How do you deal with guilt when moving on?

[myrrh]

Just after my DS1 was born, my grandfather gave me a very generous cash gift with the intent that it would be for a 529 (college expenses.) He also gave me a number for his financial advisor and told me that this financial firm had done very well for him. I called this person and he steered me into a plan under their firm. At the time we were trying to simplify our lives so DH rolled over several old 401k plans with this advisor as well.

So I have to say thanks to Gardening Grandma and a few others who have repeatedly mentioned the Bogleheads forum. I've lurked there now for several months and have learned a LOT. And one of the things that I've learned is that through lack of knowledge/willingness to trust is that I got myself (529 plans) and my DH (IRAs and rollover IRAs) involved with a financial advisor that is terrible (as in, super high costs in exchange for a little bit of handholding.) So I need to explain to DH that this plan is one of the most costly out there and get out, probably moving to Vanguard or possibly our state 529 plan (still haven't decided yet.) When I figured this out I wanted to cry because my grandpa was doing something wonderful and I didn't realize that it came with something that was so awful.

However the lady under this firm that we've been working with is actually pretty nice (I wonder if she realizes how bad the plans we have are, and how she justifies it to herself if she does?) and I am feeling guilty and don't want to have to explain that we don't need their services anymore.

Help me deal with the guilt. When we start rollovers, do we have to talk to anyone? I just want to get out and not deal with the unhappy phone calls.

[Deleted]

She knows.  Don't feel guilty.

[Shooby]

She isn't your friend. It is BUSINESS. You move on to other business. Don't take these kinds of things personally.

[Tennesseer]

myrrh - it would be very unprofessional for them to give you a hard time.  Reputation is everything.

This is a business transaction and nothing else.

[greeniis10]

Yes, to the above posts.  This IS business and therefore, no emotion should be involved.  Resolve yourself to that prior to calling. 

Also, keep your statements short, to the point, and don't keep talking.  Just state that you are moving your accounts.  Sometimes they will ask "Why?" under the guise of, "tell us how we can help you and our other clients better in the future", but you are NOT obligated!  Do what is right for YOU.

[NancysSummerSip]

I did a rollover years ago, from an employer 401(K) to Vanguard. I only had to speak with Vanguard; they handled everything, as I recall.

It's business, not personal. The money is about your child and your child's education, not the person at the firm handling it. Be firm and nice, but keep it businesslike. A financial firm is not your bestie; they are in the business to make money for your and for themselves, and do so efficiently and with the lowest possible costs to you, the customer. If you are not happy with them, tell them so. You don't need to offer the lady a shoulder to cry on; your job here is to protect your money.

It might help to have a basic script written down before you call. A list of what you want to say, reasons you are leaving, etc. Not necessarily exact word for word, but something on paper so you don't get flustered.

[Abby Normal]

Most advisors are basically sales people.  They are peddling their product and you have to keep that in mind when dealing with them. Just move your accounts and stand firm when they try and convince you they have something better.

I'm very lucky that my company hires third party advisors for our 401k.  The company pays them a flat fee and they'll help any of the employees make a plan, but they don't have skin in the game.  It's really nice to be able to call them and say I'm thinking about doing this, and get an honest answer. 

[Deleted]

The firms accepting your rollover will do most of the legwork and they'll be very helpful! Since you have a personal relationship with her (you're not just going from one on-line broker to another), you might want to compose an e-mail or snail mail along the lines of "I appreciate your service and your advice all these years, but have gotten to the point now that I plan to take a more active role in researching and managing our investments, and want to take advantage of products with lower expense ratios. You will be receiving a request from Firm X to transfer the investments in our account to their firm. Thank you so much for all the assistance you've provided."

Also- take a look at the investments you're transferring. Most can go straight over to the new firm but if you have some proprietary funds from the old firm, they may have to be sold and the cash will be transferred instead. The brokerage accepting the funds can tell you if this applies to any of your investments.

[Shooby]

Well, we were solicited to go on one of the "vacation club" seminars where you basically got a free vacation. They solicited ME. We went and heard the 2 hr spiel and said Thanks but no thanks. Why should we feel guilty saying NO to a salesperson?

[NomoreDramaQ1015]

We didn't have to talk to anyone besides the company we were moving the account to when we rolled over an old 401(k) of DH's.   They handeled the entire transaction.

If she calls you wanting to know why you switched you don't have to provide her with anything. She shouldn't be calling you unhappy at all because this is a business transaction. People switch companies all the time for myriads of reasons.   You aren't obligated to justify your decisions.

If she gives you grief instead of feeling bad that should cement in your mind that you made the right decision because giving you attitude would be extremely unprofessional.

I must be missing some sort of gene because I've never had any issues taking my business elsewhere if I am unhappy and I don't feel a shred of guilt.  Meanwhile DH agonizes and will stick with the crappiest people because he "feels bad" switching.

[achelois]

Myrhh:  she apparently doesn't feel much guilt about taking you for lots of money. 

