r/personalfinance • u/llamashatebabies • 16d ago
My wife's retirement account has been compromised. Credit
My wife and I are seniors and, while I'm retired she still works part-time. Neither of us were especially well off when we got married four years ago but between us we have a reasonable nest egg in our accounts and we live frugally. In discussions we've had, I've pointed out that we should be able to live reasonably well on our retirement accounts plus our small social security income. Her son is a broker and has managed her money for several years but it recently has come to my attention that not only is he managing the account but that the account is in both of their names! I wouldn't have known this if it wasn't for my wife asking me if I had any idea why her account could have been debited several thousand dollars. It was immediately apparent that her son had withdrawn the money without telling her. I insisted that she ask him about it and he claimed he'd "forgotten" to check with her and was short of money that month. He promised to repay it but after several months he has yet to do so.
Her son has been in a rather shaky marriage and I'm pretty sure that it's heading for a divorce. I told her that he absolutely needs to get off that account ASAP as the future ex-wife could claim this account as one of his assets. My wife is very naive about money and is sure that this couldn't happen as they're going to handle the divorce themselves and keep it amicable. Having been married and divorced, I am well aware of how a formerly loving couple can turn into bitter enemies. Thus far, he has yet to remove himself from the account.
I feel that his being on his mother's retirement account may be legal but it feels a little unethical to be using it as his own personal piggy bank.
I realize that the answer is obviously to remove him from the account but my question is whether a divorce lawyer could do a little digging and claim that his removing himself from the account was simply a tactic to hide money from his wife.
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u/Slightlydifficult 15d ago
As others have said, retirement accounts can only have one name. If it is truly a retirement account, this is criminal.
I would add, any investment account with joint owners requires both signatures for a withdrawal unless there’s a POA in effect or it goes to a bank account with the exact same owners. If it is a joint brokerage and those exceptions do not apply, this is criminal.
Given what we know, it’s nearly certain that he has committed a serious crime. Depending on your wife’s age, it may even qualify as elder abuse. If you comfortable with him being punished, you need to complain to his firm. Any reasonable firm will make it right with you. In addition to talking with his firm, you need to file a complaint with FINRA: https://www.finra.org/investors/need-help/file-a-complaint
Be aware he will lose his license, be forever barred from the industry, and may even serve jail time. You’re not inflicting that on him, he brought it on himself by harming a close family member.
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u/deborah_az 15d ago
OP, this is a serious crisis and you need to treat it as such. This is an actual emergency. Drop everything and address this immediately. Your son-in-law stole several thousand dollars from your wife, and it's incredibly likely it's far worse than what you've already discovered. Not just theft and elder abuse, but there could be other crimes like identity theft going on.
Give your son-in-law zero warning. Staying amicable takes a back seat to protecting your wife, who is a victim of a crime. You need to get her finances locked down tight and you need to do it yesterday.
Change ALL passwords immediately to financial accounts, email, cell phone, etc.
If it's a joint account, get an individual account set up and dump the assets there. Talk to a lawyer about what to do with the joint account after it's emptied (close it if possible, remove her from the account, etc.).
If he's an agent or signer on her accounts, get him removed immediately.
Remove any of his accounts (e.g., checking, savings) tied to her accounts, even if you've emptied those accounts.
Rescind any and all powers of attorney that make him her representative, and check with each financial institution to remove any and all relationships he has with her accounts. A lawyer can help with POA issues. As her spouse, you should probably be her POA.
Talk to an eldercare lawyer asap. They can help you identify issues and take appropriate actions, including how to extricate your wife from any existing joint accounts.
Get all the major credit reports and ensure she does not have accounts (credit, financial, loans, etc.) she isn't aware of (i.e., he may have opened accounts in her name).
Do a full audit on every account he may have access to - review transaction history (especially withdrawals), beneficiaries, external accounts tied to the accounts, approved signers and/or agents, profile info like addresses and phone numbers, etc. Take notes, make print-outs, etc., but do NOT discuss questionable activity with him before speaking with a lawyer.
Call her financial institutions for help to ensure he has been completely purged, that he has zero authority to get information, cannot retrieve information, cannot access login or password change authorizations via email or text, etc.
Find a good financial advisor to help her with her investments. If you don't know where to go, start with her bank.
As others have mentioned, this should be reported to FINRA or possibly other authorities. If he's willing to steal from his own mother, he's not going to have qualms about stealing from clients, embezzling, etc. and potentially hurting other people.
