My elderly Mom - and I do mean elderly - has a nice financial adviser. She is still active and watches her money. Her account is relatively stagnant. What's bothering her lately is that she is not buying new investments & will not be putting anything more into stocks or bonds, etc. yet she's still paying their fee. Her quote "I can lose money in the stock market all by myself - don't need to pay them to do it." That's her in a nutshell.

He advises her to hold so she doesn't have to pay gains - which is probably correct. She talks to him very rarely, she doesn't need any cash, so it just sits.

It is all in a TD Ameritrade account. Are there easy steps to take them off her account while leaving everything in place & not incurring fees? I've never had to do this as we have always self managed. Is that something we'd be able to have someone at TDA help with? Online or would we need to go to a branch? Of course there isn't one close to BCS.

Appreciate any advice.

I have to agree with Jerry, the FA should be communicating that to her or is and your mom isn't relaying that info. I'm sure she could reach out to TD and see if they can meet more often, if not then maybe she should move to somebody that is more involved (meet with semi or annually)

The fees on a TDA account can't be that high unless it''s an extremely large account with no discount for size, which generally doesn't happen with firms the size of TDA (Compliance prevents FA's from overcharging). Isn't the fee tax deductible? Is there any trading within the managed account by the managers? If it's a managed bundle of funds or ETF's there is generally rebalancing, it's not always helpful but it happens. My ML managed account is about 180 single stocks, none >3% of the portfolio, they trade a few times a week. ML has a policy that if there is no activity inside a managed account for a period of time ML will remove the fee. TDA might have the same policy. Typically you can move a managed account intact to another firm but some firms have policies against this, citing proprietary interests, meaning if you move they're going to sell.
If that were me I'd leave it alone. When she passes that TDA FA will be a lot of help, ditch him now and the executor will get little help at all from the lowest paid employees in the entire firm..

Doesn't TD or now Schwab ? offer a hybrid robo-advisor with personal advisor services ? It's a hybrid approach and generally will provide a simpler portfolio at a fair cost.

I use Vanguard Personal Advisor services at 30 bps and really think its excellent for what it is.

OldArmyCT said:

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The fees on a TDA account can't be that high unless it''s an extremely large account with no discount for size, which generally doesn't happen with firms the size of TDA (Compliance prevents FA's from overcharging). Isn't the fee tax deductible? Is there any trading within the managed account by the managers? If it's a managed bundle of funds or ETF's there is generally rebalancing, it's not always helpful but it happens. My ML managed account is about 180 single stocks, none >3% of the portfolio, they trade a few times a week. ML has a policy that if there is no activity inside a managed account for a period of time ML will remove the fee. TDA might have the same policy. Typically you can move a managed account intact to another firm but some firms have policies against this, citing proprietary interests, meaning if you move they're going to sell.
If that were me I'd leave it alone. When she passes that TDA FA will be a lot of help, ditch him now and the executor will get little help at all from the lowest paid employees in the entire firm..

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The investment firm can't make you sell your positions in order to move to another firm. ML is no different. There may be some proprietary funds that the gaining firm can't hold, but stocks do not have to be sold to move them.

Thanks for the replies.

I'm trying to work thru this with her. She's 90+ and does not buy/sell anymore. Her stuff has done well over the years, but now just sits. Obviously doesn't want to sell & take the big gain hit, but hates paying the fee for nothing.

To say she can be a pill sometimes is an understatement - LOL.

My parents inherited stuff from my grandfather and brought in his advisor to help with transition, etc.

After a year my dad realized that all the guy was doing was rebalancing the same 3 funds. My dad had zero stock market experience (military and teacher pensions so he never bothered). I showed him how he could do this himself for zero money. We identified very low-fee ETFs that had the same holding as the very-expensive fee funds that my grandfather's FA chose. With free trading at most major brokerages, he can rebalance for free in less than 5 mins.

I'm sure there's some good FAs out there, but most seem like crooks who prey on people who don't know how easy it is to DIY in the 21st century.

