Mutual Funds

This past December I received an email from a company that manages one of my retirement accounts. The email stated that "your recent trade has been approved." I found this to be alarming as I’d not authorized any trade.

So I got online to see what was going on.

As it happens, the "trade" was a $12.00 service fee.

I knew all about this particular service fee as the company had charged me the same fee last year due to the fact that one of my funds had dipped below a certain level. Last year I’d let it slide partially due to laziness and partially due to the fact I figured the market would recover enough that I wouldn’t see the fee again.

Two years in a row, though, was too much for me to bear. And, besides, I had the company contact info on my screen which removed the laziness portion of the equation.

So I gave Fidelity a call. (If they’re going to charge messed up fees, they deserve to be outted.)

The guy that picked up the phone was pleasant sounding and I immediately felt a little bit of guilt over the grief I was about to give him. I wasn’t really angry as much as I wanted to express my displeasure and I was hoping it would come across.

I gave the rep my account number and said, "I’m calling about the $12.00 fee I’ve been assessed."

"I see," he said, "that one of the funds you have is low enough in value that a maintenance fee has been charged. Once a year the fund manager looks at the accounts and funds with balances below a certain level are assessed a fee, otherwise it’s not fair to the other account holders of that fund."

While those may not be the exact words he used, or even make sense to anyone who knows anything about mutual funds (that is, I may have butchered his part of the conversation), those were the main points (you’ll notice the bullet points form stair steps): 

• The balance was low
• A fund manager reviewed the accounts
• Somehow a low balance was unfair to other customers

"If you look back," I said, "to two years ago you’ll notice the fund had enough money in it that I wasn’t charged a fee."

"I see that."

"What this says to me is that Fidelity has lost so much of my money that you now feel you have to charge me a fee to keep an eye on it. And it’s not like you guys have to do anymore work to watch it — when the balance gets so low you don’t take my money out of the vault and put it in a shoe box on someone’s desk and each morning he opens it up, does a count and notes that ‘Delmer’s pittance is all safe and accounted for." It’s all done electronically. As a matter of fact I’m certain the fund manager didn’t go through a printed report line-by-line when he did his review. He probably received an electronic notification from a computer that said, ‘Delmer’s balance has dropped low enough that we can hit him with a fee’."

Up until this point I had a little bit of mock exaggeration in my voice as I was having some fun with my rant. At this point I paused and said, "This isn’t about the $12.00. It’s about the principle of the thing. I’ll spend more than twelve buck on lunch today. And I know everybody lost money last year."

The rep told me Fidelity was happy to have customers call and that he had not trouble refunding my $12.00.

I’m certain he’d have refunded the $12.00 without the rant, but I’d prepared it and I wanted to share it with someone.

(Well… I prepared a version of it last year and shared it with all of you. But none of you bothered to send me any cash.)

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