Do you feel guilty when grocery shopping for buying lower-priced items?



i just rolled over my 403b to Vanguard. I called Vanguard and they set up the whole thing via conference call to 403b planholder. Very simple. Probably transfer procedures will be different depending on where you have your money, but Vanguard makes it as easy as possible. 

[myrrh]

LOL Drama. I wish that gene had skipped me too. It's kind of why I'm afraid to try a cleaning service. Because if I don't like it, then I'll feel guilty about stopping it. Why I do this to myself I wish I knew. I realize it should be a just business transaction. Why do I take everything so personally? It makes a lot of things a lot harder.

Nancy and Athena, thanks for the tips. I'll do just that. And everyone who replied. You all are the best.

[happyhoix]

Myrhh I came to the same conclusion a couple years ago about the company that was previously handling a 401K I had rolled over from a previous job. I had the account with them for about five years and it never performed well, gaining a little and then losing it again. I would go in twice a year and the guy spent the whole time trying to convince me to hire him to manage my entire financial life, not just this one part of it. Then the last couple of times he started pushing me to put my 401K account into an annuity. I reviewed what he was proposing and realized it would be a seriously bad decision for me to do that. He was pushy about it and refused to discuss any other options other than the annuity, so I shopped for a different option. The new company handled all the paperwork for me, they contacted the old company and got it transferred over. I never had to speak to my old advisor - but in my case, it wouldn't have bothered me if I did, because it was very clear he did not have my best interests in mind.

Besides, he acted like he was a financial wizard and everything was just too complicated for me to worry my pretty head about - idiot.

[sesfw]

I am feeling guilty and don't want to have to explain that we don't need their services anymore.

Substitute the word regret for the word guilt and you will be fine.

This is a business deal.  It's like going to a different grocery store.  You just go.  You don't owe an explanation, just make a decision.  Find where you want to go and let them handle the paperwork.  People change their financial accounts all the time and no one really thinks anything about it.

[myrrh]

Wow you guys make great councilors. My guilt is assuaged. LOL

Any tips on how to explain this to DH? I ordered the Bogleheads Guide to Investing on Amazon yesterday. I think it will help, but I appreciate any thoughts you could give too.

[resolution]

It would be much better for you to work through the receiving company than to call up the current one. Some of these tax advantaged accounts could get messy if you ever touch the money yourself. Best to just call Vanguard or Fidelity or whoever and let them handle the transfer. Then you don't end up in the trap of the sending company withholding taxes, mailing you a check, and you having to make up the taxes for the new deposit.

We transferred DH's old employer SEP IRA from Morgan Stanley to Vanguard a few weeks ago. He just called up Vanguard, printed up a form to sign, and then mailed it to them. Vanguard took care of all the contact with Morgan Stanley, although they managed to hit us with a few more fees on the way out.

[NancysSummerSip]

Aug 15, 2014 12:13:09 GMT -5 myrrh said:

Wow you guys make great councilors. My guilt is assuaged. LOL

Any tips on how to explain this to DH? I ordered the Bogleheads Guide to Investing on Amazon yesterday. I think it will help, but I appreciate any thoughts you could give too.

If I understand correctly, your grandfather gave you the money. Is the account now in your name only for your child, or in you and your husband's names? Just an academic question, more than anything else.

You did not mention how financially savvy your husband is. I get the impression you handle most of the money matters, myrrh. Have the facts ready: printouts or statements showing how much you have (or have not) progressed with this fund, and how much you've given up in fees. Then be ready to explain why another account is better from a sound financial viewpoint (lower fees, better earnings). Show DH you've done the research; and that this is a financial, not emotional decision. Keep it as businesslike as possible. No emotional involvement here. This money is to ensure you're not going broke to give your child an education. Unless, of course, DH wants to work until he's eighty.

[myrrh]

Oh I'm not worried about the 529 plans. That's the easy part since they're in my name only. I'm more worried about DH's IRAs. Although I guess I could explain all these fees in the current 529 plan and the advantages to the new 529 plan and maybe that will spur him to learn about the IRA fees.

[myrrh]

And we are one of those couples who don't have a "real marriage" because we are separate potters. He is fairly financially savvy but he hasn't been lurking on bogleheads like I have.

[Deleted]

Aug 15, 2014 11:32:35 GMT -5 happyhoix said:

Besides, he acted like he was a financial wizard and everything was just too complicated for me to worry my pretty head about - idiot.

Oooh, BAD sign. If I can't understand it (and the person selling it can't help me to understand it), I'm not buying any.  That's my No. 2 rule of investing.  No. 1 is "Low risk/low reward, high risk/high reward.  Anyone who tries to tell you their product doesn't follow those rules is an idiot or a con artist." 

And myrrh, while I agree with the others that you owe her nothing, I think it would be helpful to her that she knows why you left- that it had nothing to do with the relationship and everything to do with her firm's business model.

[Bonny]

Aug 15, 2014 12:29:17 GMT -5 myrrh said:

Oh I'm not worried about the 529 plans. That's the easy part since they're in my name only. I'm more worried about DH's IRAs. Although I guess I could explain all these fees in the current 529 plan and the advantages to the new 529 plan and maybe that will spur him to learn about the IRA fees.

