As many of our readers are aware, after discovering that Fidelity charged $420 million in management fees on $430 million in income in his money market account, SD contributor AGXIIK recently removed his entire IRA from Fidelity, set up an LLC to legally oversee his own IRA, and converted his paper IRA to physical metal in his own possession with the assistance of SD Bullion.
Fidelity made the mistake of contacting AGXIIK Thursday to inquire about his account and whether Fidelity was meeting his needs.
Needless to say, hilarity ensued.
*MUST READ!!
From AGXIIK:
I just had an opportunity to give Fidelity a huge middle digit. One of their smarmy reps called to asked me about my account and if Fidelity was meeting my needs. After giving him the complete overview of how Fidelity tried to hose me on a wire transfer from Canada by telling me how their extraordinarily experienced back shop of experts made this service so valuable, I told him a crew of spider monkeys could have accomplish the same thing, I ended up saving about $7000 using my local bank.
I then told him how I ended up getting a grand total of 1 BPS on my account while Fidelity helped themselves to the other 99 BPS on income derived from managing a short term Money market account. That income was $430,000,000 Hmmm? Fidelity takes $420,000,000 out of a total income of $430,000,000 to service a money market account with an asset base of $120,000,000,000. We long suffering account holders split up the $10,000,000.
This MM consists mostly of short term banking and commercial paper, including several banks that are under severe Euro or Federal scrutiny. I felt so warm and fuzzy with my money invested in those types of securities. I guess $420,000,000 is a fair income for managing a portfolio of junk paper and failed banks. The little people will need to be happy with the scraps. The captain of the Titanic was probably well paid to manage his ship too but that one ended badly too.
The rep’s response was pretty canned as he apologized to me for the issues I related. I told him that his apologies were not warranted and since I am a former banker I suggested that when you screw someone, don’t think that an apology will make a difference. All it does is piss off the FORMER CLIENTS.
Of course I related as to how my 27 year client relationship seemed to give Fidelity a opportunity to think they could screw me, rehypothecate my accounts, lease out my shares and generally rape and pillage my accounts. Interestingly enough he knew what I was talking regarding rehypothecation So I told him “don’t piss down my neck and tell me it’s raining, sonny boy!’ Da** that felt good!
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
Glad AGXIIK is on our side; Count you as a Silver Friend man!
Our apologies for this morning’s issues with the site, we appear to have been experiencing a DNS attack of some sort. We appear to be back up for now.
-Doc
AGXIIK…Want me to bite that Fidelity guy for you?
My thanks go to Doc and Bull Run for their encouragement to buy and hold physical gold and silver using Doc’s rule # 1 “If you don’t hold it you don’t own it”, Warren Pollack’s challenge to Fidelity and the clear recognition that they are little better than MG Global in their usurpation of client accounts and Ann Barnhardt’s courage to take on the paper ponzi thieves running Wall Street with her battle cry to the people to get out of paper.
DONT PISS DOWN MY NECK AND TELL ME ITS RAINING SONNY BOY!!
lmao! im crying laughing!
Doc, sorry to hear about the site attack, I’ll click a few ads to provide some funds for the tech gurus.
Click, click, click!
LMFAO. You are Da’ Man. Glad to have you giving us your opinion AGX. And so it goes for those here who try to troll us into paper trading. Thank you much sir and looking forward to the day all us SD’s can have that reunion we’ve talked about on occasion. I’ll be laughing all day. Wwwhhhhoooooooooo! It don’t get no better than this.
what sucks is that Fidelity has been my ONLY option for 401k type investments thru work for YEARS now. As long as I have to play somewhat in this fiat world, I’m going to gladly take whatever currency I can from whoever is willing to do matches etc, but I’m really thinking it’s time to xplore doing something with that OLD 401k that’s still sitting with them cause I just don’t know what to do with it (rollover or convert to IRA or…)?
How hard was setting up the LLC to be able to manage this yourself? Is it something that’s advisable for the “non-pro” (I’m an engineer, not a banker by trade
).
Hey AGX
The propensity to cheat is pretty much universal.
There are big crooks, like MFGlobal, and small ones like my local vehicle service centre. MF took $1.6 billion off clients, but my car guy is more modest, proposing I replace my catalytic converter for $1000 to deal with a noise off the dashboard when I kickdown the autoshift, whilst a second opinion from a rare honest operator said it was a broken suction seal replaceable for $100, with a guarantee attached.
As a rule one should get a new general insurance quote every 2 years (car, home, home contents) from a new outfit, to make sure the present incumbant isn’t taking a chance because he got under your skin enough.
Same applies for money management in any form, from a simple current account to discount brokers of complex derivitives.
New brooms sweap clean as a general rule, and the more often tested the better.
I do not blame the chancers, for they act as per human nature.
If I get caught, it’s usually through my own greed for what’s being offered, or being forgetful of the time honoured rules of due diligence.
I don’t think these SD observations will result in punitive awards, but I do think they will stimulate critical thinking.
I just went thru a smashed elbow Hospital Plan Claim, and the gremlins are daunting. Hospital Plans mimick Mobile Phone Plans in that they require an Actuarial level of mathmatical understanding for interpretation.
