Hi I'm 22 also and consequently have no advice, but just wanted to ask if you are sure the AAB waives the low balance fee? I thought that the AAB just waived the initial minimum investment and that all funds below 5000 got charged 10 bucks in August. I could be wrong but this would be great as I was delaying some purchases until after the date had passed....

thanks for the thoughts hetty.

i guess i'm looking at investing in a variety of stock funds simply because i'm investing in purely stocks (spreading it out amongst various markets large and small would diversify it to an extent).  from what i've read an agressive approach with a long time horizon calls for 100% stocks.  while i was bored at work today i drew up something that does include what you reference in your second comment.

growth 2*, new asia 2*, new horizons 1.5*, equity income 1.5* (each 3 times a year)

latin america 1*, em europe & med. 1*, retirement 2050 1*, int'l discovery 1* (2x a year)

although it's eight funds, i'm pumping more money more often into a domestic and foreign blue-chip fund (growth,new asia) and a domestic value fund (equity income), which serves as a solid base for the portfolio.  i'm gaining exposure to other markets w/ great potential with other 3 foreign funds, with the risk of those tempered by a simple retirement fund. 

do you think this approach accounts for the substantial risk i'm taking by investing in purely stock funds? i'd like to think that the equity income and the retirement fund make this allocation a suitable one for my willingness to deal with the risk exposure and considerable time horizon.

thanks also for the welcoming attitude, it can be rather intimidating talking to the seasoned vets of investing when you're naive and playing with chump change, haha.

I've called trowe up already and have confirmed that the below-minimum account fee is waived for AAB investors.  I could double-check, but I initially called because someone i had already talked with voiced the same concern about the august transactions.

Welcome to the forum, tin8shusd.  You are off to a flying start by providing a useful piece of information about low balance fees in your very first post.

That means you get a cherry atop each one of the non-fattening, non-allergenic, scrumptious cookies that are your "Welcome" present.  Do you have a favorite?

Lorna 

"I've called trowe up already and have confirmed that the below-minimum account fee is waived for AAB investors.  I could double-check, but I initially called because someone i had already talked with voiced the same concern about the august transactions."

Depending on your circumstances, you might still be charged a fee. If your funds are in an IRA, there's a $10 annual "fiduciary fee" for each fund in which you have less than $5,000. (These fees are waived if your total account is over $50,000.)

T. Rowe Price apparently believes this fiduciary fee is something other than a small account fee. Thus, if you asked about a "small account fee," they might not tell you about the fiduciary fee. If you're holding your funds in an IRA, I urge you to contact T. Rowe Price and specifically ask about the fiduciary fee. This is also sometimes referred to as a "custodial fee," so it wouldn't hurt to use both these terms when you inquire.

If you find that you'll be charged for each fund you hold—assuming they're all under $5,000—you might very pointedly ask why you weren't informed of this when you opened your account. Unfortunately, this might not do any good. T. Rowe Price does notify investors of this fee, though not in a way that I find sufficiently transparent and understandable.

Let us know how this turns out.

Regal 56:

.......T. Rowe Price does notify investors of this fee, though not in a way that I find sufficiently transparent and understandable..........

Howdy Regal,

I have to take issue with this just a tad.  The IRA disclosure (you know the document that one must state they read prior to opening an account) clearly states the existence of this fee.  It is completely transparent and totally understandable.  They even use a strange concept of a Table of Contents with one of the sections labeled "FEES", where this info could be found for anyone who desires to learn about such things.

I could cut and paste it here, but it may be good for some folks to go looking for it :o)

I mean c'mon, fees are one thing that all investors should be looking for in regard to any investment one is considering.  There are a few documents to find this stuff and table of contents make it easy.  Ofcourse, everyone is not going to sit down and read all this stuff, but atleast look for the fee info and dont cry foul after the fact.

I agree with other poster, I would make that phone call again and confirm.  You can always start consolidated to avoid fees and branch out when you gain assets.

Dont forget that $10 is 1% on a $1k balance.  That is $10 that is not going to compound for you over your loooooong time horizon.

These fees can also be prepaid with outside money so one does not "lose" tax deferred space to fees. 

Good luck to everyone, especially our young new investor!  Your gonna do fine, just keep yearning and learning, and reading the fine print!

Lorna, Pecan Sandies please, or am I exempt?  I will also need some Happy Cafe for dunking, Hetty!

Git-R-Done! 

Brian

 

Brian,  Of course you are not exempt. 

For the sake of your arteries, it might be a good thing that the Pecan Sandies will be virtual cookies.  My 50's era recipe calls for loads of butter!  They just melted in one's mouth.  I'll even press a pecan half into the center of each cookie. 

I'll have to admit that I have sometimes been guilty of not reading all of the fund information that I need to know.  If this thread pins down the details on when certain fees are charged (and when they are not) it will be a real service to the forum.

