Left Fidelity

[portart]

I recently left Fidelity for Schwab. Some years back I had a meeting with my financial rep at Fidelity to go over things in general. They schedule these once a year with accounts over a certain amount. In any case, to my surprise, there was another party (un invited by me) to sit in. I figured it was another financial advisor. Turns out it was someone trying to sell me an annuity. Apparently Fidelity was not satisfied with me keeping money their in non Fidelity acts and wanted a piece of the pie. In any case, I should have pulled my accounts and moved right then and there but I hung on for a few few years until recently. I had a pre retirement meeting to go over expenses and potential income when, once again, I had a issue with the same advisor. She basically said my PP portfolio was "dangerous" and she couldn't do a Monte Carlo through their software and create a retirement plan for me! Apparently she was unimpressed with my average yearly gain of almost 8% over the last ten years that I did without any help from her or anyone else. I said I could give her HB's little book to read which could be done inside of an hour but she refused. At this point I gave up and moved over to Schwab last week. The financial guy at Schwab was just the opposite. I ordered HB book from Amazon and had it shipped to hiim. He also researched PPRFX to get an idea on the history of PP gains over time. He said he would find a way to do a retirement plan based on the information I presented him.

[ns2]

I used to get those calls from Fidelity every year but they never tried to sell me an annuity. They wanted to offer me a personalized investment service for a 2% cut. I asked them what would be the difference between that and just buying one of their target date funds, besides the extra 2% cost. He paused for a moment and said that was a good question and nobody ever asked it before. I figured next time he called he'd have an answer ready but I never heard from him again.

I'm still with Fidelity but moved our Roth IRA's to Vanguard last year because Fidelity wants $75 to buy Vanguard funds.

[Pointedstick]

I used to get those calls from Fidelity every year but they never tried to sell me an annuity. They wanted to offer me a personalized investment service for a 2% cut. I asked them what would be the difference between that and just buying one of their target date funds, besides the extra 2% cost. He paused for a moment and said that was a good question and nobody ever asked it before. I figured next time he called he'd have an answer ready but I never heard from him again.

Man, wall street. Man.

[portart]

I think they have meetings and instruct these people to find ways to extract some money. I go to Fidelity so I can do my own trading. If I wanted to be managed I would go to Bears Sterns.

[Tortoise]

I recently left Fidelity for Schwab.

Just be aware that Schwab charges a $25 commission to sell Treasury bonds (they don't let you do it online; you have to call them up and have a fixed-income rep do it for you). And if you're selling multiple bonds (i.e., multiple CUSIPs), they charge you $25 for each bond.

I had known about the $25 commission, but I didn't learn about the "per bond" nonsense until I recently rolled over my Schwab 401(k) to Vanguard IRAs. I had four bonds, so for 5 minutes' work, the fixed-income guy earned a $100 commission from me.

[ns2]

I used to get those calls from Fidelity every year but they never tried to sell me an annuity. They wanted to offer me a personalized investment service for a 2% cut. I asked them what would be the difference between that and just buying one of their target date funds, besides the extra 2% cost. He paused for a moment and said that was a good question and nobody ever asked it before. I figured next time he called he'd have an answer ready but I never heard from him again.

Man, wall street. Man.

You know, when I think about it there probably was no good answer to the question I asked. What is he going to say - we don't put our best and brightest people in charge of the targeted retirement funds, we save those for those willing to pay 2% more?

[Reub]

Vanguard anyone?

[Ad Orientem]

Vanguard anyone?

+1

And all of this reinforces my preference for ETF's for everything except gold.

[hedgehog]

She basically said my PP portfolio was "dangerous" and she couldn't do a Monte Carlo through their software and create a retirement plan for me!

Interesting. How to do a Monte Carlo on your portfolio from the safety of your home?

[Tyler]

I've used Fidelity for years. I enjoy using their web tools, and have never spoken in person to a financial adviser other than to politely decline their offer of an in-person portfolio review (they seem to call about once a year) or to get help rolling over a 401k into my IRA.