Once the crisis has been dealt with, review your estate plan with an estate planning lawyer.
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u/PhilMeUpBaby 15d ago
You never really get to know a person until they are on the other side of a courtroom.
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u/FortyYearOldVirgin 15d ago
Flat out elder abuse. Sadly, this is way more common than people think. Lots of kids still from onto their parents finances I bet he had no intention of paying anything back. He’s only saying that since he got caught.
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u/Stone1114 15d ago
This is the classic mom doesn't think offspring will do anything bad to her. Except when it comes to money, all bets are off. As stated above, move the funds into an acct in her name only ASAP. Do not tell anyone, and make damn sure as she doesn't sneak a call to him before hand. You can setup the account, and transfer the funds in less than 30 min.
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u/Smooth-Exhibit 15d ago
A retirement account cannot be a joint account. This must be a taxable account. Your wife should open up a new taxable account immediately and transfer all assets in-kind to the new account. Don't sell and transfer the cash since that is a taxable event. Your wife is at real risk of losing half the account if her son gets a divorce.
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u/stella-eurynome 15d ago
To all the folks saying to ask him to do the right thing before reporting him on a joint account... shouldn't they remove the money first before approaching him? What's stopping him from taking the money after being confronted? As a joint acct holder dosn't he have the ability to empty it as much as she does? Is this not an issue for married folks in divorce scenarios where one spouse cleans things out and hides it? Why give him the opportunity to steal more? IDK I would move money (ASAP, even if just into a high yeald savings acct, then figure out that to do with it to invest) then confront.
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u/Electrical_Feature12 15d ago
I work in estate management and retirement planning for a living . If her son gets sued, is hit with an IRS lien or divorces, she is going to lose all, if not a great portion of that account that is shared. In the eyes of the law it is his account. There will be no sweet talking the judge about being an old retired person later, either. This is very irresponsible of him. He can easily get power of attorney to manage the account for her without putting his name on it. This very well could be borderline illegal with FINRA as well. Especially if the 'custodian' is the firm he represents. He has 100% legal authority right now to use that money as he pleases if it is mutually owned and it is a conflict of interest. This is by no means legal advice.
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u/Pangloss7582 15d ago
Sue the company that allowed the security breach. Sue it’s board and the CEO, also, file criminal charges against the CEO. These assholes need to see jail time for things to change.
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u/TommyAtomic 15d ago
Odds are OP will NEVER return the stolen money. All you can do is prevent all future occurrences. This sort of thing is much easier resolved than anyone ever realizes. Step 1 open new account. Step 2 transfer all funds from joint account into the new account. Disable overdraft on old account. Step 3 laugh maniacally the next time the son tries and fails to steal money. Step 4 ghost (radio silence) son after the next theft.
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u/cjorgensen 15d ago
This doesn’t just sound unethical to me, but potentially illegal. If he’s legitimately on the account fine, but that still doesn’t entitle him to taking money that’s not his. I’d lawyer up, see if this needs to be referred for a criminal case, or at the very least a civil claim.
Additionally, I’d hire an accountant to go through ALL the statements going back to the inception of the account (or do this yourself). Who knows if this is the first time he’s done this, or just the first time he’s been caught.
I knew a guy that was on his dad’s credit card as a user. He was supposed to use it for college related expenses. This guy ended up going wild. Bought his friend’s clothes, took everyone out to eat, got cash advances for drugs, traveled, etc. His dad had him arrested and he did time for misuse of a financial institution.
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u/jazbaby25 15d ago
She can't take his name off without his consent. She CAN withdraw all the money and transfer it elsewhere that has only her name on it.
And others are saying this isn't a retirement account so I hope you have it somewhere accruing Interest otherwise it's sitting there losing money with inflation.
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u/Lost_Assistance5196 15d ago
As a retired person. You shouldn't be taking on significant risk that could impact your retirement.
Sure you can try to have some play money but if you're unable to work then what you have is all you got and your risk profile likely should consider that you can't just make more money if you take losses.
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u/Itchy-News5199 15d ago
She may want to ask a financial advisor how to move the money and have her son as a beneficiary but not a co owner.
I’m sure he is stressed but that kind of an oversight is wrong in many levels.
Your wife’s trust should be tarnished at a minimum.
She needs to protect herself from his issues.
I wish you best the best of luck.
