Issue with Financial Planner--looking for thoughts/input

[QueenIsabella]

I will try to keep this short. Figures have been changed for privacy...

Every month, DH and I take a withdrawal from his IRA. Taxes are taken out, and the balance, $10,000, lands in our checking account, around the first of the month.

Last week, my bank sends an email, saying I'm about to overdraw my checking account. I freak out, since my checkbook shows a balance in the thousands (yes, I still use paper checks and a paper balance book thingie--no criticism, please! We just don't like online banking.). I call my financial planner, his team works to get several thousand transferred in to the checking account. No overdraft fees or bounced checks--whew! But, I don't know what happened (massive math error? hackers? spendthrift alter-ego?).

This week, I get my monthly checking statement--I must admit, I don't usually check these closely, but I did this week. It showed that our deposit wasn't $10,000, but $5011.38. I look at the August statement: $10,000 deposit, as expected. July statement: deposit is $5082.97. June and earlier are $10k, as they should be.

I sent an email to our financial planner, who is supposed to be handling this, asking what happened. His underling calls me, says it's "an error, deep in their system, that's been corrected", or something like that. That's all the explanation I get.

The more I think about it, the more questions I have. Like, why July and September, but not August? Was there a problem in August that was corrected? If so, why wasn't there more diligence, and why weren't other months looked at? Why the two different, odd amounts? Were taxes taken out? At what rate? Did this happen to other people? Should we be concerned about other accounts? If it was only us, were we hacked somehow? What are they going to do, moving forward to make sure this doesn't happen again?

We were fortunate in that our bank caught it before it became catastrophic. We're also fortunate that we had other money to pull from, to prevent a catastrophe. Others might not fare so well.

I sent my questions to the planner, he's calling me Monday for a full discussion.

So, my question is, what would you do? Would you still have confidence in your financial planner and his team? What other questions should I ask? Any other thoughts? Thanks for reading.

 

[AgentMama]

I think you definitely have some legit concerns, I'd wait until your call on Monday for the explanation of what happened, does it sound plausible, do you think they've taken the appropriate corrective measures moving forward? If you aren't satisfied with the answers, then you'll have to escalate and decide how to move forward.

Good luck!

 

[sam_gordon]

I will try to keep this short. Figures have been changed for privacy...

Every month, DH and I take a withdrawal from his IRA. Taxes are taken out, and the balance, $10,000, lands in our checking account, around the first of the month.

Last week, my bank sends an email, saying I'm about to overdraw my checking account. I freak out, since my checkbook shows a balance in the thousands (yes, I still use paper checks and a paper balance book thingie--no criticism, please! We just don't like online banking.). I call my financial planner, his team works to get several thousand transferred in to the checking account. No overdraft fees or bounced checks--whew! But, I don't know what happened (massive math error? hackers? spendthrift alter-ego?).

This week, I get my monthly checking statement--I must admit, I don't usually check these closely, but I did this week. It showed that our deposit wasn't $10,000, but $5011.38. I look at the August statement: $10,000 deposit, as expected. July statement: deposit is $5082.97. June and earlier are $10k, as they should be.

I sent an email to our financial planner, who is supposed to be handling this, asking what happened. His underling calls me, says it's "an error, deep in their system, that's been corrected", or something like that. That's all the explanation I get.

The more I think about it, the more questions I have. Like, why July and September, but not August? Was there a problem in August that was corrected? If so, why wasn't there more diligence, and why weren't other months looked at? Why the two different, odd amounts? Were taxes taken out? At what rate? Did this happen to other people? Should we be concerned about other accounts? If it was only us, were we hacked somehow? What are they going to do, moving forward to make sure this doesn't happen again?

We were fortunate in that our bank caught it before it became catastrophic. We're also fortunate that we had other money to pull from, to prevent a catastrophe. Others might not fare so well.

I sent my questions to the planner, he's calling me Monday for a full discussion.

So, my question is, what would you do? Would you still have confidence in your financial planner and his team? What other questions should I ask? Any other thoughts? Thanks for reading.

People and computers make mistakes. It's POSSIBLE they noticed the July statement was wrong, thought they fixed it, but it didn't "stick". I agree with seeing what they say during the call Monday.

