I am in the process of looking for a new financial advisor and I contacted one locally. He sluffed me off to another guy under him and I was advised by this person to sell off and liquidate my mutual funds with my current advisor under TD Ameritrade. The people I have been talking to operate under Wells Fargo. Shouldn’t they be able to transfer these funds without me having to sell them off ? What about the tax implications if I did this ?
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John 12:12 pm on October 5, 2010
A financial adviser is there to give advice and help enact transactions. You choose to accept or reject the advice.
The thing they aren’t telling you is that if you invest with them, they get a cut because they put your $ into accounts with their company so they get credit for the sale and get $ when your investment rises, and maybe even whenever you make a trade. If you don’t use their investments, they make no money. But yes, I would think they should be able to make a transfer, a sell off does not seem necessary. Strange because these companies are not fly by night places, but they can still have sketchy people. Especially the investment adviser divisions, they are basically independent people who have signed on with Wells Fargo or whomever to seem credible. Most are. Your questions make sense, you should put some pressure on the adviser and keep asknig until you get a straight and satisfying answer. If not, find someone who will give you one.
Bob Sacamano 12:12 pm on October 5, 2010
Assuming these are open-end funds, It really depends on Wells Fargo and the agreements they have with the funds. If your funds are major fund houses I would be really surprised if you couldn’t just transfer the shares over.
On the other hand, smaller, more obscure funds might not be able to be held at Wells Fargo.
Any truly competent and independent investment advisor can also just leave your account intact at TDA and just take over the management of your existing account there.
Link below is for a list of all funds that can be held at Wells Fargo starting with the "A"s.
Will 12:12 pm on October 5, 2010
It’s not unusual for a senior advisor to work with junior advisors…However, everyone deserves a far better transition than a ’sluff’…Your questions are good ones, and the answers will vary by advisor and distributor…The bigger red flag here is your lack of confidence and comfort in asking these questions to the advisor directly at the time…a successful client-advisor relationship hinges on communication…If you don’t feel you are getting the full picture, and you don’t feel as though you can ask further, then I recommend that you continue your advisor search until you find one who is competent and with whom you connect…
Mike 12:12 pm on October 5, 2010
It sounds like you are using financial advisers that doesn’t charge by the hour or is attached to a brokerage. The disadvantage of this is that they will usually direct you to investments that are beneficial to them (front load funds, annuities, and high commission trades). They also may put you into investments that make it difficult to change advisers.
A pay by the hour non-attached financial adviser doesn’t have any ulterior motive other than to direct you to the best possible investment so that you will continue to come back. After his recommendations. you decide whether it is the best advice and then make the trade on-line at your discount broker.
The Son of Rage and Love 12:12 pm on October 5, 2010
There could very well be tax implications. I guess the question is, why are you going to a financial advisor? They do not have your best interests in mind and all they do is plug your age and other demographics into a formula and allocate your portfolio based on what they say are "time tested" (I say "outdated") principles. Why not go to a Vanguard or American Century? They will give you advice, and won’t charge you a percentage.