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  • Unethical advisor and practice?


    I signed up with a financial advisory firm last summer in 2021. They are a fee only firm that charges under 400 a month to manage my retirement, taxes and create a plan. Initial meeting was fine. Most of the information were things I have heard on WCI. There was nothing sophisticated or different from what I gathered from my own research which was reassuring but also proved their service to be mediocre. I also have to stay on top of my accounts and probe often for them to act or respond on a timely manner as well as offer investing strategies. Rather than providing me with sound ideas, I’m having to lead the conversation.
    Besides the lack of timely service, I am noticing significant losses in my accounts. I originally had a Roth IRA setup through vanguard and once they realized I had an account they kept pressuring me to move my funds over to TD ameritrade. I transferred majority of my funds along with an additional $20k to the TD ameritrade accounts in order to maximize my tax deferred accounts. When checking my td ameritrade I noticed the amount transferred was not being reflected. The Td ameritrade accounts has $3k less than what was transferred. When asked about the difference, my advisor blamed it on market loss. I was surprised by that statement because it hasn’t even been a month since I transferred the money. The loss seemed really steep in such a short time to be attributed to market loss only in the month of January or February of 2022.
    im wondering if there was any unethical investments being made and what type of legal action could I take to recoup the money? How would I go about investigating something of this sort? When I look at the funds purchased, the funds do not show a net loss of 3k.
    any thoughts appreciated

  • #2
    “I also have to stay on top of my accounts and probe often for them to act or respond on a timely manner as well as offer investing strategies.”
    What specifically do you stay on top of?
    What actions are needing to be taken?
    What investing strategies are you considering or expecting?
    You do have access to your accounts I assume.
    What do you your statements show? They should show Beginning balance, transactions, unrealized gain/loss.
    Specific questions would be helpful.

    Comment


    • #3
      Is this a financial planning firm or investment advisory only? I.e. were you looking for comprehensive advice or just “investing strategies”? For the latter, there really isn’t a lot to do other than pretend to find techniques to beat the market. $400 a month to do that sounds like a lot, also that you and the firm and duplicating efforts, maybe at cross-purposes. $400/mo for comprehensive ongoing financial planning and investment management (which is not rocket science once the accounts are set up and rebalanced) is pretty cheap.

      I don’t necessarily fault the firm. It sounds as if your expectations may have been out of line with the services you were signing up for. The fee should reflect the value provided - do you perceive that much value in investment management? Some people would, just to have their hands washed of this chore. Not everybody can let go and you may be one of these. Important to recognize.

      “Significant losses” in such a short period of time is irrelevant (and we have no context for “$3,000”) unless the market has been on a major upward surge ytd, which we all know it hasn’t.

      Based on what you have said so far, I see nothing approaching “unethical”.

      Good luck and welcome to the forum!
      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

      Comment


      • #4
        A couple of questions:

        1. The market has been down since the start of 2022 and there isn't much anyone can do about that fact. What were you expecting or what did this person claim they'd be able to do? Produce positive returns while the rest of the world experienced losses?

        2. What was the plan for managing investments? If it was to invest and hold then what are your expectations for this person "managing" your investments? With most plans, there isn't much to do other than buy when funds are available and then wait and do nothing.

        3. It should be obvious to you where the $3K went. Did every last dollar transferred from Vanguard make it to TD? If not I'd be on the phone with both companies wanting to know why? If it did, you should be able to easily see $3K in losses. If you were buying at the end of 2021 trying to get things done before the end of the year then you likely have significant losses on those purchases right now.

        Superficially, it sounds like there is a disconnect between your expectations and the expectations of the FA. This to me is just a simple conversation where you voice your concerns.
        Last edited by PWMDMD; 04-03-2022, 06:21 AM.

        Comment


        • #5
          An index fund strategy is not supposed to be complicated. A common tactic of FAs trying to prove their worth is to present an overly complicated portfolio. I have been pitched portfolios with a dozen fancy sounding ETFs along with individual stocks.

          Why would you want your FA to be pitching different investment "strategies"? Do you want your FA to engage in performance chasing?

          Pull up VG account and look at when the funds were transferred over. Compare with the TDA account. Should be clear where the money went. Look at the performance of the transferred funds in the TDA account. You can see how much the funds have gained/lost.

          I think you need to reconsider your investment philosophy. If you and the FA don't mesh then don't use him/her. You sound like you want a FA that will answer any questions you have 24/7, call you up frequently for exciting new "investments", and monkey around with your portfolio constantly.

