Can a brokerage account team refuse to service me?
I have substantial accounts with Morgan Stanley (the Silich Group in particular) which I have had for a long time. I am very conservative (a really chicken money person) and typically invest in CDs available from various banks through MS. Today they informed me that I should invest in a managed corporate bond acct (with 1 to 1.5 percent management fee) which they would set up because CDs will not be paying good rates going forward (I should lock in bond rates now) and that it is not worth their efforts any longer to service my CD purchases since they make no money from these purchases.
Do I have any legal right to keep the accounts and continue my CD purchases (which I would prefer even if rates drop) or could they refuse to service me going forward unless I comply with their wishes, forcing me, should I not comply with their wishes, to move the account funds elsewhere which will be a real hassle, since they are a mixture of IRA and inherited IRA for myself and my wife and I am 72, preparing for RMD next year? Your advice would be greatly appreciated.
Terry Says
No, you don’t have any “right” to demand service from a business, one that finds your business unprofitable! And if they are going to charge you a management fee for exposure to bonds (which have their own risks), then I suggest you move your accounts.
I’ll give you a couple of suggestions. You can roll those IRAs into one IRA — except roll the inherited IRA separately.
You could move them to Fidelity, Vanguard, or Schwab — and they will either purchase CDs for you, or you can use their money market funds if you want to stay conservatively invested.
You could find a fee only FIDUCIARY advisor to look over your entire financial situation, and give you some advice. Find one you can trust here.
