Ameriprise Financial Inc. next year will begin imposing annual fees of up to $80 on the brokerage accounts of many of its wealthy customers — a move likely to irk the firm's advisers and registered representatives.
Starting Jan. 1, Ameriprise will hit clients with between $100,000 and $500,000 in their brokerage accounts with fees of $40 to $80 per year. The fees are capped at $200 per household.
While the new fees may seem minor, observers predict that many advisers — already worried about alienating clients in a perilous market cycle — will choose to pay the fee on behalf of their most-valued customers.
“I find this a little surprising and I can't imagine advisers are all that happy about it,” said Sean Cunniff, research director at The Tower Group Inc., who agreed brokers will likely eat the fees, especially for their best clients.
“In my experience, account fees are not that common,” he said, noting that brokerage firms often charge fees only for retirement accounts due to their high administration costs.
The new fee reflects “fair pricing for the value delivered,” said Sarah McKenzie, senior vice president of brokerage and managed products at Ameriprise.
Another Ameriprise official said the firm had reviewed its fees and found them to be below the average of what was being charged by other firms in the securities business. The official noted that only certain fees are increasing and that the impact will be minimal for the average client.
The new move follows Morgan Stanley Smith Barney LLC's decision in April to begin charging a $35 fee on brokerage accounts, but only for households that hold less than $25,000 in accounts.
Ameriprise's new fees will affect the clients of the firm's 7,590 franchisee advisers and the 2,196 employee reps. The 1,898 independent reps and advisers with Securities America Inc. will not be affected.
Clients with less than $100,000 in an Ameriprise brokerage account will continue to pay a brokerage fee of $40 per year. Clients with more than $500,000 will not see any new fees.