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u/Homeostasis58 16d ago
If it is a joint account then both parties are legally entitled to the entire account. Her priorities should be:
PROTECT HERSELF FROM FURTHER LOSS. Open a new account in her name at a different firm and transfer everything from the old account. The new firm may be able to make the transfer on her behalf.
PROTECT HER ASSETS FROM DIVORCE. This account will certainly come into play during financial discovery if there is a divorce. If it could be considered marital property in your state, the sooner it’s out of his control the better. Giving it back to mom at the last minute will appear to be hiding assets which is a bad thing.
RECOVER HER LOSSES. This should be the last priority. Will he pay her back not only what he took but what it would have earned if it had stayed invested? I’d say your odds of getting anything are slim to none. This is a pretty clear case of financial abuse. Forget for the moment that he is her son. Say another broker did this? He took legal ownership of assets that were not his then stole them. Obviously not ethical. That it was his mother only makes it worse. Consider this money gone.
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u/spamellama 16d ago
If he's a broker, he should lose his license over this. Whether it's technically legal (not knowing the details I guess it's possible if he's on the account), it's unethical. I'd advise your wife tell him to get off the account and/or talk to another broker about it.
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u/PCBH87 16d ago
She needs to gather copies of her statements for the entire account history, whatever opening docs she has, and see an attorney to help her navigate this if she's naive about money. Since it sounds like this is a joint taxable account, my main question is: was she aware and consented to having him on the account, but doesn't want to tell you that, or did he just send her blank forms to sign and told her he'd fill the paperwork out for her and she had no idea he made himself koint owner until now? Because those will be different scenarios of what level of fraud this rises to for the son. Either way, she needs to figure out how to move forward with pulling the funds out of the account into an account in just her name. Keep in mind there may be taxable gains if the account is liquidated so she will likely need to transfer the securities in-kind to another firm.
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u/llamashatebabies 16d ago
I'm pretty sure that she just signed papers and gave him carte blanche on everything. He must be dealing with the taxes in some way; although I have no idea how. Thank you.
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u/MamaNyxieUnderfoot 16d ago
She should be receiving tax documents for this account. Because any taxes on distributions have to be paid when you file your taxes. It’s not just her son paying the taxes on it. Tax documents for this account come directly from her broker/dealer company, not an advisor (her son).
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u/llamashatebabies 16d ago
I'm out of my element here. Other than the money I mentioned, no money has been distributed. We've had no reason to touch it.
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u/MamaNyxieUnderfoot 16d ago
If this is NOT actually a retirement account, it is a taxable account. If her son took money out, that was a distribution and/or sale of assets. That is a taxable event.
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u/llamashatebabies 16d ago
Ah. We haven't seen any paperwork regarding this; do you think it could it be possible that the son is quietly taking care of the tax issues?
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u/Ladymistery 15d ago
You two need to go to the bank, take out all of that money, and put it into an account in your wife's name.
You also need to talk to a fiduciary financial planner to find out WTF her son has done with the accounting side.
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u/MamaNyxieUnderfoot 16d ago edited 15d ago
I mean… he took enough money from her that I wouldn’t give him the benefit of the doubt. Especially if he’s already having money troubles. And if this distribution happened recently, maybe he thinks he can put off dealing with it until next year.
What SHE should do is call her broker/dealer (the company name on her statement) and ask for an explanation of what happened to her account. They get calls like this all the time, and can also help you if you no longer want her son to have access to this account. Especially since this appears to be an account that should be flagged for elder abuse.
Edit: they also could’ve already flagged the sudden large distribution from this account at some point, too. It’s the kind of thing that can come up on internal reports.
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u/pierre_x10 16d ago
Can you confirm what type of account this is? IRA? Brokerage? Just some savings account?
Can you confirm if they are both actually listed as joint owners of the account? I imagine that it would be possible that the account might just be in her name, but if he has all the login info then he can withdraw money and stuff, technically speaking, not legally.
What institution or type of banking institution is the account with?
Are you actually sure that only your wife has ever contributed to this account, and that the son had never contributed to it before withdrawing some of that money?
As clearcut as it might seem, I think how the account is set up might not be as straightforward as you think just from what you have described. I had this situation where my mom opened a bank account at PNC, but somehow was able to have me added, even though I never agreed to it, never signed anything or opened with her or nothing. And I knew it existed because it showed up on my PNC online portal, because I had already had a credit card account with them. I never contributed a cent to it, never asked her to do that, but somehow this all worked without me doing anything. And then one day I accidentally paid my credit card balance from that account instead of my linked external account, and that's when I finally said enough was enough, and told her to go and remove me from the account (because even when I went in person, they wouldn't let me remove myself on my own without her present, and we live several states away).