That said, I'd be similarly put off if they did an uninvited hard sell on an unrequested financial product. Perhaps staying "virtual" has helped me avoid that.

[smurff]

If you have a meeting with a financial advisor and they bring in someone else to participate, ask who that person is and why they're present at your meeting.  If you don't want them there, ask them to leave.

My banker asks for permission before bringing any other employee to meetings.  You are entitled to respect in the privacy of your finances.

[portart]

The thing is, I trusted these people so I didn't really understand his being there other then someone to help me with financial planning. The annuity thing didn't come up right away so it was, in my mind, like a move was being put on me once they got down to talking about it. Being that I manage my own money, I don't just jump into things without first getting my hands around it. I was mainly incensed by not first being told or asked. The funny part was that they did get me thinking about so I started researching it. I have a friend who works at Bears Sterns who I chat with about strategies and he was the one that ultimately sold me the annuity. At the time is was a 7% bump with a spousal rider so I committed some money to it and it's guaranteed lifetime income. They don't have anything approaching these terms anymore as rates have been down so long, the insurance companies have stopped selling them except with lousy terms. The Fidelity one didn't have the same benefits so I passed on it. In any case, I am all out of Fidelity and into Schwab. So far, they have been all I had hoped for in starting my planning up again with no games. I am really getting a lot out of this site.

All of you are awesome with your knowledge and sharing. I like the philosophy of the PP. It's been good to me and the last few years have been pretty boring but hopefully it will start showing some gains again.

[GT]

You know, when I think about it there probably was no good answer to the question I asked. What is he going to say - we don't put our best and brightest people in charge of the targeted retirement funds, we save those for those willing to pay 2% more?

I am sure a good salesman would have come up with boiler plate scripts for the different types of folks they encounter.. How about:

Person who is hands on:

You appear to be a person that likes to research and analyze an investment. A person that likes to get your hands around an issue before making an investment decision. More hands on in approach. Am I right? Well you see target date funds are a one size fits all approach which can work well for most novice investors that just want average returns. What I would help you do is really tailor your portfolio to your long term needs as well as review the latest trends and market research when we meet during the annual portfolio review.  Think of me as your personal assistant.  Well let’s compare the target date fund based on your retirement date. Oh I see it would have you at 70% stocks and 30% bonds. Well I would tailor your portfolio to 65% stocks 35% bonds based on your risk tolerance. And look at the morning star “5 star”? rated actively managed funds I would place you in....etc.. 

Person who is hands off:

You appear to be a person that likes to get out and enjoy life but also wants to know that your investments for the future are being handled in a professional manner.  Am I right? Well you see target date funds are a one size fits all approach which can work well for most novice investors that just want average returns. What I would help you do is really tailor your portfolio to your long term needs by using my years of experience to really research and find the best investment plan for you.  Think of me as your personal research assistant.  Well let’s compare the target date fund based on your retirement date. Oh I see it would have you at 70% stocks and 30% bonds. Well I would tailor your portfolio to 65% stocks 35% bonds based on my research and industry experience. And look at the morning star “5 star”? rated actively managed funds I would place you in. No need to bore you with the details but you could have really made some money last year....etc..etc…

[portart]

Ha.. That was great! You left out the PP guy..oh I forgot, Fidelity thinks that is dangerous, or so they said

[barrett]

Portart, I have some good news for you. I recently heard Stephen Dubner of Freakonomics fame claim that owning an annuity contributes to living longer. Here is the radio link:

http://www.marketplace.org/topics/life/ ... ive-longer

The part about the annuity is toward the end. Tune in at the 4:20 mark. Evidently, owning an annuity gives you an incentive to keep on living just so you can get your monthly check. Might get myself one just in case!

