Monday, January 24, 2011

My 20 years with Fidelity

We have been investing with Fidelity Investments for over 20 years now.  For the most part, it has been a positive experience, but our relationship may be taking a new, positive turn in the near future.


After writing My 20 Years with State Farm and My 20 Years with Northwestern, I suppose it is only fair to examine our financial relationship with Fidelity Investments.

We had a Fidelity account set up by Mark's Father, with a small amount in it, in the Equity Income Mutual Fund.  Over the years, we have added to it, rolling over various 401(k) plans and making additional contributions.  It has done well - more than doubling in value (120%) even after the recent downturn in the economy.

We had a Fidelity Trading Account, but abandoned that because the cost of trades was too high.  We have since opened trading accounts with E*Trade and Ameritrade.   Fidelity now offers trading accounts with much lower fees - fees that in some cases are lower than E*Trade and Ameritrade. 

I had a Fidelity Account as well - invested in the lesser performing Equity Income 2 (which still did well).  I thought about starting a self-directed IRA with E*Trade, as we had a lot of money in Fidelity, and I was nervous that these mutual funds were a pig-in-a-poke.

So I asked Fidelity to roll over about half my account to an E*Trade self-directed IRA.  For some reason, they rolled over the whole amount.  When I called them about this, the person answering the phone was like "Oh, my bad.  Have them send the money back or something!"

I took this as a sign and didn't send the money back.  Since rolling it over to E*Trade, I have increased the value of the account by nearly 50%, so I've OK as a "stock picker" but it still makes me nervous.

So my feelings about Fidelity were a mixed bag.

We got one of these form letters in the mail from Fidelity, offering to review our investment portfolio, which by now is a fairly substantial amount, for middle-class Americans.  I took them up on this and met with a representative in the Jacksonville Office.

They claim not to be on commission, and generally their funds are low, in terms of loads and fees.  The agent pointed out that the American funds that my Northwestern Agent sold me (emphasis on the word "sold") have very high fees.  So we may roll those over to Fidelity.

By the way, my Northwestern Agent is a real piece of work.  I thought this guy was watching my back, but it appears he was just watching his bottom line.  I was on Facebook the other day, and Facebook suggested I "friend" him (can you "enemy" someone on Facebook?  I think that would be a great app).

Anyway, I clicked on his profile and under "favorite television shows" he had listed "Fox News".

Fox News.  What a freaking idiot.  I mean, all television news is idiotic to begin with, but Fox?  Only morons would watch that drivel.  I mean, really.  Sheesh!

Anyway, this guy at Northwestern put me into American funds, which have a staggering 5.5% load (or higher), which over time, can really put a dent in your earnings.

And funny thing, too, when I started in those funds, I specifically remember asking him about load, and I don't recall him saying anything about 5.5% in fees (the selling agent, it turns out, gets about half of those fees!).

Overall, the agent at Fidelity gave me some good advice - about the 4% rule, annuities, how much I will need to retire - all those questions I have been trying to answer!

Do I trust him?  Well, trust has to be earned, and after my disastrous experiences with the "financial advisers" at Northwestern and State Farm, I am a little gun-shy, to say the least.

And of course, his advice is to move my money to Fidelity - but not all of it, like the greedy little piggies at State Farm wanted me to do.

But I am cautiously optimistic that maybe I have found someone who is pretty much a straight-shooter.

We'll see.  Stay Tuned.


UPDATE:  February 20, 2011

We rolled over our American Funds SEP plan to Fidelity.  Thanks to a recent spike in the market, both funds nearly instantly increased in value by 5%, which is a good sign.

Fidelity's website, by the way, is fairly user-friendly and clear.  As with all my accounts, I try to check it on a regular basis.

I have to say, the agent at Fidelity was friendly, informative, and helpful.  And he is not on commission, so I didn't have to fork over 5% of my money to him for the privilege of doing business with Fidelity.

I only wished the agents at Northwestern and State Farm were as direct - and didn't have a hand in my wallet.

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