 PM on October 30, 2017

I would talk to my destination company first and see what they offer and how they recommend handling the transition.
posted by SLC Mom at 12:40 PM on October 30, 2017 [3 favorites]

Can you delay the meeting with your Amerifries advisor until after you've had a chance to talk to a Vanguard (or flat-fee) advisor? If not, I would make the goal for this meeting to gain as much understanding as you can about how your money is currently invested - what kinds of products (mutual funds? insurance?), the specifics of those funds/other products, and the ongoing costs associated with those products. Don't spend time on future goals, or choosing new products that you're going to invest in going forward - just try to understand where you stand today.

I'm going to guess that your current advisor would *not* be a good source of advice about how to transition to another company. She might have some horror stories for you about how much it would cost you if you cashed out all your investments now, but you can transition to another brokerage without cashing out.
posted by mskyle at 12:41 PM on October 30, 2017

I don't understand the purpose of this meeting. Isn't she just going to try to convince you to stay? Especially since you seem rather nervous/fearful and prone to this sort of manipulation. If you need someone to hold your hand then have Vanguard do it. They have incentive to help you whereas she does not.
posted by acidic at 12:44 PM on October 30, 2017 [2 favorites]

From a data point of one: I wouldn't even bother with the last meeting. They are scammy; there used to be a web site devoted to how scammy it is to work there (i.e., put tons of pressure on customers to buy plans that are fairly useless and unimaginative), but I think it disappeared at some point. They were pretty useless to me and "accidentally" were dinging my credit card years after I stopped doing business with them. Have you read their complete history? Totally scammy.

Yeah, it's not them you want to have a meeting with. Don't even bother. You're done with them, goodbye, move your money elsewhere.
posted by Melismata at 12:45 PM on October 30, 2017

If, after talking to the receiving broker, you have specific questions about the transition that cannot be answered, you can email her. She can make her case and you can read it without the pressure and time-suck of a personal meeting.

AFAIK, the only issue you have to be concerned about is capital gains taxes on proprietary funds in non-retirement accounts. (Don't worry if that didn't make sense; I'll try to explain.)

It's no big deal to transfer a stock or an ETF or a mutual fund that both the sending and receiving broker handle. This is called an in-kind transfer, It's also no big deal to transfer a retirement account: You can just sell it off and transfer the cash, without any tax consequences.

But if you have a propriety fund - one that only your current broker handles - in a non-retirement account, you'll have to sell it and transfer the cash, and you'll owe any capital gains due from the sale. You said "we put them altogether under funds managed by her company," so this will likely be the case.

Therefore, you may want to leave those funds with the current broker if you have large capital gains, if the additional fees are less over the long-term than the value of deferring the capital gains, if you are planning to sell the assets again soon (like in less than 5 to 10 years) and if you are willing to deal with the fuss of having an additional brokerage account to save a little bit of money. It's very unlikely to be worth it, but that's something that your current broker might bring up.
posted by Mr.Know-it-some at 1:12 PM on October 30, 2017 [1 favorite]

Therefore, you may want to leave those funds with the current broker if you have large capital gains, if the additional fees are less over the long-term than the value of deferring the capital gains,

Two things, just in case they aren't already clear from this:

(1) An apparently small difference in fees ("why, it's only .5% more than the competitor!") actually adds up a LOT over time.

(2) Capital gains tax only applies to the gains. So say you invested $4500 and the value of the investments is now $5000. You'll get that $5000 from Amerifries, but only $500 of it--the amount the value has increased--is taxed.

I also don't know if any Amerifries proprietary funds have back-end fees--that is, whether they'll charge you a percentage of the value to exit. It's a tactic most investment companies have abandoned for most funds because it's so off-putting, but you should figure out whether there are any for the funds you're in. That would be an additional cost, though to me it'd be a spur to get the heck away from that company!
posted by praemunire at 3:48 PM on October 30, 2017

I would talk to my destination company first and see what they offer and how they recommend handling the transition.

QFT - the meeting is likely to be a sales pitch, and if you believe you want to go to another company, they should have a lot of experience in helping you make the switch or doing it for you.
posted by randomkeystrike at 4:44 PM on October 30, 2017

I have no clue about the ins and outs of financial advisers (except what you already know) but I have a sort of rule about "meetings."

If you're going to a "meeting" and don't have an idea of how it benefits you, then it's not to benefit you. That's great if you're meeting with someone to help them. Not great otherwise. I'd ditch this one.
posted by The Deej at 6:51 AM on October 31, 2017 [2 favorites]

Response by poster: Thanks everyone! All good answers. I cancelled the meeting and will contact Vanguard today and see what they recommend!
posted by amanda at 10:25 AM on October 31, 2017 [1 favorite]

« Older Help me get from Frankfurt to Prague!   |   Carpeting in Basement Newer »
This thread is closed to new comments.