Do you have any kind of statements (or electronic access) to the IRA? How much does that show taken out in July and September? If that shows two $10k withdraws, you're "missing" nearly $10k. Where is it? If the deposits in the checking account match the IRA withdraws, then you're not "out" anything (aside from headaches).

 

[dvcgirl67]

I know you're financially savvy, but one basic question......sounds like your FP has access to your husband's IRA (and presumably other accounts). Do you check your balances in those accounts....independently? So, not on paper or digital statements from them, but directly from wherever those funds are invested? Or have they invested these funds for you? Is this a large firm? If so, I'd want to speak to someone in addition to your personal FP.

My first thought is it could be a mistake....but the thought of embezzlement goes through my mind as well. Perhaps the short deposit in August was a "test" to see if you'd even notice.....and it sounds like you didn't (easy to do), but they sent the full amount in August, but then not in September....perhaps to see if you'd notice again? It feels a bit off to me.

Edited to add...if this is an error "deep in their system", presumably they knew about it. Why didn't they notice it in July, alert you then...and correct it? If it's some type of software bug, I would imagine you weren't the only person affected.

 

[QueenIsabella]

We get monthly paper statements for all accounts. They go to DH--he likes paper, versus electronic, so he can hold it in his hand, highlight, etc. Unfortunately, he stack is over an inch thick--we have a lot of moving parts, financially. All of our retirement accounts, plus the kids' accounts (trusts, Roths, etc.) are with the company. DH boils all the data down to what we call the "Spreadsheet of Phenomenal Cosmic Power".

I will ask DH to go through them and see what came out of his IRA for September. I don't know if he still has the paper for earlier months (maybe--on an unrelated note, our shredder bit the dust a few months ago, getting it replaced has been a bear). That's a good question for Monday's call.

I'm still miffed that the notification came from my regular bank, rather than the financial planner spotting it, but it is what it is.

 

[wabbott]

You may not like my suggested solution, but I'm going to put it out there anyway. There is no one - NO ONE - who is nearly as interested (or invested) in your finances as YOU are. YOU and only YOU (and your husband) have to be totally involved on a daily basis with where it comes from and where it goes, whether your investments are sound, and if any mistakes are made (intentionally or not) by whoever is the temporary steward of the fruits of your labor.

Think of yourself as the "bookkeeper" of Mr. & Mrs. QueenIsabella, Inc. and act accordingly. Make daily checks into your various accounts. That's what a good bookkeeper duties are - know income/outgo so that accurate decisions can be made

Everything's online, so it isn't a time-consuming thing to do. There's not a day that goes by that I don't log on to my bank account or investment accounts to see what's afoot - when checks cleared or if deposits were timely made.

You don't have to go to the extreme of Uncle Scrooge who knew where every coin and bill in his money bin came from, and where every penny was spent.

But it is a lot of peace of mind to know what your daily balance in your checking account is, and what/when income arrives and what the money is spent upon and when.

I even carry my laptop with me on trips, so that I can see what's going on. To me, that's very important in case a credit card gets compromised (that happened to us this summer on a European trip) and you can react accordingly. This could be done on your smartphone or Ipad if a laptop is too cumbersome.

 

[LuvOrlando]

My first thought is scam, if you are missing 5K at a time and needed to look closely to see this I think it is fair to wonder how closely you are watching your actual accounts? Do you know what is there or are you just waiting for the disbursements? There are lots of Madoffs in the world, be careful.

I might get a forensic accountant to poke around on my behalf if it was me, once is a mistake but twice is sketch.

 

[georgina]

I keep a paper register of my (rare) checks and all automatic payments/withdrawals also, but I log into my checking account EVERY morning to see the balance, what has cleared, etc. I do not trust anyone, and wonder why the withdrawal from the IRA is not automatic? Why is the planner's involvement needed at all in that? To me that is unacceptable.

Most of the rest of our money we manage through Vanguard, and I log into those accounts at least weekly also. I have a few online savings accounts that I could quickly move money into my checking account if I needed it. If you stay with the FP I would make sure you have online access directly to all the accounts.

 

[T.G.I.Friday]

I will assume it was an error and not something more nefarious.

