Citi Smith Barney incompetence

By | November 14, 2008

November 14, 2008

Branch Manager
Chase Group
2775 Sand Hill Road, Suite 120
Menlo Park, CA 94025

To whom it may concern:

I am writing to complain about Citi Smith Barney’s poor service, incompetence, gouging me out of a bogus $95 fee, and then trying to snow me into believing that it wasn’t your fault.

I recently decided to transfer my shares of Cisco Systems, Inc., acquired through various options and stock purchase plans when I was a Cisco employee, from the two different Citi Smith Barney accounts in which they were being held, account numbers XXX-XXXXX and XXX-XXXXX, into my Vanguard brokerage account.

I called you about this and you emailed me a stock transfer form. I asked on the phone when requesting the form if there would be a fee for the transfer, and I was told there would not.

Unfortunately, the form which you emailed to me was completely incomprehensible. It demanded a “company name” without explaining what that meant; had a blank for “SS #, Global ID # or PUID #” without explaining what the latter two terms meant and without any blank for what I thought I should be specifying, i.e., my account number; asked for a “3-Digit Company #” without telling me where I could find it; and demanded that I provide the “4 Digit DTC #” for the target account, without telling what that was or how I could get it.

I contacted Vanguard to ask for their help, and they pointed me at a form on their Web site which I could use to initiate the transfer through them rather than through Citi Smith Barney. Their form was accompanied by extensive documentation and it was perfectly clear how to fill it out, and so I decided to do the transfer that way.

Strike 1: Incomprehensible Citi Smith Barney form with no documentation compared to well-documented, clear form from Vanguard.

I filled out two vanguard forms, one for each Citi Smith Barney account. On both forms, I specified that all assets in the account should be transferred from Citi Smith Barney to Vanguard. Imagine my surprise, then, when I discovered today that 340 shares of stock were left behind in account XXX-XXXXX!

I called you today to find out why, and I was told that those 340 shares were part of an ESPP and therefore weren’t actually associated with account XXX-XXXXX, but rather were associated with my social security number. That’s just absurd. If they weren’t part of that account, then why were they printed on the statement for that account and included in the statement’s account value table?

Strike 2: Apparently my Citi Smith Barney statements doesn’t actually mean what it says and attempts to manipulate the shares in my account don’t do what any reasonable person would expect them to do.

It gets worse. When I looked at my Vanguard statement after the transfer, I discovered a mysterious $95 fee. I called Vanguard for an explanation, and they said that Citi Smith Barney had charged me the fee to transfer the shares, and Vanguard had paid the fee on my behalf and therefore I needed to reimburse Vanguard for it.

Let me say again that I was told by Citi Smith Barney before I transferred the shares that there would be no fee for the transfer.

When I called today to ask about the 340 shares, I also asked where this fee came from. I got a call back later in the day and was given some completely incomprehensible story about how I had asked Vanguard to set up a “sweep relationship” between my Citi Smith Barney account and my Vanguard Account, and that the fee was “charged by Vanguard for setting up that relationship,” and I would have to talk to Vanguard about obtaining a refund.

It seemed like the woman with whom I spoke (I didn’t catch her name, but her phone number was XXX-XXX-XXXX) was intentionally trying to obfuscate the fact that this was not a Vanguard fee, but rather a Citi Smith Barney fee. I had to press her repeatedly to get her to admit that yes, Citi Smith Barney had charged this fee to Vanguard.

I fail to see why initiating a transfer from Citi Smith Barney should be free whereas initiating the same transfer from Vanguard should cost $95. This is especially annoying given that the reason why I initiated the transfer through Vanguard is because of Citi Smith Barney’s incomprehensible form and inadequate documentation. And it’s even more galling since despite the outrageous fee, you left behind 340 shares!

The woman with whom I spoke insisted repeatedly that the fee could not be refunded and I would have to speak with Vanguard. Why Vanguard would be expected to initiate a fee which was paid to Citi Smith Barney, I have no idea.

Strike 3: Large, arbitrary fees which bear no relation to reality.

No wonder you guys are in such lousy financial shape, while Vanguard is doing fine. Vanguard knows how to serve its customers properly, whereas apparently all you know how to do is provide bad service and charge obscene fees.

I’d send a copy of this complaint to Cisco but for the fact that I see from looking at their Web site that they’ve already kicked you to the curb and switched to a different, most likely better, transfer agent. Good for them.


Jonathan Kamens

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2 thoughts on “Citi Smith Barney incompetence

  1. Pingback: More Citi Smith Barney incompetence « Something better to do

  2. Pingback: Something better to do » Blog Archive » Citi Smith Barney refunds transfer fees

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