Cheerio!  Lorna 

 

Coincidentally enough, Brian et al, I'm just about to wander to the Royal Kitchen and brew up some Happy Coffee before I begin my afternoon online curses, er, courses session.  Plenty for TRPeepz, vets and newbs alike, as we fasten our seatbelts for the bumpy rides then ask ourselves the serious question, "Regular or decaff?"

LORNAX, among my inheritances from me mum are some 1950's cookbooks.  I've often wondered why today's cookies just don't taste like those back in the day?  No doubt about it:  'twas that magic vat of butter that went into the classics!  Yet, you rarely, if ever, saw seriously overweight kids in that era.  Maybe it was because after we ate those cookies, we were shooed outdoors to go yell, scream, and run around with wild abandon?

;)

HETTX

 I completely understand that many people dont dig deep into the documentation to gather information.  In some ways I dont blame them, the documents arent very exciting.  I have learned well how to scan these documents to find certain information.  I do trust most of us DO however look at our quarterly statements in much more detail than a prospectus, custodial agreement or SAI.

Just got my quarterly TRP statement.  Low and behold the last page with the investments slips on it explains all about this fee in easy to understand verbage and how one can pay in advance.

Now if thats not transparent and understandable...............

Not to beat a dead horse, but when I got my statement today, I thought of you Regal.

Hope everyone is doing well.

Brian

hurleyhuckster wrote:

"I have to take issue with this just a tad. The IRA disclosure (you know the document that one must state they read prior to opening an account) clearly states the existence of this fee.  It is completely transparent and totally understandable. They even use a strange concept of a Table of Contents with one of the sections labeled "FEES", where this info could be found for anyone who desires to learn about such things."

Before I signed up with T. Rowe Price, I read the fund prospectus from cover to cover. Here's the closest it came to disclosing the IRA fiduciary or custodial fee:

Because of the disproportionately high costs of servicing accounts with low balances, a $10 fee, paid to T. Rowe Price Services, the funds’ transfer agent, will be deducted automatically from nonretirement accounts with balances falling below a minimum amount. The valuation of accounts and the deduction are expected to take place during the last five business days of September. The fee will be deducted from accounts with balances below $2,000, except for UGMA/UTMA accounts, for which the minimum is $500. The fee will be waived for any investor whose T. Rowe Price mutual fund accounts total $25,000 or more. Accounts employing automatic investing (e.g., payroll deduction, automatic purchase from a bank account, etc.) are also exempt from the charge. The fee does not apply to IRAs and other retirement plan accounts that utilize a prototype plan sponsored by T. Rowe Price, but a separate custodial or administrative fee may apply to such accounts. (May 1, 2008 Prospectus, Capital Appreciation Fund, p. 22)

The last sentence is anything but clear. What, for example, does T. Rowe Price mean by saying a fee "may apply"? Are they saying they don't know whether or not the fee will be charged? Well if they don't know, then how is an investor supposed to know?

Bear in mind also that T. Rowe Price is constantly touted in the media as a fund company that doesn't charge small account fees if one signs up for Automatic Asset Builder. So it's not unreasonable for a new investor to conclude that no small account fees means exactly that: no small account fees.

Also, before signing up, I specifically asked a T. Rowe Price representative if I would be charged a small account fee if I signed up for Automatic Asset Builder. I was told that I wouldn't. There was no mention of any IRA fiduciary or custodial fee, even though I made it clear that I was planning to open an IRA.

You're correct that this fee is clearly stated in the online IRA Disclosure Agreement. This wasn't, however, included in any of the literature I received from T. Rowe Price prior to opening my account. I assumed—wrongly, as it turned out—that all fees would be clearly stated in the literature I'd requested prior to opening an account. Considering also that I'd specifically asked a customer representative about small account fees, I assumed I was well informed on this issue.

The fact remains that a new investor might reasonably be led to believe that there are no small account fees when signing up for Automatic Asset Builder. T. Rowe Price itself contributes to this confusion by failing to recognize that, by any reasonable standard, the fiduciary or custodial fee is a small account fee. (It is, after all, waived if one holds more than $5,000 in each individual fund, or one's account totals over $50,000)

One might argue that new investors who fail to find out about this fee are simply not exercising due diligence. I would reply that T. Rowe Price could easily eliminate the potential for confusion by clearly disclosing this fee in every fund prospectus, and training its representatives to clearly disclose this fee to anyone who's opening an IRA. Since questions about this fee have come up many times on this and other forums, it's clear that others besides me have been confused about it.

Businesses that value customer service should have this attitude: when confusion on a particular issue becomes chronic, then the fault lies with the manner in which the issue is disclosed to the customer. Rather than blaming the customer, the business should look to itself. That's just good business.