Wachovia pocketing 12b1 fees in Wrap accounts
Do any other firms pocket 12b1 fees in wrap fee accounts? I have just found out about Wachovia’s policy. I thought we were rebating the fees to the client.
Not sure - I use almost all institutional class shares w/ no 12B1 or ETF's.Do any other firms pocket 12b1 fees in wrap fee accounts? I have just found out about Wachovia’s policy. I thought we were rebating the fees to the client.
We get the 12-b-1’s if the funds used have them at SF
12b1 fees beeing pocketed by firm is no different than AG edwards. Stifel also pockets fees.
my b/d does
RJFS refunds all 12b1s in wrap accounts to the client. EDJ does as well (one thing they do right).
My old bank program pocketed the 12b-1 fees. From what I understand, a firm CANNOT keep 12b-1 fees in IRA wrap accounts. LPL rebates those, but passes part of the wrap 12b-1 fto me for having at least $5 mil in their wrap program.
Remember when Danny said Wachovia is different from other firms…this is what he meant…lol…they take more of your money than other firms! Scale and scope baby!
BAI keeps them too. they did make an effort a year or two ago to make the accounts more client friendly as far as fees go. They allowed institituional shares for the money market position in a wrap account. They told us with a straight face that it was a demonstration of their commitment to their clients. cash is about 2% of most wrap portfolios. what a commitment.
[quote=plarki12001]12b1 fees beeing pocketed by firm is no different than AG edwards. Stifel also pockets fees.[/quote]
Actually you do get paid out on t12b1’s within fee based accts at Stifel
Wachovia pockets 12b1 fees in Ira wrap fee accounts. They have said they will not let American funds f2 share class on the allowable list ( no 12b1) . Only the F1 share class where they can pocket the 12b1 fee. They limit the allowable list to only A shares for many fund families.Merrill Lynch allows the F2 share class.
This is correct - no American Fund F2 shares. Don't care what other firms do...this is extremely dishonest, IMO.Wachovia pockets 12b1 fees in Ira wrap fee accounts. They have said they will not let American funds f2 share class on the allowable list ( no 12b1) . Only the F1 share class where they can pocket the 12b1 fee. They limit the allowable list to only A shares for many fund families.Merrill Lynch allows the F2 share class.
It would be interesting to see a study done at all the firms to figure out what your "real" payout is. The payouts listed on registered rep mag are just spin from their corresponding firms, with each trying to out do each other. If you are supposed to get a 40% payout, it should be on every dollar, quit playing games.
[quote=mnbondguy]
It would be interesting to see a study done at all the firms to figure out what your “real” payout is. The payouts listed on registered rep mag are just spin from their corresponding firms, with each trying to out do each other. If you are supposed to get a 40% payout, it should be on every dollar, quit playing games.
[/quote]Exactly! This was one thing I took into considerantion when moving, I alwasy kept track of my ‘real payout’ At AGE it was aleasy 37-40%, I figured based on the new Wachovia rules it would drop to 32% or so when factoring in the ticket charges and 0 payouts…so far I have averaged over 40% at SF my first 2 months Most people don’t take into consideration all the hidden BS…all the trails you dont get paid on, 0 payouts, ticket charges, haicuts etc, lowers payouts alot over what mgmt try’s to tout. I could care less how much Deferred comp raises my payout, what if the company or me isnt there to collect it, that doesn’t matter, all I care is how much ends up in my pocket every month!
Remember early last year when Wachovia accidently paid out the F1 share 12b-1 fees along with regular American fund trails and then they took them back? They had to come clean and everyone figured out what they were getting nicked for.
That’s pretty messed up not returning it to the client. They are paying you a management fee already, why should you screw them with more fees behind their backs? For funds used at SB, they are either waived, institutional shares, or credited back to the client.
Mr Big, how is that screwing the client? Some advisors and firms will charge 1.25% to 1.5% for the wrap and then refund the 12b-1's. Others, like me and my firm, charge 1% and keep the 12b-1's. Not sure what the problem is here.
Stifel does not pocket. On qualified accts they are cedited to the cust account. Non qual go to broker
As long as you’re telling the client what they are paying, then no bog deal. You’re telling me your clients know that you are charging them 1% and then another quarter, or do they think you are charging them just 1%. You charge what you charge, if it’s 2% and your client knows it, then great for you! I’m not telling anyone what to charge.
Wachovia allows I shares in many cases - if you use A shares instead of I shares where available you are an idiot inside of wrap programs.
