Home Money Caring for Aging Parents, With an Eye on the Broker Handling Their...

Caring for Aging Parents, With an Eye on the Broker Handling Their Savings

27
0

Tracey Dewart faced a daunting task last summer: moving her 84-year-old mother, Aerielle, from her Manhattan apartment to an assisted living facility in Brooklyn. Her mother, who has Alzheimer’s, didn’t want to go, but there was little choice after she was found wandering near her home on the Upper East Side several times.

It was “physically and emotionally a horrible and overwhelming time,” said Ms. Dewart, 58. “It felt like there had been a death in the family as we had to sort through all of my parents’ belongings.”

And she was about to confront another ordeal — one that could serve as a cautionary tale for anyone who helps manage their parents’ money and, more broadly, anyone who does business with an investment broker.

To help pay for her mother’s care, Ms. Dewart relied on an investment account at J.P. Morgan Securities that her 89-year-old father, Gordon, opened at least eight years ago. The account was already paying expenses for Ms. Dewart’s father — who, after two strokes, was living in the residence that his wife was moving to — and for Ms. Dewart’s younger sister, who lives in a community for adults with developmental disabilities.

Around the time of her mother’s move, Ms. Dewart noticed what looked like unusual activity in the account, which she and her older sister had overseen for about four years. A closer look revealed that it was down $100,000 in a month.

“My own accounts were rallying, so I thought this was strange,” she said.

She notified the firm that something seemed awry. As someone who does research and policy analysis for a living, she also put her own skills to work.

She pored over piles of statements and trade confirmations, built spreadsheets and traded phone calls and emails with the broker who handled the account, Trevor Rahn, his manager and the manager’s manager. She hired a lawyer and worked with a forensic consultant.

After about six months, she learned that the account, worth roughly $1.3 million at the start of 2017, had been charged $128,000 in commissions that year — nearly 10 percent of its value, and about 10 times what many financial planners would charge to manage accounts that size.

In August 2017 alone, Mr. Rahn had sold two-thirds of the portfolio, or about $822,000, and then reinvested most of the proceeds, yielding about $47,600 in commissions, according to monthly financial statements and an analysis by Genesis Forensic Consulting, the firm Ms. Dewart’s lawyer hired.

LEAVE A REPLY

Please enter your comment!
Please enter your name here