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Helping elderly parent

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Chavak
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Helping elderly parent  Reply with quote  

My 91 year old mother's financial planner retired and a new man has taken over. He came and spoke to her about general concepts and ideas. After he left he sold some of her stock and invested the money into a fund. She claims she did not consent for him to take any action on her funds, and that he was to return Tuesday Sept 13 to make a decision.

He put her into a fund that has a 4.25% load and also charged her $1700 for selling some of her other stocks and purchasing the new fund.
The load fee comes out to $4675 and add the commissions that makes a whopping $6375 this transaction cost her. The fund is state and federal tax free, and the 1 year return averaged 2.56% and 5 year 3.60%.

My contention is that she is frail and may not even live another year, and she certainly is not going to make enough of a return ($110, 000 invested) in the next year-or two-to even break even with this investment. I think it's a bad choice for her and intend to discuss this at the meeting Tuesday.

Am I missing something, is this actually a good investment? If so, how?

thanks in advance!
Post Mon Sep 12, 2016 12:58 am
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ken-do-nim
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$1700 in commissions? That's outrageous all by itself. Sounds like a horrible situation.

Without knowing what stocks were sold, and the overall balance of the portfolio, I can't say much else.
Post Mon Sep 12, 2016 1:18 am
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Chavak
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there were two reits, Home Depot stock, and Kinder Morgan stock.

I hope it's okay to mention names here!
Post Mon Sep 12, 2016 1:20 am
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oldguy
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Yeah, that >$6000 fee to stir a $100,000 account was a pure fee-grab. And the choices were inappropriate, she should not be placed into individual stocks - nor should she be trading reits. I would go to the manager of the firm. (Congress has been studying ways to limit/punish brokers who push senior citizens into inappropriate high-commission products.)
Good luck at the Tues meeting, I'm hoping that you can get those trades reversed. (You might need to threaten to submit a formal complaint to the SEC).
Post Mon Sep 12, 2016 3:25 am
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Chavak
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quote:
Originally posted by oldguy
Yeah, that >$6000 fee to stir a $100,000 account was a pure fee-grab. And the choices were inappropriate, she should not be placed into individual stocks - nor should she be trading reits. I would go to the manager of the firm. (Congress has been studying ways to limit/punish brokers who push senior citizens into inappropriate high-commission products.)
Good luck at the Tues meeting, I'm hoping that you can get those trades reversed. (You might need to threaten to submit a formal complaint to the SEC).


The two reits, the Home Depot and the Kinder Morgan are the stocks that he sold and he put her into a tax free (fed and state) Bond fund. All without her permission, according to her.

What is the problem with reits, which she was already in? I am hoping just to reverse everything, but are reits no longer appropriate?

Many thanks.
Post Mon Sep 12, 2016 3:45 am
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oldguy
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quote:
The two reits, the Home Depot and the Kinder Morgan are the stocks that he sold


Sorry, I had it backwards, I thought that he BOUGHT those.
The tax-free muni bond fund is a good choice for an elderly person that needs both income and safety. There should be no individual securities (such as stocks & bonds). With Funds the risk is spread across 100, 200, 500, items, a crash of any single one has only a very small effect. Conversely, an individual stock/bond could fail, go bk, and she would not have time to await a longterm market correction.
Post Mon Sep 12, 2016 2:29 pm
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Chavak
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quote:
Originally posted by oldguy
quote:
The two reits, the Home Depot and the Kinder Morgan are the stocks that he sold


Sorry, I had it backwards, I thought that he BOUGHT those.
The tax-free muni bond fund is a good choice for an elderly person that needs both income and safety. There should be no individual securities (such as stocks & bonds). With Funds the risk is spread across 100, 200, 500, items, a crash of any single one has only a very small effect. Conversely, an individual stock/bond could fail, go bk, and she would not have time to await a longterm market correction.


If she was younger and in good health, I might agree with the fund. But over $6000 fees for a $110,000 account seems excessive and I doubt she is going to live long enough to recoup the charges. She was interested in something that was going to pay her more income per month because she is losing money from an annuity that comes due next August-again she probably won't live that long so she is worrying about this for nothing. She also has plenty of money to live on if she doesn't make any changes, she doesn't want to use it because she thinks she needs to leave it for us. I assured here that's not necessary Smile

Anyway, should I let things go and assume at best she might break even? Or have her go back to her previous things (if it can be reversed)?
I'm not wild about this company anyway because for the last several years they have been only buying and selling individual stocks for her, and they charge $499 or more a trade. Seems very excessive to me.
Post Mon Sep 12, 2016 2:49 pm
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ken-do-nim
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I thought the days of $499 a trade or more were LONG gone. Wow. You are going to have to fire that company and sue them to recoup the damages.

There was another thread on this site about why doesn't everybody use a financial advisor - this thread certainly is a big reason not to.

At any rate, if you are looking at a high yield municipal bond fund to put her money into to draw income out of, I don't own any shares of HYD but I think it is a good one.
Post Mon Sep 12, 2016 3:53 pm
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Barbarita
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I think you should live with your old parents and help them always. Why I say it because I was far from my Mom during 2 years. We lived in defferent countries because I've met my love abroad. But when my Mom became sick and she needed me to be with her I decided to make everything to be together. So I ask my husband to take her to our city (California) but it was so difficult, the procedure of immigration is very slowly... Thanks this company http://usimmigrationforms.com/ we've done it as fast as we could. Now she is near and I'm looking after her. Money never can not make a human happy, remember it!
Post Tue Sep 13, 2016 4:36 pm
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