Taking Stock: Managing your money manager

Dear Mr. Berko:
We have a large sum of money, and as you suggested, we have been interviewing several recommended money managers and taking notes. One of the men we met is with Merrill Lynch/Bank of America. He said he knows you but did not in any way indicate to us that you would be a reference. He’s near the top of our list, and we are comfortable with his credentials and stock market philosophy. However, my wife and I think he doesn’t have much of a sense of humor. Since you didn’t like the money manager we had before and with good reason, would you give us your opinion of this fellow who said he’s known you since l968?
R.R., Joliet, Ill.
   
Dear R.R.:
I have an extremely low opinion of Merrill Lynch/Bank of America, which last year was ranked next to last in a customer satisfaction survey conducted by J.D. Power and Associates. Only JPMorgan Chase ranked lower, while Edward Jones and RBC Wealth Management ranked No. 1 and 2. 

Merrill Lynch/Bank of America clients complain that their statements are poorly structured, that their brokers are not responsive to their needs, that their brokers lack common courtesy and concern for the client and that Merrill Lynch/Bank of America research has been found wanting. Yeeech! But what would you expect from a firm whose proprietary trading activities (like Goldman Sachs) nearly ruined the American economy? 

There are lots of great brokers at Merrill Lynch/Bank of America. I know a few of them and have listened to complaints of their difficulties with the bureaucracy, its pettiness and management’s territorial disputes.

However, I’ve known the broker to whom you refer since God’s dog was a puppy. We’ve met at various investment events and seminars around the country and on several occasions were luncheon companions. And while I don’t dislike him, I’ve never liked him. This guy is dry as a stick, and you’re right — he has no sense of humor. Several times a year, he sends me a nastygram criticizing something he reads in my column, and he’s usually right — though sometimes for the wrong reasons. 

But in my opinion, he may be one of the wisest, most knowledgeable and caring brokers you will ever work with. I respect his dedication to his business, his professionalism, his resolve and his honesty.

And I wouldn’t hesitate to engage this professional as your broker. 

I’ve known two of his clients for years (they read my column, too) and I trust their praise of him. As you know, he has a minimum account size but must have lost a few customers in this downturn because I was under the impression that he was not accepting new clients.

While I can recommend him without equivocation, I would suggest that you keep your securities at Charles Schwab. Schwab, which was ranked No. 4 in the J.D. Power Survey, has excellent, easy-to-read statements, and the Schwab back office is friendly, on the spot, eager to assist you and extremely competent. Schwab’s online access is superior to Merrill Lynch/Bank of America by orders of magnitude, certainly more user-friendly and a lot more flexible. I’m sure your new broker won’t object, and he will probably sigh with relief if you tell him that you would like to maintain Schwab as custodian of your securities.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate Web site at www.creators.com.
© 2010 Creators Syndicate Inc.

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