Guest Post: Even the Inflation Adjusted Prices of Monkeys is Going Up

AGXIIK on his war with Fidelity and why he is closing his account and converting to Phyzz.

Even the Inflation Adjusted Prices of Monkeys is Going Up

I can understand that the inflation adjusted prices of monkeys is going up, but for 2011, Fidelity charged $203,582,000 on the income of $419,797,000 million (that's 48.5% of the income on ALL OF CLIENTS' ASSETS!!). Office help needs to be paid, you know. Then things really got interesting.
There was another management fee coming to $229,926,000 for the transfer agent, which just happens to be JP Morgan.  I expected that this was for Jamie Dimon's bonus. And more monkeys, and maybe a few gorillas and an orang or two.
So combing through the prospectus, I found that the total cost to run this show was $440,546,000. Fidelity makes $203,582,000. JPM makes $229,926,000 and we shareholders made $17,176,000. A bounteous and munificent .01% on our capital.
I got a statement on my account. I made $13 last year. I went to McDonalds and got a Happy Meal for me and my wife to celebrate.


I have declared a bit of a war against Fidelity recently.
My first salvo was a request that the active trader desk reduce my foreign exchange fee to .25% from 1%. My argument was based on a 30 year relationship that has no doubt benefited them quite well. Besides which, how much brain power does it take for a monkey in the backroom to push a button shipping my funds south from my Fidelity account in Canada, after a brief loop through JPMorgan, and into my Fidelity account in the US? Even well trained monkeys can't cost that much. It took my 'active trader' rep, an oxymoron if there ever was one, 30 minutes to get me the answer that Fidelity is going to whack me 1%.
So after my rant with him, I asked to be moved up to his supervisor. Same tune; different tone. 1%. "Because we are really smart and well trained and, and, and monkeys don't come cheap", he said.  So I hung up on him after an hour of listening to his BS.
My local banker accomplished the transfer for $15 and about a currency transaction cost of about .10%, a cost I couldn't even see since the Canadian dollar was dropping last Thursday. So for all intents and purposes there was virtually no cost to me
I thought I was maybe done with Fidelity but NO, I just got my Shareholder update for the quarter announcing how much we Cash reserve money market holders receive on an annual basis. After checking the names of the firms that Fidelity has invested in including RBS, Soc Gen and Deutsch Bank, along with some of our local zombie banks like Citi etc I noted that the gross revenues on the asset base of $119,541,191,000 was $419,797,000.
Ok, they earned about nearly $420 million.
Then I dug down a bit. .37% return on the nearly $120 billion in assets. Well under 1%.  Actually closer to 1/3 of 1%.  Now don't let it be said that I am sniffing at .37% return on capital. In the world of ZIRP, making anything is a good deal, sort of.  In an inflation environment of 10%, I'm only going backwards by 9.63%.

But there were the inevitable footnotes.
Gotta love the footnotes.
I can understand that the inflation adjusted prices of monkeys is going up, but for 2011, Fidelity charged $203,582,000 on the income of $419,797,000 million (that's 48.5% of the income on ALL OF CLIENTS' ASSETS!!). Office help needs to be paid, you know. Then things really got interesting.
There was another management fee coming to $229,926,000 for the transfer agent, which just happens to be JP Morgan.  I expected that this was for Jamie Dimon's bonus. And more monkeys, and maybe a few gorillas and an orang or two.
So combing through the prospectus, I found that the total cost to run this show was $440,546,000. Even for a math deficient person like me, it seemed like the cost of doing business was more than the income. So someone must have gotten nice and realized that if the shareholders like me got a negative return, we might complain, if only just a little bit.

Fidelity's Abigail Johnson

So Abigail Johnson, of the Fidelity Johnson Family, gave us poor schlubs a little discount. They reduced the fees by $37,925,000. Real nice of you Abigail, and there's even a picture of you in the prospectus. I have to admit, you are kind of cute even with the glasses. But girl, there is no way you are worth $203,583,000. If I wanted to get a girl friend I would just call Elliott Spizter- He gets them for only $4,000 a night.
Long story is this. Fidelity makes $203,582,000. JPM makes $229,926,000 and we shareholders made $17,176,000. A bounteous and munificent .01% on our capital.
I got a statement on my account. I made $13 last year. I went to McDonalds and got a Happy Meal for me and my wife to celebrate.
And after that, I cashed in 1/3 of my IRA into phyzz and am transferring my entire account relationship to the bank that offered me the ZERO cost on my funds transfer.
Moral of the story. Don't trust women wearing glasses? Who knows, but this is a hell of a scam.
Adios Fidelity and don't let the door hit you in the butt.
PS Just kidding about the girl friend.
My wife's much cuter.