My experiences are in South Africa, a continent away from the USA, but to me the human imprint to cut corners can be seen in ALMOST every one of Earth’s billions of inhabitants, both individually, and in groups. The USA is full of individual and group corner cutters, just like in my South Africa, just like anywhere else.
To survive as individuals we need to be critical and careful of what we are presented with, be it a huge mortgage agreement, or a simple service to cut our lawn.
In South Africa, the Latin legal term CAVEAT EMPTOR applies overridingly to all contracts, which means “The buyer shall beware”, thus placing the onus on the Purchaser to exercize due diligence.
Even if CAVEAT EMPTOR is not legally enforcable in your country, it’s a good idea to do the due diligence before committing yourself to anything legally binding.
Andy Z One of the sad things we find is that, on almost a daily basis, thievery is commonplace on most street corners. It seems that we have to fight a constant rear guard action against this. Getting a second opinion, reviewing the fine print and making a convincing case that a service provider gives you a better deal are all ways that we can save the pennies and dollars in our pockets.
Aragornsos. As for the LLC, it is fairly simple but not anything than a non-lawyer should undertake. Doc is working on a means for readers to avail themselves of this service. I tested a system on my own and found it workable and within the IRS rules. In its essence a custodian bank receives your IRA or other retirement funds. You can direct them, acting as your IRA custodian and co member of your business/investment LLC to move IRA funds to the LLC so as to purchase certain assets, whether they be real estate, stocks, bonds, notes, land or precious metals.
PMs are a distinct sub-category within the eligible investments I like them because it keeps the trading process simple and within your direct control. Unlike other assets which do involve paper of one sort or the other, PMs have no counterparty risk and allow you to retain control of their disposition in a simple and controlled manner.
There were some newswire stories about two months ago talking about large money market houses “forgiving” the “management fees” on money market offerings. If memory serves, Vanguard was one of fund companies doing it. The tone of the article basically sought to impart sympathy for the companies that were subsidizing the money market operations from other divisions (yeah, divisions where they hypothecate and re-hypothecate and speculate like heck just to make up the difference while risking everything).
Sick world.
AGXIIK, it was a long road but now that you’ve got your own LLC and choice of assets, it must feel darn good!
AG Thank you for sharing.
AG said;
Thank you AGXIIK for sharing this story. Unfortunately it is a similar story to what I hear from clients when working at ABC Bullion. Many tell of poor financial management of their investments, excessive fees on portfolios that lost money and the stubborn refusal of fund mangers to offer precious metal investment options.
Tears of the moon I read the ABC prospectus. It appears to have similar qualities to some of the bullion storage and retirement security facilities as we have in the US. In my initial research into SDIRA I was tempted to have someone else hold gold bullion invested through my IRA Even Fidelity offered that service, at a fee of 3% in and 1% out through a fiduciary called Fidelitrust. That seemed a little steep but tempting until I started reading Silver Doctors. Docs’ Rule #1 If you dont hold it you don’t own it became my operating standby. We have read a few articles on SD about some of the bullion banks and their ‘leakage’ problems so this became a factor in my decisions as well. The second of the 3 services that provided SDIRAs got a write up in the WSJ. They were being sued for not taking care of their client’s bullion management. Some of the clients found the custodian, somehow affiliated with this firm, was ‘bullion walking’. That a nice way of saying your custodian was stealing from accounts. Once faced with this problem the firm who finally did the legal work was one that did nothing more than that. Once completed, we were able totake personal possession and title to the PMs allowed under SDIRA. That is the essential difference between an outsider doing this service and the owner of the LLC secure their metals under their own control. It’s a world of difference and may be unique to the US from what I can see.
Good On Ya AGXIIIK I bought 60 oz from Doc through my business account and most of my business holdings are in Physical.
AGXIIK glad to see you could take delivery of your physical bullion, I wasn’t aware that was possible for an IRA in the land of the free, well done.
Tears Very funny. I guess Australia and the US do have that small open window to retirement plan PM holdings. I will be seeing my CPA early next year to make sure he is on board
Great article AGX! I thoroughly enjoy reading your articles but this one was particularly good… two thumbs up! :-)
Thanks AGXIIK, yes get your CPA up to speed on your investment allocation and rationale. My CPA asked me for the first 2 returns of my SMSF, “are your sure you aren’t overweight in silver? have you thought of adding some real estate unit trusts or mutual funds?” – she doesn’t ask me that anymore
Ed B Doc and Bull Run are working on that solution. It should follow the one I used but with some additional specifics to avoid any pitfalls and make the process smoother. Mine was a little bumpy because Nevada has some legal requirements that are not commonplace with other states. NV is also very expensive to file LLCs since they have no personal income taxes. Fees are therefore higher.
Fidelity people are a piece of work. Fortunately the custodian we used on the SDIRA came at Fidelity from the outside, did not ask them ‘mommy may I’ and got the funds transferred without fuss. The F people are pieces of work when it comes to extracting your money. I am glad you were able to do so. Nothing would please me more that to see 1,000,000 people each take $100,000 in accounts from Fidelity Not that they would care but it might send a message while allowing people to take charge of their financial futures without Abigail Johnson’s oversight