Fidelity -vs- Ameriprise archived

What is your opinion and experience with either of these companies at proactive management of your money:

Fidelity -vs- Ameriprise

Both are great if you want someone to sell you products every time Product Development comes out with the newest, latest, spiffy version of what the firm wants you to buy.

Both are not great if you want someone to develop a focused financial plan based on your age, goals, objectives, risk tolerance, family situation, tax consequences, estate and trust planning desires, etc. Both firms tend to be influenced by the need to push product over planning, to my way of thinking.

You might be better off identifying a CFP to work with and then execute the plan or have a money manager execute the resultant plan.

I'd go other directions if I wanted proactive porfolio management.

I like Fidelity for their basic online trading and array of mutual funds and like the service of the local branch. Ameriprise is more focussed on selling you their mutual funds and doesn't have the greatest reputaion for individual advice (of course, this varies on who you may be dealing with).

For proactive management I might suggest someone that deals with Capitol Investments/American Funds that have a pretty good track record.

I recently rolled over a 401k to a Fidelity IRA. I met at a local branch with a financial advisor (right in Millburn) and we discussed all the stuff that Innisowen mentioned "age, goals, objectives, risk tolerance, family situation, tax consequences, estate and trust planning desires, etc."

The products that my adviser came back with were fitted to the above parameters, but I haven't gotten any proactive input since I set up the IRA. I think the proactivity will have to come from me if I want to update my portfolio. Given the current uncertainty in the markets, I'll probably just wait it out with what I have.

Ameriprise will steer you into load-based mutual funds which is how they make their commissions.Fidelity has an extraordinary array of no-load funds both within the Fidelity family and outside it in their "supermarket." The data that I have seen does not indicate better performance from load funds so you are paying more money for a product that is not necessarily better.

My experience is that the advisers at Fidelity will get you started, but you are on your own until your assets pile up in their accounts. Then you get a free portfolio review, but afterwards you can expect to pay 1% for any guidance.

OKay.... I think we have established that neither company will support proactive planning (but they will meet with their client once a year or quarterly) to but nothing on proactive management.

My next questions is about CFP (Certified Financial Planners):

- Are they really any better than Ameriprise and Fidelity?
- Are their companies out their with CFP's that are more proactive with the client (any recommendations to review?)?


TD

Not taking anything away from comments made by previous posters, but we use Ameriprise and found that they have been pretty proactive, particularly with respect to college, some business and preliminary retirement planning. That may be a function of the advisor we have, but I would consider the support we have received to be pretty forward-looking.

Our relationship with them started with the development of a family-specific long-term financial plan (which we paid a moderate amount for). It was delivered without any obligation to use Ameriprise (at that time it was American Express Financial Advisors). We stayed with them, invested as recommended by the plan and continue to use the long-term plan as a benchmark for us.

At each of our periodic meetings, the team (an advisor and a market "guru" of sorts) also comes with recommendations to shift assets (generally within funds, so at no cost) to reduce overweighting or to respond to potential weaknesses anticipated in various sectors. They do favor Riversource funds, which are their own products, but we feel that they provide a service and deserve to be paid for it.

We used a CFP in the early 1990s and found him lacking because we fell below his threshold for total assets. I don't think that invalidates the field; it probably says, whoever you pick, make sure you fit their view on how they make money.

FIdelity just re-opened their Magellian Fund if this is of interest to anyone.

Magellan's performance hasn't been outstanding in recent years.

Re CFP's, brokerage firm reps, etc., performance will depend on the skill of the individual you are dealing with as well as, if they are affiliated with a broker or funds manufacturer (Ameriprise, for example), the products they have to sell.

How proactive do you want your advisor to be? Since you started by mentioning two firms that mostly offer mutual funds, it seems that you aren't interested in rebalancing your portfolio every week, but might want somewhat more handholding than an annual review.

Let's understand the terrain before we start using the compass without a map.

CFP is a designation awarded by the College for Financial Planning based on a year's study (3 years at the College itself) and passing regular exams during the course and an 8-10 hour exam at the end of the course of study to receive the designation. CFPs study the fundamentals of individual financial planning, investments, insurance, education funding, individual taxes, estate and tax planning, retirement and benefits, including regulations and professional ethics.

Brokerage firm reps will most often take a series 7 and 63 administered by NASD. Most aggressive broker types take those exams back to back after about a month to six weeks of study, mostly by taking a series of practice exams previously given. And they become registered reps at their brokerage house. Those exams concern securities types and transactions, regulatory issues, questions on ethical practices. their background in financial planning is often a one to two day seminar offered by their firm and built around specific products their firm wants to sell.

CFPs usually work on a fee only basis. They confer with you to develop your profile, your goals and objectives, your level of risk tolerance, and attitudes towards taxation, regulation, and asset accumulation as well as distribution and gifting. They develop a plan for you which they either can help you monitor as you implement it, or if they work with a money management firm, they can help you implement it and revisit it as needed.

CFPs are generally agnostic as to product source and should always be working for you.