I also used to get those pitches from Fidelity anytime I had a large (for me) cash position. Lately they have been better. In any case, having the unwelcome dude sit in on your meeting might have inadvertently added a couple of years to your life!

[dualstow]

I was at a party in 2012 or '13 with two Fidelity reps in attendance. They were pretty open and honest about everything. Of course they'd had four beers each. But they didn't say anything that you all don't already know. They basically give the same advice to everyone with some exceptions, and they're not in business for free. That's my paraphrase.

[portart]

The way it looked to me is that they lean on the people who meet with you to discuss your portfolio. Rather then it be a meeting to find out what YOU want, they turn it into what they want. It's all BS and good riddance. In three weeks with Schwab, I got more honest and open help then in 20 years with Fidelity.

[HB Reader]

The way it looked to me is that they lean on the people who meet with you to discuss your portfolio. Rather then it be a meeting to find out what YOU want, they turn it into what they want. It's all BS and good riddance. In three weeks with Schwab, I got more honest and open help then in 20 years with Fidelity.

FWIW --

I have had accounts (mine and about a dozen I manage for others) at Schwab since 1981.  I have never had any bad experience or difficulty whatsoever in getting straight forward answers to administrative or investment questions.  A couple of times they have tried to sell me "advisory" services of some kind, but after telling them I wanted to manage things my own way they have always respectfully backed off.  Over many years, I have found them to offer the best combination of service, range of products and price (although not always the absolute lowest) in the industry for a self-directed investor. 

Schwab was among the first of the so-called "discount" brokers to emerge after the brokerage industry was deregulated in 1975.  They were also one of the first brokerage firms to offer holding no-load mutual funds in customer accounts after deregulation.  In my recollection, highly monopolistic fixed (i.e., VERY high) commission rates by all brokers were common prior to 1975.  The old-line brokerages (like Merrill Lynch, Dean Witter, and others) vigorously fought the 1975 deregulation by the SEC of fixed commissions by arguing that average investors were unsophisticated and needed the special "expertise" that their commissioned brokers provided. 

My wife had a couple of accounts with Fidelity in the early 1980s before we were married.  We have kept those accounts for our less active investments and have generally had good basic service (and gradually reduced commission rates over the years) from them, although we are more frequently forced to remind them that we are not interested in the various "products" they peddle.  In my experience, they are better than most out there, but not as good as Schwab. 

I hope this post doesn't come across sounding like a grandfather's advice.     

[StdDeviant]

I have all of my investments at Fidelity, and have seen no reason to switch.

I, too, would be very annoyed with the annuity-selling experience you had. I've avoided that because I've never wanted their advice, so I've never taken them up on their offer to meet with me. As a true believer in the permanent portfolio, I really have no reason to waste my time discussing my investments with them. I don't need to spend my time explaining the permanent portfolio to someone who obviously will disagree with its wisdom based on all their prior training. And I'm not going to get profound investment advice from some young kid assigned to consult with the likes of me. Maybe if there were a couple extra digits in my portfolio I'd meet with someone who had some great advice for me, but at the sub-million dollar level, what am I going to learn? And a sage once observed: "There's no point trying to teach a pig to sing. It wastes your time, and annoys the pig."

I have my stock portion invested in Fidelity's Spartan Total Market Index Fund Advantage Class (FSTVX). The expense ratio is 0.06%. There are no fees to buy, sell, or maintain. I'm happy with that.

I have my long-term bond portion invested in Fidelity's Spartan Long-Term Treasury Bond Index Fund Advantage Class (FLBAX). Duration 16.06 years; weighted average maturity 24.7 years. The expense ratio is 0.10%. There are no fees to buy, sell, or maintain. I'm happy with that.

