Complaint / review text:
To begin with I owned a small independent brokerage for 18 years and sold out in 2002. After that I spent 2 years as an independent fee only State RIA. I know a bit about the business. Recently there was a death in the family and the successor Trustee took $250,000 due to the beneficiary and placed it with Edward Jones. The beneficiary did not have an E. Jones account and I am still wondering how E. Jones took an FBO check and created an E. Jones account without any signatures from the beneficiary. The beneficiary lived 1500 miles from the E. Jones broker and wanted to immediately move the money to their bank. E. Jones said that no can do - it is a new account and you cannot move or cancel within the first 30 days.interesting because the beneficiary never signed any account application and E. Jones had their money.
Back in my day in the business you had the account app plus other papers that were part of the “know your client protocol”. So we go to a local E. Jones broker, we didn't even have an account. They had the beneficiary set up in 2 hours to be able to move the money to their bank. Now there was a bit on the computer that max out a day is $25,000 do they scheduled to have some come out each day until all funds were moved. After the money had been in some form of cash account at E. Jones they would not relinquish the money until the beneficiary signed as account application. So what if they didn't want to open an E. Jones account? Would E. Jones just hold the money in a cash account forever? I am not sure how FINRA feels about the entire affair and may look into it. Plus before there was a signed account application, there was an inherited IRA that the Successor Trustee put with E. Jones that was to go to the beneficiary.
The beneficiary didn't want to have it with E. Jones but E. Jones wouldn't relinquish the $250,000 unless the beneficiary gave E. Jones the IRA account. According to IRS publication 590, an Inherited IRA can only be transferred one time, after that there is a tax problem. Talk about being held hostage!?!? The problem is that the Successor Trustee is placing beneficiary money with E. Jones before consulting the beneficiary. The Successor Trustee is to provide audits to the Trust, pay Trust expenses and disperse money to the beneficiaries. The Successor Trustee is NOT to be determining who, what and where the funds go. The Successor is stepping outside of his role and creating stress for the beneficiaries and their family. I wonder if the Successor Trustee is aware that he falls under the Prudent Man rules and should worry more about protecting the Trust assets from loss while inside the Trust.
So let this be a warning — Do not make the Successor Trustee be someone that is controlling because it will cause a problem in the life of the beneficiaries. There are things that E. Jones had a 90 year old, sick man invested in that was WAY out of line with the risk tolerance of such an individual. I'm still scratching my head about the check being deposited into an account that did not legally exist and then E. Jones wouldn't release the funds.