If your mom likes the advisor, perhaps first ask him for a discount as a low touch client. Perhaps ask for him to match what a Robo service would charge (usually .35 - .5%). That maintains some continuity and also may encourage some productive conversation about where and how value is being added.

deadbq03 said:

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My parents inherited stuff from my grandfather and brought in his advisor to help with transition, etc.

After a year my dad realized that all the guy was doing was rebalancing the same 3 funds. My dad had zero stock market experience (military and teacher pensions so he never bothered). I showed him how he could do this himself for zero money. We identified very low-fee ETFs that had the same holding as the very-expensive fee funds that my grandfather's FA chose. With free trading at most major brokerages, he can rebalance for free in less than 5 mins.

I'm sure there's some good FAs out there, but most seem like crooks who prey on people who don't know how easy it is to DIY in the 21st century.

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Wow, so noble of you. Great job

Make sure those accounts are listing you as beneficiary, if not already.

I'd ask an accountant the best way to get those over to you or grandkids at the best, most tax beneficial way that you can.

You, and your mom, can't escape taxes, but you can lessen the impact.

12thMan9 said:

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Make sure those accounts are listing you as beneficiary, if not already.

I'd ask an accountant the best way to get those over to you or grandkids at the best, most tax beneficial way that you can.

You, and your mom, can't escape taxes, but you can lessen the impact.

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An accountant isn't gonna help you with this. If it's taxable money then a simple TOD is all that you need.

Bizarro Jerry said:

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12thMan9 said:

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Make sure those accounts are listing you as beneficiary, if not already.

I'd ask an accountant the best way to get those over to you or grandkids at the best, most tax beneficial way that you can.

You, and your mom, can't escape taxes, but you can lessen the impact.

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An accountant isn't gonna help you with this. If it's taxable money then a simple TOD is all that you need.

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If it's a taxable account, there are no beneficiaries. It's either TOD or flows according to the Will.

OldArmyCT, the tax cuts and jobs act from '17 killed the deductibility of investment advisory fees.

Monywolf said:

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She can absolutely tell them to take the managed trait off the account. If they aren't willing, she can transfer those assets in-kind to another firm.

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Most advisory agreements empower the financial institution to liquidate in lieu of in-kind transfers. This is to prevent someone from acquiring a portfolio and immediately moving it while paying little to no fees. This actually happens more often in fixed income accounts. But I would suggest that liquidation is a rare occurrence and more so a deterrent to such behavior. Also, financial institutions are required to document that advice is being rendered and the portfolio routinely is being reviewed with the customer. A managed account that goes too long without a transaction is usually terminated by the financial institution due to compliance procedures. That doesn't mean everyone is compliant, but those are clear duties of a fiduciary.

In this case, its sounds like the managed feature probably should have been terminated by the institution for lack of activity. Certainly it is reasonable for the customer to do so. However, that doesn't mean the advisor will continue to give her advice going forward, and he'll be less likely to offer discounts on future transactions. No free rides.

deadbq03 said:

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My parents inherited stuff from my grandfather and brought in his advisor to help with transition, etc.

After a year my dad realized that all the guy was doing was rebalancing the same 3 funds. My dad had zero stock market experience (military and teacher pensions so he never bothered). I showed him how he could do this himself for zero money. We identified very low-fee ETFs that had the same holding as the very-expensive fee funds that my grandfather's FA chose. With free trading at most major brokerages, he can rebalance for free in less than 5 mins.

I'm sure there's some good FAs out there, but most seem like crooks who prey on people who don't know how easy it is to DIY in the 21st century.

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There's a big difference between being able to build a car and knowing how to drive it. But three mutual funds is hardly a portfolio regardless of size.

Monywolf said:

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Bizarro Jerry said:

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12thMan9 said:

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Make sure those accounts are listing you as beneficiary, if not already.

I'd ask an accountant the best way to get those over to you or grandkids at the best, most tax beneficial way that you can.

You, and your mom, can't escape taxes, but you can lessen the impact.

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An accountant isn't gonna help you with this. If it's taxable money then a simple TOD is all that you need.

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If it's a taxable account, there are no beneficiaries. It's either TOD or flows according to the Will.

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Incorrect. Better check the legal title of the account e.g. TOD, TIC, JTWROS, etc