Changing advisers

 Dear Mr. Berko: 

We have a fair-sized account and have asked our adviser (name omitted) to lower his fee from 1 percent annually to 0.75 percent, which would save us more than $10,000 a year. He refuses, saying that since he started managing our account, in August 2002, it has had a compounded annual return of 9.83 percent. According to our certified public accountant, that number is correct. But his refusal to lower our fees really disappoints us. And seeing as he doesn’t like to take our phone calls, is always grumpy, never smiles, has no sense of humor and refuses to personally meet with us more than once a quarter (to talk about our account), we want to find another adviser. He doesn’t send us holiday or Christmas cards, and by the way, he doesn’t care for your column, either. For many years, our CPA has been recommending two certified financial planners who work for Ameriprise Financial. What is your opinion of Ameriprise? Is this a good firm for us? And are there any conservative income/growth money managers whom you could recommend for us who would charge less than 1 percent?
— CS, Bethlehem, Pa.
Dear CS: 
I accidentally met your adviser more than a dozen years ago while I was in Philadelphia. I didn’t like him then. We’ve talked on the phone a few times since, and he sends me an occasional innocuous email. And I still don’t care for him. This fellow is the quintessential crosspatch and probably suffers from a genetically under-stimulated central nervous system. But don’t you dare change advisers, because this guy is good — darn good — and many investors would sin for that return. So I suggest that you ignore his miserable personality, that you count, enjoy and spend your blessings, and that you tell your CPA I’m disappointed he didn’t give you the same advice. Frankly, I’d consider employing a new CPA.
Now, if a reduction in your annual fee from 1 percent to 0.75 percent would save you more than $10,000 a year, that tells me you have a bit over $4 million under management. Considering your account’s excellent performance over the past 10 years, you should leave well enough alone. CS, you’re stepping over dollars to pick up dimes, and eventually, three things are likely to happen. 1) You’ll never pick up enough dimes to equal a dollar. 2) You’ll get a bad back bending down to pick up all those dimes. 3) That knowledgeable misanthrope of a broker you have will tell you to take a hike, and then you’ll find yourself walking barefoot on a rocky trail.
I’m also disappointed that your CPA recommended Ameriprise Financial. This company is one of the largest employers of certified financial planners in the industry. It’s also one of the most prolific retailers of high-commission non-traded real estate investment trusts, load mutual funds, expensive annuities and high-cost insurance products in the country. That’s creepy. It makes me wonder whether your CPA has a fee-sharing arrangement with someone at Ameriprise.
Now, you might be able to improve your relationship with this meathead broker by meeting with him once or twice a year. I’m not defending this scrooge, but quarterly meetings are overkill. The monthly statements you receive, as well as email alerts and dispatches you get during the week, make those meetings unnecessary. And do you think it’s possible that you’re also abusing your phone privileges with him? This man has been running your account for more than a decade and has evidently been doing it well. Why do you need to visit with him on the phone? I know he has a good assistant. What more do you want from this fellow? Let him do his job, and leave him alone. If you need conversation and personal attention, open an account with a commission salesman at Morgan Stanley or Merrill Lynch. Then enjoy yourself while you drive the Morgan and Merrill guys crazy. They’ll even send you holiday cards, birthday cards and fruitcakes for Christmas.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at Visit Creators Syndicate website at
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