Dear Mr. Berko: I'm 76, and my husband of 51 years, who was a certified public accountant, died at his desk last February doing tax returns. My husband's broker called to express his condolences and asked me to bring him a death certificate to transfer the joint account to a single account, which I did. Now he's calling and telling me that I should sell most of the stocks in the account. He said and wrote that the account “needs to be protected from a highly volatile market, from a rise in interest rates and from a possible downturn in the economy.” He has selected a portfolio of five mutual funds and two annuities (enclosed) that will preserve the income and capital for my two daughters. We've owned most of the stocks in this account for 10 to 30 years. The account is worth $1.6 million and last year paid $47,000 in dividends and interest. I don't need this income. I will have enough money from an office building (to be sold next year) my husband owned with three friends, from the sale of the practice to his two partners and from Social Security. The broker has spoken to my two married daughters, who think his suggestions are in my best interest. I won't consult with his two accounting partners, whom I haven't gotten along with for 25 years. One of my husband's friends told me to write you because you helped him in 2001. Would you please look at this account and the broker's recommendations and tell me what to do? And could you please advise me soon, because the broker has been calling me for a decision? I have enclosed a check in the amount of $1,000 for your time.
MW, Columbus, Ohio
Dear MW: I'd prefer that you had been thoughtful enough to enclose a stamped, self-addressed envelope rather than a $1,000 check, which I won't accept. Besides, you didn't sign it!
Because your daughters' names are not on that account, this broker has no business speaking to them about your investments. His reason for talking to them is transparent, offensive and a serious violation of his fiduciary responsibility. And you must report this, not to his manager, who doesn't give a fig, but to the CEO of his firm in New York. Get rid of this broker immediately. Don't ever talk to him again. It's sad that integrity and probity are so difficult to find. But stockbrokers are in the selling business, not in the advising business. And at the risk of being offensive, I suggest that your two married daughters are dumber than mustard. Don't ever consult them for financial advice. Their quick embrace of this broker's recommendations concerns me, and it should concern you.
Your husband was a genius. About 95 percent of your portfolio is represented by Unilever, Novartis, Bank of Montreal, Canadian Imperial Bank of Commerce, GlaxoSmithKline, Colgate-Palmolive, Monsanto, E.I. du Pont de Nemours & Co., 3M, AT&T, Verizon, McDonald's, Johnson & Johnson, Coca-Cola, Exxon Mobil, Royal Dutch Shell, Procter & Gamble, Cisco Systems, Kinder Morgan, Walgreens, Clorox, Bemis Co. and Nestle. Those are some of the finest companies in the galaxy. However, I wonder why your husband didn't have Wal-Mart and a few electric utilities in this impressive portfolio. These issues have been improving their revenues, growing their earnings and raising dividends since Hector was a pup. And after speaking with my trans-mortality enigmatologist, I'm convinced those issues will continue to improve their numbers till the second coming and even afterward. Selling any of those issues would be sacrilege and an insult to the memory of your husband. Stay the course. If any salesman suggests he can improve your portfolio, tell him to stuff it. At your age and stage, it can't be improved. Let's hope your daughters will regrow their brains and keep these inherited shares and then pass them on to your grandkids.