Take a look at the allowable list. Hartford funds , Ivy , Aim etc only A shares. The I shares I am told are unintended benefits of previous program resulting from mergers.
Sounds like you are really screwing your clients.[quote=plarki12001]12b1 fees beeing pocketed by firm is no different than AG edwards. Stifel also pockets fees.[/quote]
Actually you do get paid out on t12b1’s within fee based accts at Stifel
You don't know what you are talking about. The amount of institutional share and no load share classes available are VAST.Wachovia pockets 12b1 fees in Ira wrap fee accounts. They have said they will not let American funds f2 share class on the allowable list ( no 12b1) . Only the F1 share class where they can pocket the 12b1 fee. They limit the allowable list to only A shares for many fund families.Merrill Lynch allows the F2 share class.
Whoever is telling you that is full of crap.Take a look at the allowable list. Hartford funds , Ivy , Aim etc only A shares. The I shares I am told are unintended benefits of previous program resulting from mergers.
I have been with the firm for over 12 years. Try and buy a hartford cap ap I share. I am not saying there are not I shares from other fund families like tcw or dodge and cox. The person I talked to was the head of compliance for advisory accounts. You can make your own call to advisory services. ( i don’t want to mention any names). This has been a big crusade for many of us for over 2 years. I do know what I am talking about. We and Ameriprise it seems are the only firms that pocket 12b1 fees in Ira Advisory accounts.
I don’t think this went out so I am trying again. My client in Oregon went to his normal Wells Bank Branch. He asked about the mortgage rates advertised in the branch. The teller said " oh I see you have 450,000 with us " He said I wish. It is more like 50,000. She said , you have other relationships with the bank somewhere that total 450,000. She could see the total the guy has with me. Clients will not like this and I do not this, at all. WB/WFC guys is this true ? Can the bank see my client…my client…my…clients’ asset value. I await response. And this has to be the last straw. In small towns all across america people like to lead privite lives. They do not like for folks to know any more about them than they want you to knw. So the 9.25 an hour knows now what they never wanted anyone but me and the CPA to know. They will not like this folks and the compitition is sure to let them know.
Bank of America rebates the 12b-1 fees back to the customer. You can see it in the account history on Streetscape. The Bank sucks in almost every other way but their mutual fund wrap is fairly decent. They allow a lot of institutional shares (including the super cheap Lord Abbett F shares) and the rebalancing is fairly easy. No haircut to the firm, either. Not that it matters because our payouts suck.
RedPen…I am a WS employee and bank at Wachovia (I havent closed all my accts YET) and am going to the bank branch tomorrow. I will ask the tell when she brings up my bank acct if she can also see my securities acct…will let you know.
Thank you. Just heard from the Finet representative that if the bank can see total relationship then at Finet it will be no different, So much for being independent.RedPen…I am a WS employee and bank at Wachovia (I havent closed all my accts YET) and am going to the bank branch tomorrow. I will ask the tell when she brings up my bank acct if she can also see my securities acct…will let you know.
Ice,
I do not think you are picky. I think you are exactly spot on. For what it's worth, Edward Jones rebates 12b-1s AND revenue sharing back to the client. One of the keys to a fee based advisory account is that there is no financial incentive (other than the fee) for the advisor. These issues are just one more thing for the press and clients to find out about and add it to their "I hate financial firms because....." list.[quote=Redpen]I don’t think this went out so I am trying again. My client in Oregon went to his normal Wells Bank Branch. He asked about the mortgage rates advertised in the branch. The teller said " oh I see you have 450,000 with us " He said I wish. It is more like 50,000. She said , you have other relationships with the bank somewhere that total 450,000. She could see the total the guy has with me. Clients will not like this and I do not this, at all. WB/WFC guys is this true ? Can the bank see my client…my client…my…clients’ asset value. I await response. And this has to be the last straw. In small towns all across america people like to lead privite lives. They do not like for folks to know any more about them than they want you to knw. So the 9.25 an hour knows now what they never wanted anyone but me and the CPA to know. They will not like this folks and the compitition is sure to let them know.[/quote]
Redpen,
I’m with C. (SB)
When my city rolled out the bank branches a few years ago, we were told that if a client of [mine] were to go into a Citibank branch and open an account, the screen visible to the banker would indicate they were a Smith Barney client, and, essentially, hands off, call the FA and let them handle it.
I don’t know if this helps but I can’t imagine they actually allowed that to go on. Our clients want service and confidentiality. I am very with you on bank staff–there’s a reason I don’t refer my clients to open Citibank accounts. The bank staff are horrendous. Phone/call centers are even worse for us.
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