Q. Years ago, around 1988, my husband and I opened Roth IRA accounts. These were small accounts of about $4,000 and we have just left them alone. Recently, the fees have gone up. We thought we remembered paying a $500 upfront load fee so there would be no annual charges. I contacted the bank for the old paperwork and was told they did not keep records after seven years. I finally got the signature cards. I did not get copies of the actual documents. What can I do?
– Confused investor
A. There are a couple of confusing things about your question, but first:
Have you ever gone into New York City and seen a guy with three cups spinning around on a table? You have to guess which one has the peanut in it.
“Well, financial services – and all businesses – are like that,” said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton. “There is always a peanut. You just need to figure out where it is.”
Lynch said if you bought something in 1988, the business still sends you statements and in theory, still has to service your account.
But let’s start with that commission you said you may have paid.
“If you paid a $500 commission on a $4,000 investment, that looks like a 12.5 percent commission, which seems extremely high,” Lynch said. “I do not know the laws in 1998 but now, that would not be a legal fee to charge.”
Second, you’re guessing you opened the account in 1988 but that’s impossible. Roth IRAs were established under the Taxpayer Relief Act of 1997.
Lynch said we’ll assume you set this up in 1998.
“What this tells me is that you really didn’t look at this at all for around 20 years – shame on you!” he said.
Generally, Lynch said, broker dealers keep order records for three years and customer documents for around six years.
He believes with all the mergers and acquisitions that have happened over the past 20 or 30 years, there is very little documentation on your $4,000 IRA.
He offered this advice:
“A $4,000 account will never get serviced as there is not enough money from fees to pay for it,” he said. “Consolidate your accounts so that the value is larger and you can have someone servicing your money.”
And be sure to look at your investments on a regular basis – at least annually if not more often – and make changes as needed. Always review fees and performance.
Email your questions to moc.p1539925546leHye1539925546noMJN1539925546@ksA1539925546.