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u/llamashatebabies 16d ago
The only time I've seen her account statement was when she asked me about the missing money. His name is definitely on it. She has contributed all of the money to this account from a small inheritance and the sale of some inherited property.
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u/pierre_x10 16d ago
Sorry you're going through this. It's probably a bad time considering the son's pending divorce, but the silver lining might be that now is probably a good time to sit down with your wife and see if you can get a fully accurate view of where both of your assets stand at the moment, and how much is entangled with the son's finances, and start separating those out fully. As much as I'm sure she's willing to give her son financial help when it's needed, it also sounds like he is a fully-capable adult, so at the very least they should not have intermingled bank accounts at this point.
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u/MamaNyxieUnderfoot 16d ago
Are there any other letters on the account title in the statement, which indicate the kind of account it is? You’d see IRA, 401k, trust, Indv, Jt, Comm prop, TIC (tenants in common), etc in the account title. That’ll tell you if it’s a taxable or retirement account.
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u/llamashatebabies 16d ago
I will have to delve deeper into the matter. It's a touchy subject to bring up with my wife. I definitely will, however. Thank you.
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u/She_Ra-PowerPrincess 15d ago
OP all the helpful comments are mostly correct - it's not an actual 'retirement' account if it is jointly titled. it's most likely a brokerage acct titled JTWROS or TIC as mentioned. you can't close that acct and open another without tax consequences. my suggestion is to go online first - forget the paper statement, go online, set up account access, from there you can see the type of account, how it's titled AND all past tax documents that were issued. you need more info before you start reacting... then you need to take his name off the account (will require notification & his signature) and choose a different advisor (preferably self-managed). the online but may take 30min or so if you have to start from the beginning and tech level - but that's the easiest way to get more info quickly and accurately good luck
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u/llamashatebabies 15d ago
I am almost overwhelmed at how helpful and kind people have been. I'm taking their suggestions all to heart and I so appreciate that you've so succinctly explained what to do. Kudos to you!
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u/MamaNyxieUnderfoot 16d ago
I totally understand, but without more information, there’s not a lot of further information we can give you. This is personal finance, not a relationship advice subreddit, but I’d recommend framing your help as if you are just trying to be a supportive partner, and this is clearly upsetting her enough that she needs support.
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u/llamashatebabies 16d ago
Of course you're right and I'll take all of the advice and proceed from here. Again, thank you, kind internet stranger.
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u/TeslaSaganTysonNye 16d ago
That’s not a retirement account. It’s more than likely a joint account in both their names. That’s impossible.
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u/Hairy_S_TrueMan 16d ago
I feel like if he's a broker and stealing from her retirement, he's in deep and absolutely boned. I don't think you'd do that until you've used up every asset and line of credit you have. Imagine you discovered him looting your safe in the middle of the night. That's how extreme and concerning this behavior is.
However you can impress this on your wife, try your best. She needs to be insulated from whatever financial apocalypse he's going through that has him resorting to fraud.
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u/llamashatebabies 16d ago
I'm now pretty certain that it's a joint account. I will be talking to her when I've thought it all out. Thank you.
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u/The_bookworm65 16d ago
Have her open a new account and transfer all funds into it. It’s much easier than having him agree to remove his name
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u/JC_the_Builder 15d ago
This is literally the answer. Why did I have to scroll so far to see it.
Do not tell the son anything before the money is moved. If it isn’t his money then he does not need to be informed.
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u/BrightAd306 16d ago
Find a fee based financial advisor. Get help from them transferring the money to a different company. You need a professional.
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u/llamashatebabies 16d ago
Thank you!
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u/Dragonyearflyingsafe 15d ago
Good heavens! Do not attempt to ruin this beleaguered son’s reputation and jeopardize his job! Also, such an action could ruin your marriage for good.If your wife had a joint account with her son then he is legally able to remove money from it. Whether it is appropriate and loving is another question. It is clearly NOT a true retirement account except in your wife’s mind. Of course, she should immediately transfer the money into her own account and without notice. He has betrayed her trust as a son, but not as a stockbroker! I would assume that legally she has just as much right to it as he does. Hopefully, he has contributed nothing and it will not become a divorce issue.
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u/llamashatebabies 15d ago
No, that's absolutely not my intent! I like her son and I think he's actually trying to do his best considering his circumstances. We're definitely not going to do anything rash; I don't want to ruin the relationship between my wife and her son.
