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Customer Service? Tales from the Front Lines

We asked for your horror stories. Here they are.

Forget about the small fries.

When I asked readers to tell me which fund companies have the worst customer service, the large fund companies were the ones that received the most complaints.

Here are a few readers' horror stories:

We'll Call You

"My old 401(k), sponsored by the company where I used to work, went through a big restructuring and decided to use

T. Rowe Price,

" writes

John Pence

. "No problem, I thought. So, I'm on the phone with a T. Rowe rep. He convinces me to roll the money into an IRA and says he'll call me in a few weeks to talk about which one. Sure, I say. I'll avoid the tax hit of cashing out, and I probably was going to invest in an IRA anyhow."

"Two weeks later, I get a check, a lump-sum payout with a huge tax chunk lopped off, and jerko never called. Well, my loved ones had a merry Christmas because Johnny had plenty of cash."


"I nominate


for worst customer service. I work in a broker-dealer, and I have multiple funds with Putnam. Every single account I have opened with them, except one, has caused me grief," says

Frederique Sol


"The latest screw-up was when I wanted to open a SIMPLE IRA at work for myself. I called twice and spoke to a rep about sending me the application and necessary paperwork. I received a regular IRA application twice and finally told someone in my office that Putnam just couldn't get it straight. Well, it turned out that Putnam did not offer SIMPLE IRA plans. The rep thought I meant simple

as in regular when I was talking about the very specific IRA plan offered to small companies."

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TheStreet Recommends

Bad News? What Bad News?

"Why are shareholders the last to know about bad news at their funds?" asks

Edward Cheng

in a note to our columnist,

Brenda Buttner

. Cheng recalls three instances when fund companies failed to notify him in a timely manner of major changes, such as manager departures and a liquidation. "Suffice it to say that there were many other instances where shareholders were kept in the dark, particularly when there was a manager change. ... I am getting bombarded with all these timely but useless performance updates, but never the important ones. Are they trying to save postage or face? Does it cost money to post important news on their Web sites?"

Richard Lisk

sums it up quite nicely: "The funds are here to stay, so let's lay on them to improve their response."

I am still anxious to hear more customer-service nightmares from other readers. Please email me at

and include your full name.

Bad Idea

In my column that ran on New Year's Eve, I compiled a list of financial resolutions for 1999. One of them, titled "Stop Putting Money in a Losing Fund," drew some fire from a couple of readers.

It's Executive Editor Jamie Heller's resolution to stop making automatic contributions to


FBR Small Cap Financial, after the fund had a particularly bad 1998, posting a negative 13.6% return.

"I found your article very informative. However, I must disagree with one particular subject," writes

Zach Thornton

. "The fund in question is a small-cap fund, and everyone knows that small-cap stocks have been out of favor in recent years. A small-cap fund 'in the red' should be a disappointment to investors but should not come as a surprise. Considering the fact that many small-cap funds will be in the red, I think that a better way to judge a fund is how it is performing relative to its peers. I think the investor that was mentioned is bailing out of her fund for the wrong reason."

"Assuming for the sake of argument that readers took this to heart and began to end the practice of regularly investing in this asset class, where would the money go?" asks

Dan McConlogue

. In this day and age, probably into some sort of




type of fund. So the advice that has been given is to abandon asset class allocations (in this case, small-cap) when the asset class doesn't outperform other asset classes? Very bad idea. One year, heck three years, does not a portfolio make."

Heller's response: "


readers have more willpower than I do. Perhaps I am simply not a rational economic actor. I took a good chunk of my wedding money and put it into that fund about a year ago, and now it's worth less than it was. I haven't taken that money out, but I just don't want to put any more in."

Send your questions to and please include your full name.

TSC Fund Forum aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.