Mercer Advisors

I nurtured a portfolio up to just over $2 million by June, 2016. I was still working at the time, and I did not want to deal with the portfolio day-to-day. In addition, I was 75% in stocks and 25% in cash, and I felt that I needed more balance. Not having owned any bonds, I figured it was time to hand it over to a management firm. I was in good stuff when I handed it over: Berkshire, Nike, Starbucks, Apple, Disney, Altria, SPY, Costco, AT&T, etc. Fast forward to today and the portfolio is now at 2.38 million, in part because I still put in additional money for the SEP IRA for several years. They have me in “institutional class mutual funds” and bond funds that have underperformed the entire time. If I had managed my original portfolio, I would have done much better; SPY was $211 (now $453); Apple was $98.63 (now $161.28); Starbucks was $55.59 (now $111.05); Disney was $98.78 (now $146.22); Costco was $152.24 (now $528.93). Fortunately, I wouldn’t let them sell my Berkshire and Nike otherwise I would have done even worse. My advisor hasn’t contacted me in months. I am so done with this company. To top things off, I put in a request for my advisor to sell everything except the Berkshire and Nike and put it all in cash in anticipation of transferring over to Schwab to run the portfolio myself, and it is 3 days later and that task hasn’t been completed. Never again……

Terrible service and performance. Luckily I pulled 75% of my money out several years ago. How about putting in roughly 95k with them 24 years ago and now it’s worth a whole 112k. If I put it in the s&p and left it there it would be worth 500k in that time period. Even half the performance would be 250k. They suck fees out of you and your money sits and does nothing. My set managed money has nearly doubled in just a few years and no fees. What a waste. Glad to be rid of those blood suckers!

I’ll start by saying that they put on a good show and sold me by saying that their strategy mirrored an S&P 500 fund with slight modifications. These mods, which weighted the stocks in their portfolio to ones with a lower beta, were supposed to give me a 1-2 % greater total return as compared to a plain S&P 500 fund. So about 8 months ago I invested about 1.4 million with them. At the same time, so I could compare, I opened a small position in a S&P 500 fund. And after watching their relatively dismal performance for the last 8 months, I finally called it quits. In that period, they managed to lose 6% more than I would have lost if I would’ve just kept my money in a free, unmanaged, S&P 500 fund. If you do the math, it comes to a little over $83,000! Great job Mercer! 🤬

In 1990 the business I worked for closed down. They set up my pension with this company. I left it in there 27 years in hopes it would grow larger for my retirement. Now I want to pull my money out and they are telling me I can’t until I am 65 because my pension is over 10,000. There is nothing on their website stating this. I thought about pulling a lump sum of 9,400 dollars out in October but was undecided and left it. I was told at that time the money usually draws 5 percent interest. At this time it should be under 10,000. When I called them today I was told I can’t get the money in a lump sum but I can start drawing 53.00 a month. Then I called the same day and was told I had to wait 10 more years. This company keeps changing its guidelines. Now it says on its website that if interest rates go up my pension will go down. I feel like they are trying to keep my money after having it all these years.

Communication is terrible - after spending 6 hours clearly delineating expense, and the cash requirements of each account - they invested 99% of each account and very near top of market, when I called them on it - Igot a minor admission that their traders had gotten a bit aggressive. I couldn't pay my bills and of course the market turned down the very next day.Their timing is terrible, the y don't listen and basically ignore everything and just do what they want.
When I finally requested their services terminated - they liquidated everything just as the indexes hit the 50 EMA on the monthly and bounced - not sure why they liquidated everything, they certainly didn't communicate they were going to close all the positions and frankly the liquidation occured after I terminated their services - not sure how they got away with that - but thanks Mercer - just when I was looking to buy - you sold everything locking in a 70K loss and tied up all the cash in clearing so I couldn't buy when I wanted to either.

Look elsewhere - unless you're willing to buy anywhere and hold forever Mercer will destroy your net worth

Summary – The initial sales pitch sounded great, but broken trust and poor communications lead to a very quick end to our relationship.

Being new to advisors we had thought that a personal financial advisor was supposed to walk you through investments and fees. Investment research told us to expect a general portfolio along the lines of 90/10 or 70/30 stocks/stable value. This much we could get from the internet, but we were looking for a little more advice and education. We already had a brokerage account with Scottrade we have been very happy with, so we were pleased to accept their recommendation of Mercer Advisors.

After the initial interviews with Mercer, things looked very promising. We are in our mid 30’s and we had a few goals in mind. The advisor listened to our goals and explained how they would create a road map to help us achieve them. Mercer also said they were willing to assist us with our tax questions and general financial advice. Their management fee was in the reasonable range at 1.1% plus the cost of the trades within Scottrade, where all of our accounts would be established. We were very clear to ask several times that this fee was all-inclusive, including all fund management fees. Mercer indicated that this was the case and highlighted that in their 30+ years they had developed very good relationships with various companies, so they would be able to get us into funds not normally accessible. We discussed with them that we were nervous and would need hand holding through the process, including explanations on the portfolio and movement of money.