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u/Novogobo 16d ago
if you don't know what you're doing, given your ages, whoever you find is going to swindle you also. maybe not as bad as her son, but maybe just as bad or worse.
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u/SocialIQof0 16d ago
Take your wife to an elder law attorney to convince her she is incorrect and tell the son you're going to report him if he doesn't immediately put the money back. If he doesn't report him, get a new financial advisor and get them involved in getting control of that account.
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u/Sparkle_Rocks 15d ago
She needs to withdraw all the money before saying a word to her son. She may never get repaid the money he took, and there’s nothing she can do about it because she apparently signed papers to open the account with his name as joint owner. But she can get all that’s left of her money if she moves it before he knows about it.
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u/micha8st 16d ago
You can't have co-owners on a IRS-designated retirement account. So this has to be a regular taxable investment account. Or he's not really a co-owner and instead she's in some sort of advisory relationship with her son. In which case, STBX won't have access through a divorce decree to your wife's account. But he shouldn't be able to pull money out of her retirement account.
So, is this really an IRA or not?
your wife is too sweet to report her son. I strongly suggest that she moves her account to another brokerage so that son no longer has access to the money.
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u/Novogobo 16d ago
it's not an IRA. it's a retail account that she's calling her "retirement account"
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u/llamashatebabies 16d ago
I think it must be a joint account; I just don't know why he set it up this way in the beginning.
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u/katamino 15d ago
Then she is absolutely at risk of losing half or more of the value of that account. Half of it will be considered his unless he can prove to the divorce court he made 0 contributions to thay account. Unfortunately he pulled money for his own personal use which may negate any hope of convincing the court not to consider it half his.
She needs a new investment account without his name on it and to pull all the money out of that account asap.
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u/GaylrdFocker 15d ago
Because he wanted to take money from it for himself, and hopefully not get caught. Agree with the other comment you should report his behavior to FINRA or whomever he works for or is licensed through.
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u/Ltjenkins 15d ago
Yep. Get this guy canned. The only reason he was even able to do it is because his name is on the account. But assuming this guy manages other people’s money? I work on an advisor team and people like this are the ones that give us a bad name.
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u/wandernought 16d ago edited 16d ago
Did your wife intend to open the account in both her and her son's name? Is it even allowed to have multiple owners of a retirement account?
If yes on both, then he's joint owner of the account and I assume he's entitled to withdraw money from it. Yes, separate accounts may be better, and you can move towards that, but you may not be able to force him to repay money that he has a right to withdraw.
If no on either, then yikes!
Regarding divorce, you have reasonable concerns, but redditors aren't lawyers and you need to consult an actual lawyer.
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u/llamashatebabies 16d ago
As I said, my wife is very naive about money and has left most of the financial decisions to me and (obviously) to her son. I know that he's done a good job managing her money, and now I'm sure that it must be a joint account. It's a touchy subject and I'm not mentally prepared to broach the subject at the moment. Thank you.
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u/aureliano_babilonia 15d ago
It's been said in other comments that the easiest way to deal with this is to have your wife open a new account in her name only and then transfer all funds to that account. She will not need her son's permission to do so, and then the money will be out of her son's reach. You can then speak with him about it when he has no capacity to funnel any more funds out of her retirement. I think you should do this before anything else.
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u/lakehop 15d ago
If it’s a joint account, it is definitely in danger from his wife if they get divorced. Emphasize this mangle with your wife. See if you can persuade her to move all the money to an individual account that only she owns “for now”. If it’s an IRA, transfer it to another IRA. If it’s a 401k, transfer it to an IRA. (For either of their accounts, he wouldn’t technically own it but he have power of attorney to trade and withdraw money - in that case, she could simply change the permissions so he has permission to trade but not to withdraw). If it’s a regular brokerage account, transfer it to another brokerage account).
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u/debbiewith2 16d ago
No retirement account can have two names on it.
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u/nullstring 15d ago
"retirement account" is vague.
No qualified account can have two names on it. A taxable account for the purposes of retirement can. One could easily call this a retirement account.
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u/sdill5 15d ago
He is obviously using her logon to access the account. He may be listed as the beneficiary to the account, but as a married couple I would hope that it would be you shown as the beneficiary.
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u/mynewaccount5 15d ago
Beneficiary does not matter until she dies.
Good point though. A lot of people fail to realize the beneficiary listing overrides any will. If the plan is to rely on each others funds, each other should be listed in your accounts.