          Comment


          • #6
            Originally posted by zlandar View Post
            An index fund strategy is not supposed to be complicated. A common tactic of FAs trying to prove their worth is to present an overly complicated portfolio. I have been pitched portfolios with a dozen fancy sounding ETFs along with individual stocks.

            Why would you want your FA to be pitching different investment "strategies"? Do you want your FA to engage in performance chasing?

            Pull up VG account and look at when the funds were transferred over. Compare with the TDA account. Should be clear where the money went. Look at the performance of the transferred funds in the TDA account. You can see how much the funds have gained/lost.

            I think you need to reconsider your investment philosophy. If you and the FA don't mesh then don't use him/her. You sound like you want a FA that will answer any questions you have 24/7, call you up frequently for exciting new "investments", and monkey around with your portfolio constantly.
            An advisor should be willing to “talk you out of “ different strategies.

            “Online Trading Academy offers in-center and online stock trading and investing education for people who want to build confidence in their future. We provide professional education in online stock trading, futures trading, currency trading, commodities trading and options trading for the beginner who wants to learn how stocks work, to the experienced day trader who wants to learn advanced trading strategies. Trading classes provide interactive instruction on online trading and investing strategies to help people build skills and knowledge to invest in the financial markets. Ongoing support is available to students both in-center and online."
            Not what an advisor does.

            Comment


            • #7
              You really shouldn't have to 'stay on top of' your investment accounts. You should have a plan and follow that plan. Most plans don't require immediate and constant attention although I'm sure most here monitor everything much closer than most people. With that said, monitoring doesn't mean you have to take action.

              Comment


              • #8
                If your advisor does not have you in INDEX FUNDS, look elsewhere
                Many make the portfolio COMPLEX to make you feel that you are getting a bang for their fees and to make you feel that you could not do it on your own
                ITS REALLY VERY VERY SIMPLE
                I can see an advisor if someone like myself will need one when I can no longer do it. Otherwise read a book or two by Bogle, Swedroe, Malkiel, or Bernstein and become a DIY investor

                Comment


                • #9
                  $400 a month for services quoted to potentially keep you out of trouble until you are financially literate is cheap. It is not an automatic that joining investing sites and reading will give you that financial literacy.

                  Comment


                  • #10
                    Originally posted by Benny2022 View Post
                    I am noticing significant losses in my accounts. I originally had a Roth IRA setup through vanguard and once they realized I had an account they kept pressuring me to move my funds over to TD ameritrade. I transferred majority of my funds along with an additional $20k to the TD ameritrade accounts in order to maximize my tax deferred accounts. When checking my td ameritrade I noticed the amount transferred was not being reflected. The Td ameritrade accounts has $3k less than what was transferred. When asked about the difference, my advisor blamed it on market loss. I was surprised by that statement because it hasn’t even been a month since I transferred the money. The loss seemed really steep in such a short time to be attributed to market loss only in the month of January or February of 2022.
                    im wondering if there was any unethical investments being made and what type of legal action could I take to recoup the money? How would I go about investigating something of this sort? When I look at the funds purchased, the funds do not show a net loss of 3k.
                    any thoughts appreciated
                    Did you transfer the funds as funds from your brokerage ( I presume Vanguard) to TD. Or did you sell the funds and transfer it over to TD. If you sold you should know that what came in in one account should be what went out from the previous account. If the two don't match, that is not market loss that is embezzlement.

                    Apply some simple math, have concrete proof from both brokerages and confront them. If they cannot explain, report to the regulatory authorities.

                    Finally learn to do it DIY and save $400 a month.
                    Last edited by Kamban; 04-06-2022, 07:08 AM.

                    Comment


                    • #11
                      where’s Peds these days would have shut this down with no replies from OP

                      Comment


                      • #12
                        Originally posted by jacoavlu View Post
                        where’s Peds these days would have shut this down with no replies from OP
                        I've been wondering the same thing myself, where is Peds ? Maybe the other mods could comment.

                        Comment


                        • #13
                          Originally posted by FunkDoc83 View Post

                          I've been wondering the same thing myself, where is Peds ? Maybe the other mods could comment.
                          Was there any specific discussions with Peds? An issue or disagreement relating to the Forum?
                          No need to discuss or resolve or get into personal choices. Context only, not a debate.

                          Comment


                          • #14
                            Originally posted by FunkDoc83 View Post

                            I've been wondering the same thing myself, where is Peds ? Maybe the other mods could comment.
                            I haven't heard anything. It's probably just the typical changing of the seasons that seems to happen with many people and various online communities.

                            Comment


                            • #15
                              Peds took a break. I believe he is still lurking, just not commenting.
                              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                              Comment

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