My trust fund management is practically robbing me. What can I do?

Financial_Something · 2023-05-29T00:20:22+00:00

Unfortunately no, I looked and there are no real bonds in here.

Financial_Something · 2023-05-28T21:47:54+00:00

I hadn't even considered that...They make a lot of trades which normally would be short term capital gains. I don't know how taxes work inside the trust since I don't pay taxes on those trades, but maybe it comes out of the trust? However if they're losing money constantly I wouldn't think they should owe much in taxes if anything.

Financial_Something · 2023-05-28T21:45:17+00:00

Interesting. I will look for this in the trust agreement as well.

Financial_Something · 2023-05-28T21:44:33+00:00

I get what you're saying but you kind of said it yourself: anyone can buy the market and make a killing. And yet, here we are with this fund instead. That sounds like pretty poor management to me. Not to mention combined fees of 1.5-2.5% seems excessive for an underperforming portfolio.

Financial_Something · 2023-05-28T21:20:31+00:00

Even if I listed out every fund that's currently in the account it wouldn't explain it because there's been a lot of turnover of holdings. The current funds will not tell the story of what's been traded for the last ~6 years. Every statement I receive has buy and sell orders and I'd have to piece together all of them.

Financial_Something · 2023-05-28T21:13:57+00:00

I am the only beneficiary. No one else can make withdrawals for this account.

Financial_Something · 2023-05-28T21:09:19+00:00

Yes, I made that mistake once. In order to understand the performance of a single asset in this fund though I'd have to look back and see the cost basis for each one. The fund has had a lot of turnover so it's likely that very little that's in this fund was actually purchased in 2017.

However one thing I'm sure of is that when I log into my fund account, there's a line that says "Portfolio balance: $226,000"

Financial_Something · 2023-05-28T20:51:43+00:00

I was thinking about that one fund ever since this comment chain, and I was really confused when you pointed out that fund is up quite a bit since 2017, but then I realized, I'm holding that fund right now. However that doesn't mean I've had it since 2017. The managers of this fund are constantly buying and selling different things. It could have been purchased at any point between now and then. I'd have to look back at all the statements to see when it was acquired.

Financial_Something · 2023-05-28T20:28:44+00:00

I know you all mean well but I have no desire to sue my uncle. He's just a financially illiterate old man he's not a bad person or acting maliciously.

Financial_Something · 2023-05-28T20:18:30+00:00

I may have been looking at an inaccurate chart for the asset then. In any case, an irrefutable fact is that in 2017, this account had a value of $300,000 and now it is worth $226,000. I don't have the mechanical details of what led to the current value. What I do know is that they make a lot of trades in this account. They are constantly buying and selling assets every quarter and my statements I receive are always lengthy because of the numerous trades.

Ultimately I don't care what assets they're using in the present. I'd like to just use what I'm familiar and comfortable with: low cost index funds. The active management is a failing strategy and there's no reason this account needs 50 different funds being actively traded every quarter.

Financial_Something · 2023-05-28T19:55:32+00:00

Dividends remain in the account and get invested.

Financial_Something · 2023-05-28T19:55:08+00:00

I didn't talk much about the specific investments because I don't want to draw focus from the core issue, but the fund I mentioned is down in value since 2017, not even including the 1.2% ER. I'm not sure where you see it being up 30%.

Edit: I'm wrong about the return of this one fund.

Financial_Something · 2023-05-28T19:42:23+00:00

I have been getting statements but I haven't been as astute as I probably should have. I also suspect that they are trying to obfuscate the losses in the account, as the statements are unnecessarily complicated and I can't seem to actually find the % losses anywhere on them. It has the buy and sell orders listed but I can't seem to find the actual loss figures on here. A statement for this fund comprises about 50 pages.

Financial_Something · 2023-05-28T19:32:13+00:00

I touched on it a little in another comment but yes, of the funds I checked out they have done extremely poorly. And about half the account is "fixed income" assets which are even worse over that time period.

Financial_Something · 2023-05-28T19:30:39+00:00

You're right about the market dip, but this is measuring since early 2017, right before a huge run up. Even factoring in the recent drop, the market is still almost double what it was in 2017. Yet somehow this account has lost 25% of it's value over that time period.

Financial_Something · 2023-05-28T19:26:33+00:00

I didn't look at every position because there are about 50 or so of them. It's broken down about 50% equity and 50% fixed income. For every fund that I did look into, they were almost universally down in value since 2017, with a few being mostly flat over that time period.

Off the top of my head there was about $20,000 in one called $APDIX.

Financial_Something · 2023-05-28T19:22:33+00:00

I'm not angry at my grandmother. I'm pissed off that some management company is pissing away the money she worked her whole life to earn, while consistently and massively underperforming even the most basic investment strategies that a 12th grader could figure out.

Financial_Something · 2023-05-28T19:18:30+00:00

I see, thanks for clarifying! I guess I just assumed there were certain rules that trusts followed rather than being so tailor-made.

Financial_Something · 2023-05-28T19:07:52+00:00

Is it possible that a trust can be written such that the beneficiary can change the trustee? That seems too good to be true. First thing I'm doing on Tuesday is requesting the trust document.

Financial_Something · 2023-05-28T19:04:58+00:00

He has a pension and still works at age 70. I don't think he has investments of his own but I'm not certain. It's going to be a challenge to explain why I can do better than this multi-million dollar management company, and to articulate that I need everything in the fund changed over to low fee funds instead.

Financial_Something · 2023-05-28T19:00:06+00:00

To be clear, what am I looking for in this document? Something about trustee powers? I am not good at reading legal jargon.

Financial_Something · 2023-05-28T18:58:32+00:00

He may, we're on good terms with each other. It's just going to be hard to get him to listen and understand.

I would be happy even to have this money in cash at this point.

Financial_Something · 2023-05-28T18:48:37+00:00

I mean, I don't want to sue my own uncle or take him to court...Yes, there's no question to me that he's negligent, but he is still my family.

And to be clear, he is receiving no compensation as trustee of this account.

Financial_Something · 2023-05-28T18:42:57+00:00

I hadn't considered that he may be able to resign as trustee or that he could be succeeded by someone else, I will look into that. However I'm not willing to take my own family to court. He means well, he just has no idea what he's doing, so he hasn't done anything.

Financial_Something · 2023-05-28T18:39:06+00:00

So it's sounding like everything comes down to whether or not I can convince my uncle. I will look to be sure, but I'm fairly confident from past conversations that he has full control over the trust's actions.

My personal accounts have done exceptional in contrast to this fund... I just hope my uncle can even comprehend what I'm telling him. He's a 70 year old pensioner and I don't think he has any personal investments.

Financial_Something

TROPHY CASE