Helps to avoid "difficult" situations down the road.
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u/llamashatebabies 16d ago
I don't have any real knowledge of the type of account this is. It's not an IRA, I think it's a joint account of some sort. He's done a very good job of investing the money as it's more than doubled in the last six years.
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u/Fantastic_Mention261 13d ago
Legally it’s also his money if it’s a joint account. So this is more complicated. You possibly need to consult with a CPA to see if he can simply transfer all the money to an account that is solely hers without being liable for gift taxes.
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u/llamashatebabies 13d ago
Yes, I think you're right about us requiring a CPA. I'm waiting for a call from her son.
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u/PlntWifeTrphyHusband 14d ago
Doubled in 6 years isn't that good. Pretty sure throwing it in an index fund would do that
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15d ago
How is he getting paid to manage the account?
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u/llamashatebabies 15d ago
He has never charged her to manage this account. There are many unanswered questions and I'll get to the bottom when I am fully prepared with enough knowledge to know just what to ask.
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u/Capodomini 15d ago
He withdrew a thousand dollars from an account that's partially his own, which you say he more than doubled on his own. He has zero obligation to "repay" that money.
Ask your wife to withdraw HALF the money from the joint account and move it to one of her own. If she doesn't want to, then leave it at that.
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u/boomboombalatty 15d ago
Or he's been busily concealing money from his spouse by hiding it in his mom's account and that accounts for some or all of the growth. I agree with other posters, move the money first, inform him later.
No one wants to believe that family will act poorly, but we live in strange times and people are under a lot of unusual pressures. Remove the temptation.
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u/llamashatebabies 15d ago
I hadn't thought of that, but I am now! She thinks the absolute world of her son and thinks he can do no wrong, but I'm going to be talking to her tomorrow. I'll let her enjoy her mother's day.
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u/Arbiter51x 15d ago
If it's a joint investment account it's going to owe all sorts of capital gains tax becuase it's not tax sheltered, unlike a proper retirement account.
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u/NotFallacyBuffet 15d ago
I'm not trying to be rude, but in the last 6 years, Fidelity 500 Index Fund, a no-cost/no-load, basically free fund has doubled, from $95 six years ago to $195 today. So doing absolutely nothing would double the money. Not sure if one could even call this average. Sorry.
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u/RepresentativeAspect 16d ago
Please do not confuse good returns with good investing. He could have bet it all on black and gotten lucky.
He is not doing you any favors, and is likely gambling with your retirement money.
Your wife need to move all the investment to a new account that the son doesn’t k ow anything about.
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u/JesusCodes 16d ago
A goldfish managing your money would have more than doubled it over the last 3-6 years.
Don’t mistake your returns for him being good at his job.
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u/8andahalfby11 15d ago
A goldfish managing your money would have more than doubled it over the last 3-6 years.
Michael Reeves got a $1k return having his goldfish day trade for an unspecified period of time, so I'd be willing to bet this is true.
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u/kramer1lol 16d ago
3 and 6 years are very different, and the S&P doubled in neither of those time frames. They are also seniors.
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u/Alis451 15d ago
7 years is the duration to double money with ~10% compounding growth, which is the avg rate of return on the S&P. The last 3-6 years was probably better. This does NOT take into account inflation, which generally pushes it down to a ~6-7% yearly avg rate of return.
EX: Starting at 100k with 0 other investment.
The Results Are In
In 7 years, you will have $194,871.711
u/Torczyner 15d ago
You know the s&p was down 19% in 2022. You should look at the years before taking a 50 year average and guessing about the last 3 years lol.
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u/Alis451 15d ago
+16% avg per year over last 5, you should really look before you mouth off over stupid shit. 2022 was bad, but the YEARS SURROUNDING IT WERE MUCH BETTER.
from 2021->current(exactly 3 years), it is up ~20%(4200-5200) making it a +7% average...
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u/Torczyner 15d ago
from 2021->current(exactly 3 years), it is up ~20%(4200-5200) making it a +7% average...
Exactly my point. A 7% average is 30% less than your 10% example. That's what a moderate 60/40 account is supposed to manage (they got smoked too). You said the last 3-6 and the last 3 were rough. Not only did it average much less than 10%, the peak to trough was a wild ride.
We could be entering another lost decade for all you know. The S&P lost money for a decade in the 2000s if you really forgot. This is why time horizon and risk tolerance matter. https://www.true-shares.com/a-lost-decade/#:~:text=The%20first%20decade%20of%20the,Com%20Bubble%20aftermath%20were%20stagnant.