But I would be livid at the dismissive response from someone other than the planner and the lack of a sincere apology.

I get weird about things, but that would the the hill I would chose to die on and would be looking for someone else immediately.

 

[mylilnikita]

You need to get rid of him. He apparently is t looking out for your best interest and bottom line.

 

[fla4fun]

The first thing I would do is gather the statements for the accounts involved and track the money to be sure there isn’t money missing. The conversation will be very different if you have funds missing vs. an incorrect amount moving from one account to the other.

I would ask the FP to provide detailed documentation for all money movement, including the taxes, for July, August, and September. Make sure that matches the statements you received directly from the institutions where your money is.

I hope it was just a software glitch that moved the wrong amount of money, and that you aren’t missing any funds. I also hope your taxes were handled properly.

This is a learning experience. You should always balance your checking account statement every month against your check register. Many people don’t do this, but it is your first clue that something has gone wrong, especially if you have automated deposits and withdrawals. I reconcile all my statements to make sure everything ties back and balances each month. It may seem redundant when you have a financial planner working for you, but most FP don’t have the time to reconcile bank and investment accounts for all their clients on a regular basis. Their focus is more on the big picture.

If it turns out to be a mistake or glitch, I would give them the benefit of the doubt and continue using them while reconciling accounts myself. If money is missing, then you will probably want to consider legal action and not working with them again. I hope it is something simple and nothing is missing.

 

[Travel60]

Seconding that YOU are your best internal control. DH downloads all our transactions in all accounts most every day into a Quicken file. He gets "antsy" if we are traveling even though he can still log on and see the transactions. Maybe you don't want to do that every day but at least check accounts once a week or when you know the transfers are supposed to be made.

As mentioned see if the transfer OUT equals the transfer IN - you haven't lost any money. But if $10,000 was taken OUT and only $5,000 transferred in, you may have embezzlement. I'd want some "higher ups" on that call.

 

[dvcgirl67]

I like the "Spreadsheet of Phenomenal Cosmic Power".....my husband is that guy too. He's a math nerd.

I hear what everyone is saying about managing your own funds. We do, but I do know lots of people, some of them quite wealthy who have their entire portfolios under active management. We're 5 years or less out from pulling the trigger on retirement and are learning that the accumulation phase is actually the easy part, if you're diligent savers and investors. The switch over to spending down that nest egg is a lot more complicated when factoring in sequence of returns, tax implications, health care before medicare, medicare, Roth conversations....etc.

I'm an active participant in all of our financial planning discussions, but he's going to take on the nuts and bolts of actually handling the withdrawals whenever we determine what our initial strategy will be. He just purchased two software programs to help us model out different strategies for our own retirement spending. So, I can see why even financially savvy people look for assistance. I'm not sure if we'll do any kind of a check-in with a CFP, but if we do, it will be a fee only planner. I know we'd never go with the AUM route.

People have to go with what they feel works best for them and their lifestyle. My major caveat to using an FP to actually disperse my funds would be any possibility of fraud, which is where my mind went when I read the OP. I'm sure it's likely a mistake, but even that mistake would make me a bit nervous.

 

[QueenIsabella]

I want to thank everyone for your candid responses. It's given me a lot to think about.

DH is attempting to find the applicable monthly statements.

I'm actually the bigger math nerd, but I realized there IS an issue that I need to work on. I have a respectable IRA (that we're not touching right now). DH's is much bigger--no surprise, I've been a SAHM for 28 years, he's always had 401ks that have been rolled over. But the rest of our assets came from his mother--directly, to the kids, and then when she died, DH inherited a lot (kids did, too). So, even though it's our money, jointly, I still don't feel comfortable treating it like it's "my" money, if that makes sense. So, I don't watch it as closely as maybe I should. This is a "me" issue.

I also need to track the checking account more closely. Again, in retrospect, 2023 has been a big "spend" year--3 college tuitions, my brother's funeral (he was indigent, I paid half the final expenses), one thing after another breaking around the house, a vacation and some other travel for DH, etc. We can afford it, but it's just been a lot of money flowing in and out of the checking account, aside from the usual stuff. I need to do better on watching the numbers.

