Ameriprise Experience

Back in the fall of 2009, I got a call from an Ameriprise advisor who’d gotten my information from a colleague. I’d never had a professional advisor, but like a lot of people, always felt uneasy about how my retirement portfolio was doing. And coincidentally, I had just rebalanced my entire portfolio. At our initial consultation, she talked a good game, claiming that she could essentially turn $1 into $1.50 in a year. I knew enough to recognize that as a pitch, but decided to sign on.

During our subsequent series of discovery meetings, she poked holes in my current portfolio (I didn’t take it personally), and made my head spin with long explanations of benchmarks, alphas, betas…. It was a lot to take in! I broke down my expectations for our engagement in simple terms. I wanted to try this for a year and my benchmark was simple: I just wanted to know that she was doing better than I was doing on my own. Even if she broke even, I’d consider her advisory fee the cost of not having to worry about my portfolio.

So we continued on our way. I was slightly peeved that a bell didn’t go off when I told her I’d just rebalanced my portfolio, so I was hit with some short-term trading fees. I would’ve thought a professional would hear that and say, “Hey, let’s wait a month-or-so before starting this.” But that may have been an unrealistic expectation. There was nothing to be done about it by then anyway, so I chalked it up as a misunderstanding.

I don’t know what level of communication is common for these engagements, but ours was pretty infrequent. In fact, I later realized that she missed the quarterly call that was in our original plan. As we approached our midyear meeting, I wanted to see how she was doing against my “benchmark”. But how? Here’s a tip for anyone who shares my expectations for a professional advisor: Open a hypothetical portfolio at Morningstar.com. Look at your last statement from your old brokerage and enter all of your investments. Morningstar will track them and even calculate dividend reinvestments.

I told my advisor that I would be bringing my Morningstar reports to our midyear meeting to see “what would’ve happened if I’d never walked through that door.” The results weren’t great. Her investments were trailing mine by quite a bit. I have no idea whether she was offended by this exercise, but to me it made perfect sense: how else was I to know what I was getting out of this? I was certainly not standoffish; I had committed to this for a year and I owed it to my advisor not to jump the gun.

The next six months were just as silent as the previous ones. I watched her portfolio plug along and compared each statement with my Morningstar portfolio. Our end-of-year meeting was approaching and there was still a significant gap between them. Here’s where things got tense: she delayed my EOY meeting several times. On one occasion, she canceled on me while I was on my way to her office. Was she avoiding our meeting intentionally? Who knows. What I do know is that the final meeting was brief. We looked over her investments and my Morningstar portfolio and we both knew that it was unlikely that I’d continue with this. She told me to give it some time before I made a final decision and even asked for some tweaks to my numbers to try to explain the differences. Any way you sliced it, the answer was clear: this was a loss.

I began the process of moving the investments back to my old brokerage. That was fun! Of course there were exorbitant transfer and closure fees on EACH account. I’d remembered that at our first meeting, my advisor had mentioned that her fee was refundable if I wasn’t satisfied at the end of our engagement. I downloaded the form from Ameriprise’s website and sent it in. Lo and behold, my refund request was rejected because I didn’t send it in within 30 days of the one-year anniversary of our first meeting! In other words, if our final meeting hadn’t been delayed several times, I wouldn’t have missed the deadline! How convenient!

After months of back-and-forth with Ameriprise corporate, I finally received my refund. Does the story end there? No, of course not! I still had to liquidate my advisor’s investments at my new brokerage. What, they’re special “Class B” funds with exorbitant “deferred sales charges”? How convenient again! To top it all off, there is still one fund that I can’t get rid of: some funky “real estate investment trust” (REIT) that she signed me up for. Yeah, google “REIT” and “Ameriprise” and you can read about a class-action lawsuit they were involved in regarding hidden commissions. Apparently, the REIT had been doing so poorly that a few months after she purchased it, the REIT was closed for all purchases and sales! It’s now in some “cryogenic” state for an indefinite amount of time. Wait for it… HOW CONVENIENT THRICE!

Hopefully this story will have a real ending soon, but until then… YOU HAVE BEEN FOREWARNED. Adios, Ameriprise!

UPDATE: I am still unable to unload the REIT (“Hines” REIT, to be specific) that Ameriprise dumped me with. Hines just informed me that their value nosedived by 20% but there’s still no way to dump it. Well, actually there is a way: a few third-party companies (“Mackenzie Patterson Fuller” and “MIRELF”) have sent me letters offering to take it off my hands for less than half its value. How kind!

Thinking back, I recall some interesting advice my Ameriprise advisor gave me at our final meeting. She said, “Don’t sell the Hines REIT. That’s one you’ll want to hold on to for a long time.” I imagine she said that because she already knew that the fund had shut down sales and I couldn’t sell even if I wanted to! Thanks for the advice!

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