TAKING STOCK: Stock firms

Dear Mr. Berko:

Since my first husband passed in June 2001, I've had an account with one of the largest stock firms in the country. At that time, it was worth more than $181,000 and is now worth $91,000, which is abominable, don't you think? I'm not pleased with this performance. And I'm not pleased with this broker. Sometimes he won't return my phone calls for 30 or 40 minutes. And it seems that when he does, I am often involved in my important club activities or a current community endeavor. So his calls can be very untimely and annoying to me. I think you can understand that. Six weeks ago, he tried to sell me one of those ghastly variable annuities, but I adamantly told him that I was disappointed in his sales plan. Last month, he attempted to sell me two mutual funds even though he knows I will only buy common stocks. He doesn't pay attention to a thing I say, and I'm losing my patience with this man. Well, this week, he told me that my account was too small and does not generate enough commissions (I pay him an annual fee of 2 percent) to justify his time or his firm's account size requirements. He told me that his office manager wants me to close my account. He wasn't rude, but I could tell that he wanted to be. I'm insulted. I'm offended. Can this firm close my account just like that? Do they have the right to do that? What do you recommend I do? My husband refuses to become involved and suggested that I contact your for advice. Can you imagine such a thing? I'm really distressed about this.

S.D., Durham, N.C.

Dear S.D.:

I'm sorry that you are distressed. Sometimes a very stiff double gin martini (which I understand is the new fad in some Durham social circles) can be very helpful in dealing with stress. Certainly, you recognize there are some brokers that no matter how hard some might try, we are just never able to see eye to eye. I seem to have that problem with lawyers, politicians and drug dealers. Because you are a very special person, you must find that very special broker, and certainly, this current fellow doesn't qualify.

Now, please know that Merrill Lynch can terminate its relationship with Prince Rainier at a click of a computer key, or Morgan Stanley can refuse to accept an account from Barbra Streisand with a simple "no, thank you." So consider yourself among good company.

However, by the same token, some of the people with whom Merrill, Morgan Stanley or Prudential do conduct business might cause you to toss your cookies, but you must admit that they probably pay their brokerages a little bit more than the $11,000 per year you pay.

Unfortunately, your $1,800 doesn't slice the salami, cut the mustard or pay for a month of your broker's branch office's coffee service. Lots of brokerages have minimum accounts, just as your fine club may have spending minimums for food. But the gauche manner in which this brokerage acted was in poor taste.

And yes, an account that falls in value by $90,000 in 10 years is unacceptable and may be a good reason to seek a special broker at another firm. And when you do, I recommend that you keep track of the principle you may withdraw, as well as the dividends and interests you receive. Most very busy and importantly involved folks like you often forget to keep track of the dollars they withdraw from their trust or checking accounts. Meanwhile, you might consider using your husband's brokerage firm.


Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate website at www.creators.com.

© 2011 Creators Syndicate Inc.

Published: Mon, Apr 4, 2011