Brokerage house reps don't work on a fee only basis, but are compensated based on a combination of client assets that they gather in to their brokerage house, and on commissions that they generate for your transactions. Often there is pressure on the rep to sell you the latest house product, usually the one that earns the rep the highest commission basis.

I've worked with both types, and I've hired both types. My advice, for what it's worth, is to have a CFP do your plan for you, and then work with someone, either a CFP or money manager, to implement the plan.

If you want someone to take over the doing and be proactive for you, then I suggest that you just lie back and let someone give you physical pleasure. I believe that the time is past when one can afford to let someone else take on the whole burden and just sit back and enjoy the process.

I don't trust registered reps (whether they call themselves financial advisers, financial counselors, or financial what-evers) to do that. And many CFPs prefer to build a good robust plan for you, for a fee, help you monitor its success, but try to avoid a conflict of interest in executing it for you.

There are good money management firms in NJ who can help you with a lot of this, but it's best to be involved, so that at least 4 times a year, you're having a sit-down and going through the numbers. You're probably better to meet more often in the first several years of the plan, just to make sure you're paying attention and someone really is moving you toward yearly objectives and long term goals.

If you have at least $20 Million, it's worthwhile going to a private bank and having it allocate a small office and team just to manage your money. At that level, you can and should expect very personal service and proactive attention.

All this, in my humble, but experienced, opinion.

I also work with an advisor at Ameriprise. My experience with Ameriprise has been extremely similar to what Brian described, above. My financial advisor been amazingly proactive, and has paid very close attention to my portfolio. Additionally, he has familiarized himself with my family's particular needs, and has provided excellent direction and planning for various lifecycle events. He even examines my 401(k) allocations and provides recommendations on how to balance that portfolio, too.

There has been no pressure whatsoever to purchase any Ameriprise products (although I do have excellent and quite reasonable automobile insurance through Ameriprise).

Over the past four or so years I've been working with Ameriprise, I've felt that a huge burden has been lifted. I know my advisor is watching my account carefully. He checks in regularly - way more often than once per quarter - and I feel confident in the service I'm getting. This, too, may be a function of the advisor with whom I'm working.

The best thing I can say about him is that I have recommended him to others, and they've been happy with him, too.

Thanks for the suggestions.

Any comments or recommendations to explore others financial planning organizations, such as:

- PNC Bank (recently added financial planning services?)
- AIG
- CGI
- Housley & Associates (found them in the phone book - Maplewood)

All forward thinking comments and recommendations to explore welcome.

Perhaps the best thing to do is to start interviewing a few firms to get a sense of their capabilities and whether there is chemistry (fairly important) between you and the firm/individual you choose. If you have a Schwab account, I think that the firm still offers to identify up to three financial management firms in your bailiwick as an interview start.

No matter how much you like the first or second firm, it's critical to interview at least three of them, obtain references of clients and former clients you can speak to, and be prepared to deal with someone who will at some point be able to answer at least these questions for you:

* At what age will I achieve financial independence?
* How much income may I reasonably expect from my invested assets without depleting them over long periods of time?
* How do I minimize my taxes without impacting my standard of living?
* Will I be able to afford private school for my children? Purchase a second home?
* Should I purchase or lease a car?
* Is my family protected if I die prematurely?
* Will I be able to maintain my current lifestyle if I become disabled?
* How should I manage my assets when I retire?
* How much will I be able to leave for future generations?
* How can I benefit my favorite charities in a tax favored fashion?
* How should I manage my IRA’s so they may benefit my children?
* When should you exercise stock options?
* Am I protected against catastrophes?
* Am I using debt in a most advantageous fashion?
* Are my investment properties performing as they should?
* Are there any "holes" in my employer provided benefits?

Whoever manages your assets should be providing measurably good advice in those areas above. If not, you're just receiving transaction assistance.

Regards,

Innisowen

Innisowen, the original poster asked (specifically) how proactive Ameriprise can be with your invested assets. Your initial answer seemed to say that they are not proactive, something that my own experience suggests is not the case.

I didn't say that I just let Ameriprise make all of the decisions. I said that Ameriprise helped develop a long-term plan that we adjusted and continue to adjust. They have brought us suggestions that we ghave taken, and they have also brought us ideas we have passed on.

With as much experience as you have, you no doubt realize that the vast majority of people have far less than $20 million to invest. If someone posting on MOL needs private wealth management, your advice is sound. For someone trying to do the right thing on a limited asset base and with limited time to spend on the topics, I think firms like Ameriprise can provide a reasonable service.

bol,

You're right and you're wrong. I used the $20M as an outside example of private wealth management.

Most of the really good financial/money managers in New Jersey deal with people whose assets are in the $1mm to $3mm range, which I believe should encompass many if not most M-SO residents (certainly and hopefully on the $1mm side) at least according to demographic surveys I've seen.

My view on Ameriprise and Fidelity is that their plans are often boilerplate. Notwithstanding that, AM and Fid have many satisfied clients, I'll be the first to admit.

However, I prefer to use managers and planners from smaller organizations. I get the feeling with them that I am NOT paying for their services + an enormous infrastructure that may or may not add value to me and my assets.

Just MHO.