My mouth is still open in amazement after just reading that Ameriprise Financial is imposing a new annual account fee on accounts between $100,000 and $500,000. ARE THEY KIDDING? The fees will be between $40 and $80 per account each year and oh, the good news – household fees will be capped at $200 per year. I ask again – ARE THEY KIDDING?
Many firms including Ameriprise charge smaller accounts (generally under $25,000) an annual fee; and honestly, such accounts are often times inactive and unprofitable. But to impose this new fee on accounts of up to $500,000, especially now, seems incredibly short-sighted (I’m almost at a loss for words for once!). I’mm sure that our friends at E-Trade and the like are salivating!
Yes, it is likely that advisors will “eat” these fees for their top clients and pay the fees themselves. In these cases, instead of unhappy clients you will have unhappy advisors. And lets not forget recruits – this is going to go over like a lead balloon with them! And while I don’t subscribe to the whole main street v. wall street rhetoric, I have to imagine that there will be negative press associated with this move.
Ameriprise is certainly making it easier for other advisors to compete against them; I would certainly use it to sell against them!
The only winner from this – if you want to call them a winner – is presumably the company itself, as they certainly will be collecting some new fees. But I certainly hope their revenue forecast considered losing some combination of clients and recruits for sure, and potentially some advisors.
Can you say – short-sighted ill-timed move?