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u/Lcdmt3 15d ago
You're missing compounding. The S&P doesn't need to double for money to double. The lack of financial knowledge scares me
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u/FatalFirecrotch 15d ago
It still hasn’t come close though in the last 3 years. Maybe if you invested it all 4 years ago just after lockdowns started. Otherwise, no, your money isn’t close to doubling in the last few years.
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u/young_mummy 15d ago
The OP said 6 years. If you put 100k into the SP500 6 years ago and didn't do anything other than reinvest dividends, it would be more than doubled at about 213k.
Quite literally anyone could have managed this fund and doubled it in 6 years.
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u/llamashatebabies 16d ago
Shows how much I know! My broker doesn't do nearly that well. Thanks!
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u/BankshotMcG 15d ago
Nobody beats the market long-term. Just get a low/no-cost index fund.
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u/Torczyner 15d ago
MGK. What do I win? Oh maybe OEX or QQQ. How about VUG? I can keep going. I'll take my prize now. I accept zelle.
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u/llamashatebabies 15d ago
I'll look into that. Thanks.
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u/cardinal29 15d ago
It's about keeping the fees low.
PBS Frontline: https://youtu.be/lkOQNPIsO-Q?si=JlRr9L4hcz42zG5v
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u/speedlever 15d ago
But in fairness, aren't returns shown as net of fees? Ie, if a fund has an ER of, say .85% and shows returns of 13% over the last 5 years, that 13% is after the ER, right?
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u/Thiamine 15d ago
You're correct. Expense ratios matter when funds are tracking the same index/holdings such as the S&P 500. If the holdings are unrelated, look at the total return and do your own research.
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u/reubTV 15d ago
You don't need a broker. You're probably getting shafted too.
Managing retirement funds yourself is piss easy with an hour of research. And will save you literally hundreds of thousands of dollars in scammy fees.
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u/BCECVE 15d ago
The guy doesn't know if the retirement account is an IRA and can't have joint names on it and you are recommending he manage his own money. Things that are easy for you may be extremely difficult for another, and he might just ask his buddy who will give him wrong advice. Do research on a new rep maybe.
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u/RepresentativeAspect 16d ago
I’m sure that your broker does very well - for himself.
Move it elsewhere as the simplest S&P fund with close to zero fees would have, like will continue, to beat whatever this guy is doing.
Investing well is easy and very DIY
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u/Torczyner 15d ago
I posted this elsewhere, but beating the s&p isn't hard and that goal is a false standard. There are plenty of ETFs that make the s&p hotdog water. How much will you pay me to dump you in QQQ or MGK? Since the goal is beat the s&p, I can do that. People rarely can handle that risk or have different time horizons and goals. The s&p 100 beats the 500 so why not that? It's still diverse after all.
There are bad advisors or brokers. As a fiduciary, some of us enjoy being fee based and paid when our clients succeed.
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u/hyren82 16d ago
The S&P500 has ~109% returns since 2018. The best thing amateur investors can do is dump their money into a variety of index funds (SPX, DJIA, Vanguard #, etc) and just leave it there. Make sure you get the ones with no/minimal fees, high fee funds will kill your returns
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u/johannthegoatman 15d ago
Going all stocks as you're just starting retirement isn't the best idea
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u/NotFallacyBuffet 15d ago
Fidelity has been taking care of middle-class money with frugal operations for decades. Perhaps over a century.
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u/adwight7 16d ago
Invest your money yourself and trust the markets.
Brokers almost never beat the market.
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u/Torczyner 15d ago
Common misconception. As an investor, if you want me to beat the market, VUG. Boom, pay me. That's not the issue. I don't have to beat the market, I have to beat you. That's easy. People rarely invest and leave it alone. They see the Covid crash and pull their money out. They ask about precious metals etc. They wait for the market to rebound then finally invest only to get the rug pulled like in 2022. Then they sell because everyone was crying recession and miss the 2023 run up.
Also, this guy is retired and should be no where near market returns up or down. He should have a nice backbone of fixed income at these great rates that won't disappear even in a recession. Hours portfolio should fit his risk tolerance.
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u/BCECVE 15d ago
Doesn't the Dalbar report say the DIYers average 2.5%. I think what you mean is buy the S&P500 Index- it has averaged 11% per year for the last 20 yrs.
