Question for all wirehouse FA's

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Feb 12, 2014 7:00 pm

I recently discovered a problem and wanted input form other wirehouse FA's.

Recently my firm charged an account an annual fee of $60. The account had just been closed because one of the 2 trustees had died and we needed to change the tax id to the surviving spouses. This account held about 20k of mutual funds and had somehow been reassigned to me.

I never recieved any notice of a fee being charged and the account held a debit balance since October of $60.00.

Low and behold on Monday my commission run had a write off of $60. And you guessed it the firm couldn't collect the annual fee so somehow they think it's my responsibility.

My Manager and Division Manager agree with me that I shouldn't be responsible for a debit that I didn't create.

We are being told it can not be reversed or corrected now and although the account has assets they can't go back and deduct the fee from the client. My Division Manager assured me that he will get me the money back from the division or the office, probably as an additional expense allowance.

My problem here isn't the $60, it's how in the world can we be responsible for a debit balance that we didn't create? My fear is the firm creates some other fee for accounts and multiplying this situation costing money that we had no control over.

I spoke to an attorney today that specializes in securities law and his firm is a prominent labor laws group. His reaction was this is absolutely illegal and he is organizing a class action group to see if there is any merit in pursuing the legality of firms being able to debit FA commision accounts for items that were not controlled by the FA.

Any thoughts or experiences are appreciated.

Feb 12, 2014 7:03 pm

Sorry for the poor grammar, I wrote that fast.
And no I don’t want to hear about why I should be an RIA to avoid this.
I appreciate you just sticking with the topic.

Feb 13, 2014 10:45 am

Choose your battles. Wirehouse FA’s feel like they get the shaft over stuff like this on a daily/weekly/monthly basis. Same goes for the carousel of pay grids that seem to change with the seasons. A wirehouse may actually care that you’re mad if you are a $1mm producer. But a $1mm producer wouldn’t be making a stink over such an issue.

If little things like this bother you, then you were actually onto something about maybe consider RIA route. Although you’ll have a new set of challenges there.

My advice is to drop the issue, focus on your clients (instead of yourself and your $60) and use that wrong-doing as political capital the next time the wirehouse does something to you that you feel is unfair.

Again, pick your battles…

Feb 13, 2014 11:16 pm

Well Mr Gekko, thanks for sticking to the subject. Yes I am over a 1 million in fees alone. The point is it shouldn’t matter what my gross is.
Another broker in my office had to pay for a client that used his debit card and over drafted by 370 dollars. Now why in the world would the broker be responsible for that? Well he was, I am not even sure how a persons debit card would allow you to take out more than you had in the account. But it did
I am not choosing a battle, I will let the law firm decide if they want to pursue it.
And again, I have no interest in your RIA

Feb 14, 2014 11:59 am

If that is what is going on at your wirehouse then that is really F’d up. But all wirehouses have become bank sales channels anyway, so who knows for sure.

You can overdraft a debit card if you make a purchase at say midnight on Saturday, when the merchant doesn’t cross-check against the bank that the funds were drawn on.