We were still a bit skeptical that the fee of 1.1% would include all fund management fees charged by various funds, but Mercer repeatedly assured us that they had relationships with these companies. We checked with Scottrade and some friends, and learned that indeed there are multiple ways to have mutual fund fees included in the total advisor fee. For example, if the fund was a Class Z, then it is possible there is no fee on the fund, or some financial advisors simply pay the mutual fund fees from their received management fee so the investor only pays the management fee in total. That calmed us down a bit. (A different Scottrade person later said this is not how class Z works, but we were just looking for anecdotal evidence to make us feel better about what was happening at the time.)

Prior to our investment strategy meeting, we were surprised to find that Mercer had already moved the money out of our old accounts into the new Scottrade accounts. We thought we had been clear that they were to discuss this move with us, but they apologized for the miscommunication and promised we wouldn’t have a problem in the future.

Moving into the strategy meeting, Mercer shared their road map for us to retirement and beyond. After discussing that we wanted to be a bit more aggressive than their suggested 80/20 stock/bond split, they agreed it wouldn’t significant increase our risks and we all agreed to an 85/15 portfolio. We confirmed we wanted to have all fees billed to us separately, and again we requested Mercer talk with us about the funds before the initial investment so we could understand how these funds honored our plans. They also offered to look at our 401k to give advice even though it was not under their management. All of the general layout looked good as far as the plan and Mercer was looking at the total picture (pension, SS, lifestyle planning, long term care etc.), just as we were looking for. We were off to the races!

Just a few days later, with no further communication from Mercer, we were stunned to find that all of our old funds had been sold and new funds had been purchased. At $17 per trade to sell all of our old mutual funds and purchase the new ones, they had just spent a considerable amount of money to reallocate our funds into assets we weren’t sure about, with no clear understanding about if or how it would fulfill our investment strategy. We contacted Mercer immediately and they again apologized for not discussing the funds before investing. We were upset, but chalked it up to another miscommunication. We had a few other questions to go over with them, and set up a full review meeting for a few weeks later to see how the portfolio was progressing.

We wanted to become a bit familiar with our new funds before our review meeting with Mercer. Thankfully, Scottrade is excellent at showing quick information on funds to give us a basic understanding. The funds had fees between 0.18% and 1.26% and were spread amongst various companies. One fund was a shocking 6.07%, though further research showed it was under some sort of SEC waiver to force it to 0.7% until March 2016. Some of these fees seemed troublingly high, but we were certain that Mercer must be subtracting these fund fees from their fee to give us the “complete package” fee we talked about at 1.1%, and we figured we would discuss this at the upcoming meeting.

The next meeting started off very well. Both the initial advisor and our direct portfolio manager were on the phone at this call. Mercer operates with a group making investment choices, but you still have a main point of contact. We went through all of the general open actions, such as completing estate planning paperwork to get to the attorney down the road and making sure that the pension calculations from the company included spousal payout.

We then asked about the fees on the various funds in our portfolio. The initial advisor was in the car and could not pull up the account, and was unable to understand any specific questions we had. We did our best to ask about the fees by using an example of one fund in the portfolio, but when that didn’t work we asked just a general overall look at the portfolio with:

If they invested $100 of our money in one of our new funds for one year, what is the break down? Do we just pay $1.10 to Mercer in total? Or do we pay $1.10 to Mercer and additionally $1.26 to fund X and $0.18 to fun Y? Or was there some other distribution we didn’t yet understand?

Unable or unwilling to adequately answer that question, we queried about why any fund in the portfolio would be as high as 6.07% or 1.26%. The initial advisor just continued to tell us these were great funds with no load and that they were the best in their class and their relationships allowed us to gain access to these wonderful funds. The portfolio manager did not say a word.

At this point we halted the sales pitch, as Mercer was steadfastly refusing to answer the question we were asking. We reiterated our clear understanding that everything was wrapped up in the 1.1% fee, and insisted they send us a written fee breakdown for our portfolio by close of business the next day explaining exactly what we would be paying.

The following day we received an email with just a few lines of some acronyms we didn’t understand and some fee percentages. We left a polite voicemail trying to clarify exactly what we wanted, and asked again for the breakdown for the portfolio instead of the one fund. It seemed pretty clear at this point that despite insisting that their 1.1% fee was all we would ever pay, this was hardly the case.

The day after that we received a call from Mercer that they were no longer interested in doing business with us. It was fairly clear that the relationship was broken at this point and we had no trust in them, but a tiny part of us kept wondering if there was just something little we were missing, as there was no way they had misheard all of our requests and questions over and over. Within the next few days they relinquished control of our accounts and we began working with Scottrade to get everything back on track.

We were hoping Mercer Advisors would help guide our investments for years to come, but they apparently weren’t really listening to what we wanted after all. In the end they were just going to do whatever they wanted to do with our money without actually advising us at all. Unacceptable.