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Subject:  Re: Retirement brokerage account Date:  9/24/2001  3:19 PM
Author:  Crosenfield Number:  31969 of 88065

Your broker can call you up and suggest any investment consistent with the information you gave when you set up your account, or maybe subsequently changed, concerning whether your objective be preservation of capital, income, growth, or speculation.
To give a broker "discretion" over your account, in which he makes whatever trades he wishes without consulting you, is a blank check. Usually it results in a lot of buying and selling that can generate huge commissions and dissapate your capital in a short period. This has led to lots of lawsuits, so I'd expect the brokers are getting a little wiser.
Many of the larger brokerage firms have various flavors of "managed accounts" with a supposedly all-inclusive wrap fee based on the amount of assets under management. The greater your account, the higher the annual fee to the advisor. This may, over time, work out well. I've so far declined all such offers, feeling the fee is too high, and the ability to deduct the wrap fee from taxes rather iffy--in contrast with usual fee for service commissions, where you clearly subtract the commission from proceeds and add it to costs.
I'd be very leery about such an arrangement.
Best wishes, Chris
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