Unethical Excessive Fees on a Dormant IRA
I had a small, uninvested IRA acct with Morgan Stanley’s Chattanooga branch that sat in a basic holding account for years, earning only one or two pennies a month. No service was provided for this account, and I assumed it was simply inactive. Despite that, Morgan Stanley continued charging a $100 annual “service” fee, which quickly eroded the already small balance.
After realizing what was happening and seeing that hundreds of dollars in fees had been deducted—eroding the principal—I called to question the charges and was initially told the fees could not be reimbursed. After filing multiple claims and going through several escalation steps, I was eventually reimbursed. I’m grateful the issue was resolved, but it required a significant amount of time, effort, and persistence on my part.
Investors should be aware that even tiny, inactive, uninvested accounts can still incur large annual fees—and resolving issues like this may take more work than expected.