 

[MillauFr]

You may not like my suggested solution, but I'm going to put it out there anyway. There is no one - NO ONE - who is nearly as interested (or invested) in your finances as YOU are. YOU and only YOU (and your husband) have to be totally involved on a daily basis with where it comes from and where it goes, whether your investments are sound, and if any mistakes are made (intentionally or not) by whoever is the temporary steward of the fruits of your labor.

This is the best advice you are going to get on this thread by far. No one is more invested in your personal finances as yourself. Finance professionals like to confuse you and make you think this stuff is rocket science. It isn't. It is easier to figure out how to do this stuff yourself as it is to find a good financial professional. I would dump them and move all of your accounts to Fidelity, Schwab, or Vanguard.

 

[Robbie Cottam]

I will try to keep this short. Figures have been changed for privacy...

Every month, DH and I take a withdrawal from his IRA. Taxes are taken out, and the balance, $10,000, lands in our checking account, around the first of the month.

Last week, my bank sends an email, saying I'm about to overdraw my checking account. I freak out, since my checkbook shows a balance in the thousands (yes, I still use paper checks and a paper balance book thingie--no criticism, please! We just don't like online banking.). I call my financial planner, his team works to get several thousand transferred in to the checking account. No overdraft fees or bounced checks--whew! But, I don't know what happened (massive math error? hackers? spendthrift alter-ego?).

This week, I get my monthly checking statement--I must admit, I don't usually check these closely, but I did this week. It showed that our deposit wasn't $10,000, but $5011.38. I look at the August statement: $10,000 deposit, as expected. July statement: deposit is $5082.97. June and earlier are $10k, as they should be.

I sent an email to our financial planner, who is supposed to be handling this, asking what happened. His underling calls me, says it's "an error, deep in their system, that's been corrected", or something like that. That's all the explanation I get.

The more I think about it, the more questions I have. Like, why July and September, but not August? Was there a problem in August that was corrected? If so, why wasn't there more diligence, and why weren't other months looked at? Why the two different, odd amounts? Were taxes taken out? At what rate? Did this happen to other people? Should we be concerned about other accounts? If it was only us, were we hacked somehow? What are they going to do, moving forward to make sure this doesn't happen again?

We were fortunate in that our bank caught it before it became catastrophic. We're also fortunate that we had other money to pull from, to prevent a catastrophe. Others might not fare so well.

I sent my questions to the planner, he's calling me Monday for a full discussion.

So, my question is, what would you do? Would you still have confidence in your financial planner and his team? What other questions should I ask? Any other thoughts? Thanks for reading.

Personally,
once bitten twice shy….

the planner himself should have called you not his staff,

I think you need to make a list of this questions and any other you come up with between now and then…

he needs to have some direct honest answers for you….

‘’if he tries to discount responsibility I would be done….
if his answers do add up or pass the shift test I would be done….
i you just don’t fell comfortable after the weekend i would be done …

questions to ask;

who, what, when, where, why, and how this happen,

what will be done to prevent this in the future..

what else are they going to do to make this right

my feelings if this was my money is he has lost my trust and respect…

if he doesnt have really good answers we need a parting of the ways

 

[MillauFr]

You need to get rid of him. He apparently is t looking out for your best interest and bottom line.

Don't you mean he is looking out for his own bottom line? Of course he is. Almost all of them do. It is virtually impossible to find a financial planner that puts the customer first.

 

[MillauFr]

what will be done to prevent this in the future..

Isn't the answer to this question obvious? Dump them and take control of your finances.

 

[_19disnA]

I guess my first question would be why you or your husband didn't bother to verify those monthly $10,000 deposits were showing up correctly in your checking account? Don't you periodically compare your manual checkbook balance to what your banks shows online? I also still use paper checks to pay certain bills, but my bank shows all transactions online and you can easily scan for those deposits. Even working with a financial planner, there are still some basic things you should be doing to keep track of your accounts.

I agree with others, depending on how this upcoming phone call goes, you might consider looking for a different company to work with.

 

[Robbie Cottam]

Isn't the answer to this question obvious? Dump them and take control of your finances.

Clearly, not or the op would not be online asking for info….. isn‘t that obvious?