First Person: Lack of Broker Communication Makes Small Losses Seem Worse

SULLIVAN, Ill. — The first time I spoke to a broker was at 26, about the same time it dawned upon me that I needed to invest for the future. He took him two hours to explain my 401(k) options and to present his contact information. Each communication from the firm listed this contact information on every page. Based on this level of personal contact, I trusted that there would always be a broker to answer my questions.But I soon learned that broken communication equals broken trust in my broker.

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There was someone to answer my questions until Aug. 1, 2009, when my company turned our retirement plans over to another brokerage; my investments were just beginning to recover from the economic downturn. Suddenly, I was unaware of whom to contact with my questions. My company had sold and the corporate financial contact was not answering emails.

My communications and investment reports were signed with the brokerage name, but there was no personal contact. No contact is listed when accessing the account online. The only contact information listed is a 1-800 number. My investments are now in the hands of a faceless entity. I have trouble accepting this, even a year later, because I believe that everyone should be personally involved in their portfolios. This includes being able to speak to and trust the broker handling your plan.

Even small losses are hard when trust in my broker is lacking. I only have a $2,144 vested in my portfolio’s $4,014 current balance. That is not a lot, but given its current and fairly steady 3.88 percent rate of loss, that amount is being whittled down monthly. When your investments are only in the four-digit range, you notice every hundred that drains away. This causes worry that is compounded by the lack of contact to explore options and has been fostering mistrust for months.

Added to this is the statement on all my investment reports that the brokerage only expects my balance to be $11,000 in 35 years. This is mystifying, as it was over $6,000 three years ago. When the account was switched over, it was to the equivalent plan I had set up with my first broker. There is probably an excellent explanation, but I’m not sure whom to trust or talk to.

My fiance and I have recently discussed what to do with the money. It has become clear that the lack of trust I have in my impersonal broker does is no longer acceptable. The only question that remains is whether to trust another broker, invest the money myself or plow it into real estate.

The four grand that I currently have can even be smartly put to use in my own home, with a conservatively estimated $20,000 return. That would be a $14,000 increase on what my “broker” estimates and 34 years less to see the fruits of my investment.