Ask Terry Questions giving stock broker total control

giving stock broker total control

By Terry Savage on May 24, 2015 | Investments

My husband and I have been customers of this person for about 20 years and we have done well by him. Now, instead of calling his clients each time he wants to suggest a trade, he wants to be able to act quickly without consulting us, earning a percentage of our profits, no longer charging a commission for each trade. So it behooves him to make money. Even though I trust him, I am loath to agree to this. Am I wrong? (Now we’re getting the cold shoulder from him. (We are in our late 70’s.)

Terry Says:   What this “person” is asking is FULL DISCRETION over your account — and a share in your profits.  I would NEVER, ever give anyone that permission or agree to sharing of profits.  That is absolutely NOT allowable if this “person” is an investment advisor or a stockbroker.    It’s more of a “hedge fund” arrangement — and even that would only be offered to wealthy investors.  This request is a true sign of trouble.

I would take this as an opportunity to MOVE the account to another advisor — immediately.  I know that seems tough — but this is the time to contact Vanguard or Fidelity — each of which has advisory services and uses their own low-cost funds, and will help you plan to make your money last as long as you do!  You don’t have to talk to this “person” to make it happen.  Just call the fund company (1-800-Vanguard, or 1-800-Fidelity) and tell them you want them to handle “getting” the money from where it is now.  Do it now — since if there is any “hanky-panky” going on with this person there will surely be others alert to this warning signal.

And don’t take any arguments about how you can’t get your money out.  If you have any problems in that regard, please get back to me immediately, either by posting here or with a direct email to me —



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