I park my cash in a combination of two funds:

1. Fidelity Treasury Only Money Market Fund (FDLXX). The expense ratio is 0.42%, which I'm not happy with (although I keep a pretty small percentage of my cash in this fund). There are no fees to buy, sell, or maintain. I would welcome suggestions for better alternatives, especially at Fidelity (keeping in mind that I usually keep my balance below $10,000, with the remainder in the fund discussed next). I'm bothered that this fund has returned 0.01%, both last year and for the previous 3 years, yet they manage to scrape off 42 times that much in expenses. Not sure what I'm missing here, but how laborious is it for Fidelity to buy and hold T-bills?

2. Fidelity Spartan Short-Term Treasury Bond Index Fund Advantage Class (FSBAX). Duration 2.54 years; weighted average maturity 2.7 years.  The expense ratio is 0.10%. There are no fees to buy, sell, or maintain. I'm happy with that.

Overall I'm content with keeping everything at Fidelity. It's not that I'm in love with them. I particularly don't like that when I call with a question, I invariably have to explain everything to the rookie they've assigned to deal with level one calls, who the vast majority of the time has to listen to what I'm asking, then bring someone else on the line to answer. If I had lots of questions, this would be very annoying, but I'm fairly self-sufficient and can do almost everything I want to do on their web site.

But I like the convenience of having everything at one place. I manage my own accounts, my common law wife's accounts, and my father's account. Wife is still working and has changed jobs several times in the past few years. Fidelity is the most frequent investment company used for her retirement, as it was when I worked. I just finally decided to consolidate everything into one, and decided that the biggest company would be the safest choice, using the "too big to fail" theory.

Oh, as for the gold, I'm not comfortable using ETFs, but I currently do, and plan to gradually turn at least some of that into gold coins. But for now I have that split between two ETFs--GLD and IAU. There's a flat $7.95 fee, I think, to trade those. I haven't done so in several years, so it might have changed, but it's nominal and inconsequential to me if I have to incur an $8 or $16 fee every few years.

Any thoughts or suggestions would be appreciated. Thanks!

[ns3]

I have all of my investments at Fidelity, and have seen no reason to switch.

I had all my investments at Fidelity until last year when I opened up accounts at Vanguard for our Roth IRA's (primarily because Fidelity charged $75 to buy the Vanguard fund I wanted).

I have no major complaint with Fidelity except that funds seem to become available with Vanguard more quickly than they do with Fidelity. When I transfer funds with Fidelity it always seems to be sitting in "Pending" status for a while and I haven't seen that with Vanguard yet.

[sophie]

I've got accounts at both Vanguard and Fidelity.  I imagine that both of them are in business for a reason, so getting hustled now and then doesn't much bother me.  I got a call from Fidelity too, and just told them I wasn't interested in anything other than passive index funds.  That ended the conversation very quickly.

To my mind Fidelity's main two advantages are that it's easy to call and get a question answered, and the bond trading platform.  Buying Treasuries directly is great.  Expense ratio is zero and the only cost is the buy/sell spread.  And no need to play any games with the broker when you want to sell.

[dualstow]

...
To my mind Fidelity's main two advantages are that it's easy to call and get a question answered, and the bond trading platform.  Buying Treasuries directly is great.  Expense ratio is zero and the only cost is the buy/sell spread.  And no need to play any games with the broker when you want to sell.

And you can visit them in person as well. I do that once a year to make a 401(k) contribution as I have no taxable Fidelity account from which to transfer funds.

[portart]

Thanks, that's great news since I did buy one in 2009 from Prudential with a 7% bump compounded each year (they long since have stopped offering such a sweet deal with a 5% a year withdrawal off the total). However it has a spousal rider so even if i kick off early, my wife with long living genes, will keep collecting checks. I like the fact that after I go, even if she mis manages some of the savings in the IRA, she will still get a check for 60k a year or more depending when I start the payments. They all knock variable annuities but for a portion of my money, we will get guaranteed income. I figured out that without the annuity, the money I put into it in 2009 would run out in 15 years measured against the value I paid for it. Naturally it would have also grown since then if I left it invested but not that much more in a PP making it a nice income addition to SS.