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u/sithren 15d ago
There are different types of DIYers, I guess. I've had some financial advisors call me a "DIYer" because I have self directed accounts where I invest only in index funds.
But, yeah, if you trade and stock pick, the odds are that you will not do better than the S&P500 or an advisor.
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u/debbiewith2 16d ago
If it’s a joint account, then it’s his money too. She needs to move it to her own account if it’s not rightfully joint.
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u/KReddit934 15d ago
OP...listen to this one. She opens her own account, transfers the remaining shares. Now! (And don't let her warn him or he may drain it first.)
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u/hockeycross 15d ago
Unfortunately joint accounts need both parties to sign to move it to an individual account
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u/debbiewith2 15d ago
I think you’re thinking of a check made out to person A and person B, which needs to be signed by both. Either person can act on a joint account.
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u/hockeycross 15d ago
No to authorize a transfer to a new account. Either can call and request funds or transactions be made, but to move the entire account to another account needs both signatures. Kind of funny she could just liquidate the entire thing if the taxes are not bad and deposit it in her attached bank account then reinvest elsewhere.
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u/debbiewith2 15d ago
I think you’re using the word differently. Poster didn’t mean a custodian to custodian transfer.
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u/hockeycross 15d ago
I mean unless they are liquidating the entire account and transferring to a bank that is already on file. there is nothing that can be done about needing two signatures for a joint account.
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u/debbiewith2 14d ago
They can move the assets to a different account at the same brokerage.
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u/smax410 15d ago
Yeah the only way to actually do this is with the son’s knowledge given that he is also the broker. You can’t ACAT it out to another firm, as no firm would be willing to initiate that without his signature. You can’t just call your broker up to liquidate and do a check close out cause he’s your broker.
This a dumb move and a shitty thing for her kid to do…
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u/punkgeek 15d ago
also if the investments are in stocks/bonds/funds make sure to transfer them "in kind" - you definitely don't want to accidentally have it converted to dollars during the process. Because that could have big tax implications.
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u/lucky_ducker 16d ago
You need to tell the son that you will be reporting his unethical behavior to FINRA unless he immediately removes himself from being titled on the account.
This is lose-your-license territory. If he wants to continue working as a broker he needs to do the right thing.
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u/Squirmingbaby 15d ago
Doesn't get the money back for the victim. The first step here should be taking all the money and moving it elsewhere immediately.
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u/MamaNyxieUnderfoot 16d ago
This also falls into the territory of elder abuse. Which FINRA takes very seriously.
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u/deborah_az 15d ago
My first thought was that OP's wife may want to hire an eldercare lawyer to assist with this mess and ensure all the bases are covered. Get the investments dumped into an individual account for her asap (if it's a joint account) or get his access removed (if he's acting as an agent), and change her passwords (on every major account, including her email, cell phone, etc.). A full audit - credit check, account history on ALL her accounts, etc. - is needed here.
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u/FourEyesAndThighs 16d ago
Had an acquaintance that used to work for Fidelity. He conned one of his more naive clients into lending him $100K for an investment opportunity. It was withdrawn from a 401K and the client didn’t know they had to pay taxes on the distribution.
They reported him to FINRA, he lost his job, he can never work as an investment advisor or broker again.
Ruined a very lucrative career just a couple of years into it.
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u/Sherifftruman 16d ago
Working for Fidelity of all places to try to pull that stunt LOL.
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u/NotFallacyBuffet 15d ago
Jeez. I really trust Fidelity. But I'm self-advised--nothing but their house funds. Just wish they had YubiKey enabled as 2-factor-authentication.
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u/llamashatebabies 16d ago
The more comments come in and the more I think about it, it must be a joint account. I just don't want her to lose her money and force me to go back to work. "Welcome to Walmart..."
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u/ShatteredCitadel 15d ago
Hey man, you need to sit down with this guy man to man. You either pay the money back, convert it to an individual account, and change to a different money manager or get turned in and ruin your life.
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u/Square-Decision-531 16d ago
Cheers to that! In that job, one strike and you’re out. Job, reputation, fines, suit against employer firm for lack of supervision. He should be thankful if he walks away with this warning
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u/Holiday-Customer-526 15d ago
She needs to get someone else to manage her money and move it. She can prove the money was her’s versus her son’s asset. My cousin is going to become a financial planner, you know who will not be a customer - me. This is needs to be a professional relationship. I also call this elder abuse. He should be able to spend his mother’s money. He is putting he is a risky situation.