Trapped with My Broker – Part 2 April 23, 2002February 21, 2017 Yesterday, Bernie said he’d like to leave his broker at Merrill Lynch, but they’ve been friends for 30 years. John Bercini: ‘One possible solution to Bernie’s problem would be Merrill Lynch’s Consults program, in which Bernie could hire Institutional Money Managers to run a series of private accounts (for diversification) all for around a 2% annual fee which includes custody, transactions reporting, everything. I don’t work for Merrill, I do have money in this program and I do work for a money manager, but we are not in Merrill’s program.’ ☞ I appreciate the suggestion but disagree. Two percent is a huge slice of your assets to give up each year. If the stock market can be expected to do maybe 8% a year over the next 20 years (slightly regressing to the mean after 20 phenomenal years), then to pay 2% is to give up 25% of the potential return! Worse, since you probably can’t take the full fee as a tax deduction, if you can take any of it at all. So the 8% you earn might be taxable, while the 2% you pay might not be. Granted, if Merrill can find managers who reliably beat the market by more than the 2% fee, then this begins to get interesting. But why would Merrill be able to do that? Merrill Loser: ‘Bernie’s letter about ML could have been mine, except that my money is in ML Funds, which is worse.’ ☞ I don’t mean to pile on Merrill specifically. These problems are industry-wide. But I’m sure some of you have been reading about New York Attorney General Eliot Spitzer’s action against Merrill for conflicts of interest. Seems this firm, once renowned for its focus on ‘the little guy,’ was leading more than a few little guys down a primrose path. BOTH PARTIES ALIKE? If, for religious or other reasons, you think gay Americans should be denied equal rights, you will probably want to vote Republican. In a forthcoming column, Hastings Wyman compares Republicans and Democrats. He reports that 151 Congressfolk have “perfect” ratings from the bi-partisan Human Rights Campaign – 70% of the Dems and 1.4% of the R’s. Lowering the bar from a 100 rating down to a 67 rating still brought the Republican tally up only to 8%. Meanwhile, 63% of the Republicans got a complete zero on the HRC scorecard, meaning that there was not a single place they sided with gays and lesbians. And in Texas last week, the nine Republican judges who comprise the state’s highest criminal court upheld that state’s sodomy law, under which two men were arrested in 1998 for having sex in the privacy of their own home. The Bible is clear: women should be subservient to men, slaves should obey their masters ‘with fear and trembling,’ nonvirgin brides should be stoned, and intimate relations between people of the same sex is an abomination. What’s complicated about that?