Fee Questions

or Register to post new content in the forum

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Mar 26, 2008 9:54 pm

I am really new (3 weeks of production) and I have a prospect who is currently with another major wirehouse and I am reviewing his statement,etc to see where improvements can be made etc. He SEEMS interested in moving over to me but...

 
My question is that I seehis portfolio has a bunch of B shares as well as A shares with high (i think) expense ratios. I know it is not good to rip on his current broker but is this something I should address with him?
I do not want to get to carried away and think that I am going to be able to get the account without having to do much but on the other hand I do not want to be the guy who rips on other brokers.
 
also - some of the mutual funds do not have a date purchased and in looking into them, they have a Contingent Fee attached to them...in this case what is the rule as far as if he has held the funds long enough for the fee to expire? I do not want him to get hit with termination fees.
 
Any insight is welcomed and appreciated.
Mar 26, 2008 10:31 pm

You should definitely use the numbers to show how much he is actually paying.  Just don't rip.  The main reason not to rip another broker IMHO is that it can make the client feel like stupid for not understanding what was going on and you never want the client to feel stupid when they are talking with you or they won't want to come back.  (I learned that one the hard way.)

 
As far as your mutual fund purchases we would need much more info as it varies by fund family.  You should sit down with your mentor and/or a home office specialist with the details in hand and get it figured out.
Mar 26, 2008 10:34 pm

Also you need the purchase date.  However, I wouldn't worry too much about the surrender charges until you have the account transferred.  #1) It's a waste of time since you may never get the account anyway.  #2)  If the funds need to be held longer it's much better for you to hold them.  #3) The figure may scare the client into not wanting to surrender them right now which gives them less motivation to transfer the account.  


 
Show them what they're paying.  (If you can do better)  And show them all the reasons they would be better of with you.  Then sign over the accounts and worry about the details in your next appointment.
Mar 27, 2008 1:35 am
cppr33, it sounds as if you are focusing on what he has instead of what he wants.
 
also - some of the mutual funds do not have a date purchased and in looking into them, they have a Contingent Fee attached to them...in this case what is the rule as far as if he has held the funds long enough for the fee to expire? I do not want him to get hit with termination fees.
 
Whether someone holds onto a "B" share or dumps it, they are paying the fee.  It's just a question of whether they are paying it at one time, or paying it yearly by being charged an extra %. 
 
If he seems interested in working with you, have him sign the paperwork.    Move over everything lock, stock, and barrel and then figure out what you should be doing with him.

 



 
 
Mar 27, 2008 7:09 am
anonymous:
cppr33, it sounds as if you are focusing on what he has instead of what he wants.
 
also - some of the mutual funds do not have a date purchased and in looking into them, they have a Contingent Fee attached to them...in this case what is the rule as far as if he has held the funds long enough for the fee to expire? I do not want him to get hit with termination fees.
 
Whether someone holds onto a "B" share or dumps it, they are paying the fee.  It's just a question of whether they are paying it at one time, or paying it yearly by being charged an extra %. 
 
If he seems interested in working with you, have him sign the paperwork.    Move over everything lock, stock, and barrel and then figure out what you should be doing with him.
Thanks. I have a good plan set up for him going forward but I do not care for any of the funds he is in and I really would like to liquidate the accounts (SEP IRA, IRA) and have them come into me as cash so we have a baseline to track/discuss performance. But like the Sgt. Highway said ...adapt and overcome.
Mar 27, 2008 8:30 am

not to be a wet blanket but it seems you have absolutely  no experience.  You appear to lack basic knowledge in the area of mutual funds and to be honest for someone who is licensed who does not know the simple answers on cdsc and the difference of a and b shares on mf is a bit scary. B shares are not evil, nor are A shares the answer for every situation either. I would recommend you sit down with a senior rep and discuss this account before you do anything or it will blow up in your face.

Mar 27, 2008 8:38 am

How does having them come to you in cash, give you any greater baseline to track/discuss performance?  Do you have anything to offer this guy other than your belief that you are a better fund picker than his previous broker?

Mar 27, 2008 9:22 am
anonymous:

How does having them come to you in cash, give you any greater baseline to track/discuss performance?  Do you have anything to offer this guy other than your belief that you are a better fund picker than his previous broker?

 
In my discussions with him, he really does not understand how to read a statement. He does not get how reinvested dividends add to his costs basis on the statement. I thought that bringing it in in cash would allow me to say OK - we brought in X when you came to me and you have added Y of your own money over the years. the additional cost basis you have is the reinvestment of dividends..etc. I just want to use it as a jump off point so to speak.
 
I do not believe I am a better fund picker than anyone. I just want to show this gentleman that I want to be his FA for the long haul and he will know where everything is going and what he is invested in....now he has no clue and needs to be educated.
Mar 27, 2008 9:40 am
jamesbond:

not to be a wet blanket but it seems you have absolutely  no experience.  You appear to lack basic knowledge in the area of mutual funds and to be honest for someone who is licensed who does not know the simple answers on cdsc and the difference of a and b shares on mf is a bit scary. B shares are not evil, nor are A shares the answer for every situation either. I would recommend you sit down with a senior rep and discuss this account before you do anything or it will blow up in your face.

 
i understand how the different classes of MF's work. I am building my practice on managed money and as the date of purchase for the B's are not listed, my question was how does one find this out as to avoid unncessary fees being charged to the account as if it comes in I want to place it in my firms managed platform.
 
i know there is not a cookie cutter approach to anything. I think you missed the point of my question. thanks for your honesty.