FinAdvisor

FYI, they only just started the annual fee thing. That fee used to be a "per plan" fee. Basically, you would only have to pay another fee if you had a life altering event that required your advisor to do another financial plan. That fee was usually lower (if it happened at all) than the first time, because the advisor had all your information and really only had to make minor changes to produce an entirely different plan.

If you had paid a one time fee, you would still have access to your advisor forever. This doesn't mean that now that they charge annually, you're getting ripped off, it's just food for thought.

What concerns me is that I think you are being lied to. If you think you are getting away from front-end and back-end loads, and this wrap fee is what does it, you are mistaken.

2 things.

1. The mutual fund company charges the load, not amex. Therefore amex has no way of waiving a load aside from actually paying it themselves. A front-end load on 140,000 is $4,900. That's seven years of your fees that they must pay just for one initial investment. Does that sound likely?

2. Another thing is this. Mutual funds are meant to be bought and held. The whole purpose of getting a mutual fund is to achieve diversification in a managed portfolio that you don't have to worry about. You should not have to change your mutual funds around more than twice a decade, let alone several times a year. Rebalancing needs to be done at most once a year, and at amex we were shown that 3 years is a more ideal number (market cycles and swings typically last 3 years, so you ride the wave, blah, blah, blah). So you really aren't going to be trading enough to justify a wrap fee.


It is very possible that you are in a wrap account, and your advisor is buying C-shares or other no-load funds that will not have a front-end or back-end sales charge anyway. You better believe that you are still paying the management fees to those fund companies, though.

Actually, could you be so kind as to list exactly (symbols and all) what is in your amex account? I'm dying to know.

Oh, and if your advisor has the power to manage your account without talking to you about it, just be advised that in no way is any financial advisor (with amex or otherwise) capable of managing a wrap account themselves. We are not financial analysts. We spend our days writing plans, figuring out asset allocations, doing VUL illustrations, meeting with clients, prospecting for new ones (with amex, this part is about 3 hours a day), and a number of other activities, none of which entail studying the performance of the holdings in one mutual fund and analyzing market trends and deciding which funds are good for the week, and which are not.

So the question is, do you think it is worth .5% of your porfolio annually to have this advisor? That's up to you. If would do nothing on your own, then this advisor is definitely worth it. Honestly though, there are a lot of institutions out there that will give you financial advice for free, and hold your accounts for free, and be available on the phone for free. And they are probably more qualified than amex advisors.

Wanna hear something funny? In the 9 months that I worked for amex I met about a hundred other advisors. All but four of them started their financial services career with amex. Only 4 of them had worked for another institution, and decided to come to amex. Only 2 were financial advisors before they came to amex. Kind of scary if you think about it.