Shocked at what an RIA did (or more specifically what the did not do)
Just on-boarded a new client this morning. The have @ $600,000 at a very large RIA and @ $400,000 in two qualified annuities. And $6.5m is cash at banks. All is 100% cash or money market.
The annuities are 15 and 25 years old and are earning very low returns and have been out of surrender a long time.
I will be bringing the annuities and then most likely will be cashing them out to re-allocate.
They asked me why I could do it but the other firm could not. They said the other firm told them they could not do anything with the annuities.
I really have no answer. All they had to do was a process a full liquidation and transfer of funds into the IRAs.
I can hold them in a custodial IRA so it is easy for me to become agent and do what’s needed and maybe the RIA could not hold them, but still the other firm should have been able to help them.
Only possibility is the clients panicked to cash and it looks like fees got turned off so maybe the advisor simply does not care to service them. Still, they are ready to get back in and are willingly paying my fee.
We did discuss market timing and why going to cash is usually not the right thing to do. (Is it ever?).
I discussed a mod-conservative portfolio, with a direct index fund for tax efficiency, and that they could see negative returns but they need to “stay the course” when that happens.
Any ideas on why the other firm could not do this for them?