And don't feel guilt about just realizing that you should of researched the "advisor" better. This was a gift from your grandfather and the situation worked for him. Your situation is different and it may change again down the road.

DH and I have made plenty of these mistakes learning experiences.  The big picture is that you guys have been saving, planning and educating yourselves. Not everyone is as independent as you and might need more hand holding. Congratulations on becoming a better investor!

[regina24601]

Depending on the setup of the financial advisor, he may be able to choose the investment house that he affiliates with. For that reason, I would give the lady you have the relationship with the courtesy of telling her why you are leaving. It may not be that they're greedy charlatans. Maybe they just need incentive to find a better financial services arrangement.

And if enough of their clients are vocal about it (and if they actually pull their money out), it may be the impetus they need to find a better arrangement.

[The Walk of the Penguin Mich]

My suggestion would be to do some research and present it to your DH as to how high the expenses are for the funds that this financial manager is putting you in.  

Then do the research for something comparable at either Vanguard or Fidelity and present him with the expenses for those funds.

As others have said, you can easily set up a roll over from one company to another.  When I did it with my pension fund, I just opened up an annuity with TIAA/Cref to park the money until I could go through reams of data to decide what I wanted to do with it.  Then once I did some research, I moved the funds to some place with better returns.  I did leave a small amount in the annuity, as at the time the interest was decent (around 5%) at the time.  

[myrrh]

I know Bonny. It's just hard to accept that it took me five years to realize this.

[myrrh]

Well we are actually supposed to meet with the advisor this month, as an annual progress report type thing. Hopefully she'll have a binder I can take home and I can figure out what funds DH is in, and I can do the research then. Because I think it would be easier working with actual numbers than a general "Name of Financial Advisor funds are bad, mmmmkay?"  

[dannylion]

This is not a relationship. It is, as others have pointed out, simply a business transaction. The advisor may be nice to you, but it is not because she considers you a friend.  She is nice to you because it is in her (financial) interest to be nice to you.  There is no reason for you to feel guilty about choosing to take your business elsewhere if this is not working out for you.  It's your money; you can do what you want with it.

[Bonny]

Aug 15, 2014 13:08:15 GMT -5 myrrh said:

Well we are actually supposed to meet with the advisor this month, as an annual progress report type thing. Hopefully she'll have a binder I can take home and I can figure out what funds DH is in, and I can do the research then. Because I think it would be easier working with actual numbers than a general "Name of Financial Advisor funds are bad, mmmmkay?"  

You probably already have this information either in a hard copy or on-line.

Do you belong to Morningstar? They try hard to upsell you on their "premium" membership but you can see their ratings of different funds, expense ratios et cetera with the freebie membership. You'll get e-mails about 3x per week. I generally read at least one of those articles per week. They recently did a wonderful analysis on retirement/long term care options which was very timely for us.

[myrrh]

I talked to DH over the weekend about moving the 529's and it was pretty much a non-issue. "Do what you want, I don't care". He also asked what happens if we don't use all the money (which is unlikely IMO but of course you never know) and I said we can transfer to a family member or just pay the taxes and penalty and move on with our lives. That was fine with him.

Today I mailed the paperwork to rollover the 529s. We'll see how long it takes. I talked to the advisor lady on the phone about the reason for moving (passive management and lower costs) and she asked me if she could send me something in the mail about how their 529 plan is ranked highly. I said ok, it's not like one more piece of junk mail to throw away is a big deal.

I also found an old copy of DH's rollover IRA info so I'm starting research on that. He's pretty busy working full time, started online classes for a master's degree, and jury duty so I'm not going to push it hard right now. It's going to take awhile to figure out what the heck he's invested in anyway (needlessly complex as well as very expensive.)
 
One question I had was in looking at five year returns, Vanguard's numbers are much lower than Morningstars. Does Morningstar assume all dividends are reinvested and Vanguard not? How can I come up with a five year return and a five year return including expenses?

[Knee Deep in Water Chloe]

I talked to DH over the weekend about moving the 529's and it was pretty much a non-issue. "Do what you want, I don't care"


This isthe question I had. If you're managing the money, regardless of whether or not you're common potters or separate accounts, does he actually care what you do with it? My DH doesn't care where the money is. He just wants to know how much he gets to spend. 

So, it sounds like you've gotten everything worked out. Yay!

[Bonny]

Aug 27, 2014 15:23:25 GMT -5 myrrh said:

 
One question I had was in looking at five year returns, Vanguard's numbers are much lower than Morningstars. Does Morningstar assume all dividends are reinvested and Vanguard not? How can I come up with a five year return and a five year return including expenses?

Make sure you are doing an apples to apples comparison.

1. Are you looking at Morningstar's rating for the S&P 500 or Vanguard's S&P 500 index fund? In either case the returns should indicated whether dividends were invested or not and whether fund expenses were taken into account. Also Vanguard has a couple of different classes of funds; I think Voyager and Admiralty shares. One is designed for larger accounts and has a lower expense ratio.

If you're still confused you can post links to both and we can help you figure it out.